Posted by James Worrall, Partner
UK takeover regime: new national security rules come into force
New rules that will enhance the Government’s powers to block takeovers on national security grounds have come into force today (11 June 2018). The changes relate to businesses that develop technology or hardware that is, or may be, used for military purposes.

The key changes are changes to the threshold tests for when the Government can intervene:
- The requirement that the transaction would have to increase the market share of the combined entities no longer applies; and
- The turnover threshold of the target is now £1m, reduced from £70m.
The Government’s stated rationale for the changes is to recognise the importance of small British businesses in developing high tech, cutting edge technology products which can impact national security. The new rules announced today the first step in enhancing the Government’s powers in this area. Further changes to the regime are expected in a White Paper later in 2018.
James Worrall, a partner in our Corporate team comments: “It is important for buyers, sellers and advisers in the market to take note of the changes and consider the implications for transactions currently being negotiated or in the pipeline. The rules relate to businesses whose technology may be used for military purposes and so could capture businesses that do not consider themselves to be in the military supply chain, for example computing hardware and quantum technology.”
For further information contact James Worrall or another member of our Corporate team:
0800 182 2458 Email us
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