With acquisitions of, and investments into, UK businesses subject to increasing layers of regulatory scrutiny, this hub gathers ongoing insights on the key issues for acquirers and investors to consider.
Potential UK regulatory transaction blockers
Foreign Direct Investment (FDI)
Recent increasing global security risks and geopolitical tensions have resulted in new or strengthened FDI regimes. The UK's FDI rules take the form of the National Security and Investment Act 2021 regime: for an overview, please see our NSI Act hub and for information on how we can help with coordinating international FDI regimes, please see our Foreign Direct Investment & National Security Advisory services.
Merger control
Closely related to FDI review, where a potential transaction meets relevant thresholds, the Competition and Markets Authority has the power to scrutinise and in some cases block the transaction before it is completed, or, in the case of a completed transaction, to require that the merging businesses are held separate.
For more information on how we can help, please visit our Merger Control page.
Public interest scrutiny
Even where a transaction does not raise competition concerns, the UK Government can intervene in mergers that raise public interest concerns in relation to the stability of the UK financial system, maintaining the UK’s capability to combat, and to mitigate the effects of, public health emergencies, and media plurality.
While not necessarily blockers to a transaction, other key issues that investors or acquirers of UK businesses need to consider include:
- Transparency of ownership of UK shares and property: the UK's PSC Register and Register of Overseas Entities require disclosure of the ultimate owners and controllers of UK corporates and overseas entities holding qualifying UK real estate.
- Transparency of foreign power directed activities in the UK: the UK's newest public register, the Foreign Influence Registration Scheme requires registration of certain arrangements with foreign powers and foreign power-controlled entities.
- Change of control of financial firms: some transactions will require approval under the Financial Services and Markets Act 2000 financial controllers regime governing changes in control of authorised financial firms.
- Tax structuring reporting: certain transactions may have implications under the UK's rules requiring reporting of certain structures and arrangements designed to avoid tax.
- Re-domiciliation: the future potential for re-domiciliation of overseas entities into the UK.
Beyond the scope of this hub, other considerations will apply in the context of publicly listed target companies, including for example the Takeover Code and additional requirements imposed by the UK's Financial Conduct Authority and Prudential Regulation Authority.