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Merger control to include public health emergency criterion

Subject: Coronavirus emergency; Competition law

Source: Department for Business, Energy & Industrial Strategy

Changes to the Enterprise Act 2002, being laid before Parliament on Monday 22 June 2020, will allow the government to scrutinise certain foreign takeovers to ensure they do not threaten the UK’s ability to combat a public health emergency such as coronavirus.

The economic disruption caused by the pandemic may mean that some businesses with critical capabilities are more susceptible to takeovers either from outwardly hostile approaches or financially distressed companies being sold to malicious parties.

The new powers will enable the government to intervene if a business which is directly involved in a pandemic response, for example, a vaccine research company or personal protective equipment manufacturer, becomes the target of a takeover.

In addition, the changes will expand powers to scrutinise and intervene in mergers in three sectors of the economy central to national security: artificial intelligence; cryptographic authentication technology; and advanced materials; by lowering the thresholds that must be met before such scrutiny may take place.


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