Rishi Sunak’s latest policy target is his own government’s M&A rules. The UK prime minister is consulting on changes to the framework for assessing when to block takeovers on national security grounds. It’s a step forward, but may not be enough to stem criticism of a law that is less than two years old.
The tweaks proposed by the government should make life easier for M&A bankers and lawyers. The National Security and Investment Act gave the government power to “call in” and impose changes or block deals in specific sectors, such as defence. The new amendments may, for example, exempt internal restructurings or deals involving small minority stakes. They may also make the rules less cumbersome in fast-moving areas like artificial intelligence, which should stop transactions involving makers of even humdrum goods like washing machines getting caught in the net.
That’s all good, but critics have also argued that the Act’s decisions should be more transparent and accountable to parliament. That, and the decision to block a China-led acquisition of chipmaker Newport Wafer Fab over a year after it completed, has raised the risk of political meddling. Moreover, stakeholders can only know whether a deal aligns with state industrial objectives if the UK has clearly understandable sector strategies in the first place. (By Neil Unmack)
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