UK Pushes For Greater Control Over Acquisitions By Foreign Businesses 

The United Kingdom is poised to become the latest country to roll out rules aimed at barring acquisitions by foreign countries of businesses in key or strategic sectors.

The U.K. government and Prime Minister Boris Johnson have unveiled a proposal that would require investors to give regulators a heads-up over deals involving companies in 17 crucial sectors, The Wall Street Journal reported Wednesday (Nov. 11).

Those sectors include energy and defense, nuclear and artificial intelligence, as well as transportation, according to the report.

Under the new vetting system, government regulators would screen potential deals within a month before deciding whether to recommend they move forward or not.

Companies that attempted to skirt the system would be hit with potentially hefty fines of at least $13 million or up to 5 percent of global revenue, the Journal reports, not to mention the possibility of five years in jail.

While the U.K government contends the rules are not aimed at any particular country, there has been widespread anxiety on both sides of the Atlantic and on the continent as well over acquisitions of domestic companies by state-backed Chinese business enterprises.

Over the past several months, U.K. officials have been particularly concerned as well about protecting companies that produce essential COVID-19 supplies, such as PPE, as well as intellectual property, according to the Journal.

Given the majority in Parliament held by Prime Minister Boris Johnson’s government, the “legislation is likely to pass in its current form,” the WSJ reports.

The European Union took similar steps over the summer, vowing closer scrutiny of deals by Chinese companies to take over firms on the continent.

In particular, the rules aim to prevent Chinese or other foreign companies swooping in to take over European companies that had been weakened by the fallout from the coronavirus pandemic.

Under the plan, businesses receiving support from beyond the EU would be required to check in with regulators when buying a local company or product.