On 11 November 2020, the UK government published a draft National Security and Investment Bill (the “Bill”). The Bill includes long-expected changes to the regime for reviewing foreign direct investment into the UK, and follows earlier reforms to the UK merger regime aimed at protecting Critical National Infrastructure.
If passed by Parliament, the Bill will introduce a new regime specifically to review foreign direct investment in the UK.
The Bill proposes new powers to review both takeovers and investments, including the acquisition of minority shares, in a number of industries. It also includes a range of penalties for failure to notify, and while it will take time to pass through Parliament, it provides for a retrospective call-in power for any transaction taking place between 12 November 2020 and the commencement date once the Bill has been implemented as legislation.
While it is not clear when exactly the Bill is likely to gain parliamentary approval, parties to transactions should start considering whether their transaction is likely to be caught by the new regime, and plan accordingly.
The draft of the Bill can be found here.