LONDON, Oct. 17 (Xinhua) -- New powers to enable British government intervention to block company mergers where national security concerns are an issue were outlined Tuesday.
The measures, outlined by Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, will be targeted mainly at key areas, specifically companies that design or manufacture military and dual use products, and parts of the advanced technology sector.
Currently the British government intervention can only intervene in mergers involving companies with a turnover in Britain of more than 70 million pounds (93 million U.S. dollars),or where the share of British supply increases to 25 percent or over.
New proposals will enable greater scrutiny of foreign investment in a changing market, allowing the government to intervene in mergers that raise national security concerns, even when they involve smaller businesses.
The Department for Business, Energy and Industrial Strategy (DBEIS) said lowering the threshold will enable government ministers to scrutinize investment to businesses with a million-pound turnover, and remove the requirement for a merger to increase a business's share of supply of, or over, 25 percent.
A spokesman for DBEIS said the government will also consult on longer-term proposals to allow for better scrutiny of transactions that may raise national security concerns.
"This could include increasing risks of espionage, sabotage, or the ability to exert inappropriate leverage," said the spokesman.
Proposals could see the introduction of a "call-in" power modeled on that in the Enterprise Act 2002 to allow government to scrutinize a broader range of transactions for national security concerns.
There could even be a mandatory notification regime for foreign investment in certain parts of the economy which are critical for national security, such as the civil nuclear or the defense sector.
Clark said: "Britain has a proud record of being open to the world as the foremost advocate of free trade. It is right that every so often the government reviews its mergers regime to close loopholes where they arise and this is what these proposals do in the area of national security.
"No part of the economy is off-limits to foreign investment and the UK will continue to be a vociferous advocate for free trade and a magnet for global talent."
A major consultation exercise will now be launched to seek views from business on the new proposals.
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