Government seeks legislation to prevent foreign takeovers of UK assets

The UK government is considering new legislation that would halt ‘back door’ acquisitions of UK firms by overseas buyers even years after the deal was concluded.

Ministers are seeking to block these takeovers on national security grounds as part of the biggest overhaul of the UK’s industrial intervention policy in almost 20 years.

A national security and investment bill is due to be published on Wednesday, which will include the law that would allow ministers to halt acquisitions as many as five years after a deal is concluded.

The bill will ask that new takeovers, mergers and other significant transactions should be notified to a new Investment Security Unit based in the Department for Business, Energy and Industrial Strategy (Beis).

The business sectors that will be affected by the bill haven’t been specified yet and are subject to consultation.

Those affected will be guaranteed a government response to their proposals within 30 days, showing that there will be more control on takeovers but that the country will remain open to international investment.

Business secretary Alok Sharma said that while ministers were keen to ensure the UK remained attractive to inward investment “hostile actors should be in no doubt – there is no backdoor to the UK”.

One of the party’s MPs, Bob Seely, said he welcomed the intent of the bill but wanted ministers to be clear about how far takeovers by foreign companies could be blocked amid concerns over human rights.

“You can’t be neutral about a company involved in slave labour, or in significant intellectual property theft or abuse of human rights or in helping set up the surveillance state,” Seely added.

Nadhim Zahawi, the business minister, told Bloomberg News in an interview last week that suggestions of retrospective powers that would reverse foreign takeovers were not being taken forward.

"Any retrospection on deals would send the wrong message," he said. "Our priority is to make sure that we send a message to the world that we are open for business."