The National Security and Investment Act is being described as the “biggest shake-up of the UK’s national security regime for 20 years”.
The Act has identified 17 areas of the economy where greater scrutiny may be required when overseas investors are looking to acquire a UK business. Along with defence and military technology, new sectors covered by the Act include advanced robotics, artificial intelligence, the civil nuclear sector, transport, and quantum technology.
The business secretary, Kwasi Kwarteng, has talked about the importance of protecting national security but has said that the new investment screening process will be both simple and quick, giving investors and firms the certainty they need to do business.
While the move has been seen as a response to Chinese efforts to acquire strategically important technology businesses, much larger foreign buyouts – particularly by US companies – have also raised concerns about national security or the security of IP e.g. the takeovers of Ultra Electronics and Meggitt, as well as Nvidia’s bid for Arm.
Unnecessary meddling or critical to securing the national interest? It’ll be interesting to see how, or if, the UK government uses these new powers, and it might not be long before we see them in action should Patrick Drahi of Altice make a move to acquire BT in which he has already taken an 18 per cent stake.