UK increases merger thresholds amid PRC, Russian tension

Author: John Crabb | Published: 27 Mar 2018

The UK government is responding to increasing sensitivity from Russian and Chinese investments into the country in several ways. One of these is through its competition policy: the Competition and Markets Authority (CMA) and the Department for Business, Energy and Industrial Strategy (BEIS) are going ahead with  proposals to amend the jurisdictional thresholds that were initially established by the Enterprise Act 2002.

The updated rules would strengthen the government's powers to scrutinise takeovers that may raise national security concerns in some specific areas of the economy.

In a March 15 consultation paper, the CMA suggested reducing the turnover threshold at which it reviews mergers from £70 million ($99 million approximately) to £1 million - the turnover test - and widening the stipulations of a share of supply test. The latter would provide a hook for the government to intervene when an acquisition leads to a company holding a 25%...