UK Requires Certain Sensitive Transactions to Be Filed For Approval

On April 29, 2021, the United Kingdom adopted the National Security and Investment Act 2021 (the “Act”).  The Act will be effective once new rules are adopted, expected at the end of this year. It will require that any acquisition involving a buyer of a target “carrying on” activities in the United Kingdom in certain sensitive industries where the result will be voting control above 25% be filed with the Department of Business, Energy & Industrial Strategy (the “DBEIS”) before being closed.  Heavy prenalties for breaching the law apply. The government will be able to review the filing for 30 days and decide whether to open a full review. If so, it gets another 30 days, which can be extended by 45 days.  Furherwore, the government can decide retroactively to review any acquisition in the sensitives sectors for up to 5 years from completion, including retroactive to November 12, 2020.  Sensitive sectors may include, as the DBEIS has announced already, such areas as advanced materials, certain robotics, computing hardware, nuclear activities, communications, cryptography, data infrastructure, defense, energy, space technologies, transport and so on. If a buyer or target is unsure and the deal is not closed before November 12, 2020, it may be worth a check.