November 24, 2020
The Times published an article by McGuireWoods London partner Matthew Hall on Nov. 19, 2020, that analyzed the UK’s proposed legislation on foreign direct investment, the long-awaited National Security and Investment Bill.
In sum, Hall said, the bill would dramatically strengthen British controls over acquisitions that raise national security concerns, but the price may be delays and additional expense for investors. The inclusive nature of the requirements — virtually no lower threshold for transaction size or limit on the range of businesses covered — means the proposed Investment Security Unit may need to review up to 1,800 acquisitions per year, he explained.
“Perhaps the most amazing part of the bill is its inclusion of retrospective powers to review deals that take place from November 12, the day after parliament’s first reading,” Hall said. This means the unit may have a backlog before the law and the unit itself are even in place. “That may be a tactical issue for purchasers to consider: do your deal now and despite the retrospective powers, you may slip under the radar.”
In conclusion, Hall wrote, “Strengthening of the UK’s protections was necessary and overdue, but investors in sensitive sectors need to be prepared for a difficult transition in the short term and significant added risks to deals in the future.”