Dr Martin Petrin invited to prepare a briefing note for the Business, Energy and Industrial Strategy
5 December 2016
Dr Martin Petrin, Senior Lecturer at UCL Faculty of Laws and Deputy Director of UCL’s Centre for Commercial Law, was invited to prepare a Briefing Note on Industrial Strategy and Research-led Innovation for the House of Commons Business, Energy and Industrial Strategy Committee.
Dr Petrin’s submission addressed merger and acquisition rules that are considered as part of the Government’s emerging industrial strategy, specifically the potential introduction of stricter merger and acquisition rules and a ‘public-interest test’ for foreign takeovers.
Today, mergers and acquisitions are by default solely scrutinised by the competition authorities and the Government may only intervene where an acquisition gives rise to certain specified public interest concerns. Conversely, the rules under consideration would give the Government broader powers in deciding the outcome of cross-border acquisitions of businesses that are of special importance.
Dr Petrin said:
As an alternative option to today’s regime, the Government could consider a system where it can prevent a transaction by a foreign investor – or demand certain representations and undertakings – if the government is not satisfied that the investment is likely to be of ‘net benefit’ to the UK. However, any broader governmental powers in this area would have to be carefully designed, together with procedures and criteria to be used to assess a proposed acquisition. Although foreign takeovers may well have positive effects, there might be a case for a ‘safety valve’ in the form of stronger governmental powers in reviewing bids in light of public interests.