Is it Still OK to do UK M&A? The National Security and Investment Act 2021: the First Five Months of Practical Experience

Almost five months have passed since the UK’s National Security and Investment Act 2021 (“NSIA”) took effect, radically overhauling the UK’s approach to foreign investment screening. Although hugely expansive in its scope and jurisdictional reach, generating a projected 1,000 – 1,830 filings per year, the UK Government’s intention was to establish an efficient and proportionate screening regime to allow fast clearances of most non-problematic deals and thereby minimize the burden of the NSIA for business. We consider how effective the Investment Security Unit has been at delivering these goals, the key takeaways from our practical experience with the NSIA over the past five months, how transacting parties have been navigating the NSIA in practice, and highlights areas of uncertainty which could usefully benefit from market wide guidance. We also look at the Government’s first calls ins under the new regime (namely China-backed Nexperia’s acquisition of a stake in Newport Wafer Fab, and the increased stake in BT by Patrick Drahi, the French billionaire owner of Altice) and consider what light they can be expected to shed on the NSIA regime.

By Nicole Kar & Mark Daniel^[1]

I. INTRODUCTION

It has now been almost five months since the UK’s National Security and Investment Act 2021 (“NSIA”) took effect, radically overhauling the UK’s approach to foreign investment screening. The introduction of the NSIA regime represented a step-change