A UK deal can now require government notice before closing

The record

The National Security and Investment Act 2021 received royal assent on 29 April 2021, according to the enacted text published on legislation.gov.uk, and created a UK regime letting the Secretary of State call in, and if necessary unwind, acquisitions raising national security concerns. The government's collection page states the Act came into force on 4 January 2022 and that acquisitions in 17 specified sensitive sectors of the economy require mandatory notification before completion. Section 8 of the Act itself sets the thresholds for gaining control of an entity: crossing from 25 percent or less to more than 25 percent of shares or votes, from 50 percent or less to more than 50 percent, or from less than 75 percent to 75 percent or more.

What the sources establish

Section 8 also provides that acquiring voting rights sufficient to secure or block the passage of a class of resolution counts as gaining control regardless of the percentage held, so a minority stake carrying specific blocking or veto rights can trigger the regime even below the 25 percent line. The government's collection page confirms that guidance exists specifically listing the 17 mandatory notification sectors and that a dedicated notification service has operated since the Act's commencement, which is the mechanism through which qualifying acquisitions must be filed before completion rather than reported afterward.

Scope and revision

The Act's mandatory regime is narrower than a general merger control power: it applies to the specified sectors and the specified control thresholds in Section 8, not to every UK acquisition, and the Secretary of State retains a separate voluntary call-in power over transactions outside the mandatory list where a national security risk is identified. The nearly eight-month gap between royal assent in April 2021 and commencement in January 2022 also matters for dating any transaction discussion: acquisitions completed before 4 January 2022 were not subject to the mandatory notification obligation the Act created, even though the Act had already received assent.

The decision in front of you

A founder or investor closing a UK round involving a foreign acquirer or a sensitive-sector target should, as an editorial checklist beyond the statute, confirm whether the target's activity falls within one of the 17 mandatory sectors, whether the proposed shareholding or voting change crosses one of the Section 8 thresholds, and whether any board or veto rights attached to a minority stake could independently trigger the regime.

• Does the target's business fall within one of the 17 mandatory notification sectors the government's guidance lists?
• Does the proposed transaction cross a 25, 50 or 75 percent threshold under Section 8, or grant blocking rights that count as control regardless?
• Has a notification been filed before completion, given the regime requires notice in advance rather than after closing?

The statute's specific thresholds, not a general sense that foreign investment is scrutinized, determine whether a given UK transaction needs clearance before it can close.