McDermott Comment | Why The UK’s Overhaul Of Takeover Rules Is Bigger Than You Think

Overview


Nicholas Azis, partner at law firm McDermott Will & Emery, said:

“The new National Security & Investment (NSI) Act regime does pose a number of challenges in terms of execution risk, however the tools to solve them are in the hands of M&A participants and their advisers, many of which exist in contractual and other mechanisms to deal with competition risk.

On the buyside we can expect to see more thorough analysis by advisers of their client’s position, both in terms of ownership but also affiliations, organizational structure, regulatory track record and covenant strength in anticipation of any UK government enquiry. Sellers will be more interested in these factors in evaluating a potential buyer than they have been in the past.

While the new NSI regime poses a challenge for its lack of certainty, a combination of thorough analysis and disclosure on the sell-side and the buyside together with guidance from the UK government should go a long way to mitigating transaction risk.”