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M&A hub: Developments driving and shaping M&A
Key legal and regulatory developments driving and shaping M&A
United Kingdom | Publication | February 2023
On February 1, 2023 it was announced that a sub-committee of MPs who sit on the Business, Energy and Industrial Strategy (BEIS) Select Committee have launched a short inquiry into how the how the Investment Security Unit (ISU), set up under the National Security and Investment Act 2021 to monitor investments and takeovers of UK businesses that might pose risks to the UK’s national security, shares information about its work.
The BEIS Sub-Committee on National Security and Investment, established by the BEIS Select Committee to examine the work of the ISU, is calling for those with knowledge of investment screening processes in the UK or abroad, or companies with experience of investments scrutinised by the ISU, to submit evidence through the inquiry webpage before midnight on February 24, 2023 on any of the following questions;
The inquiry will only take evidence on transactions where the ISU decision and period for any judicial review have both been completed.
(Parliament, Inquiry into Government’s investment security watchdog opens, 01.02.2023)
On January 31, 2023 the Department for Business, Energy and Industrial Strategy (BEIS) published a Consultation Paper following a statutory review of the Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 (Regulations). It asks whether the Regulations should be extended beyond their current expiry date of April 6, 2024 and also seeks views on other potential amendments and improvements to the Regulations.
The Regulations introduced a duty on the UK’s large companies and LLPs (those exceeding a certain size criteria) to report on a half-yearly basis on their payment practices, policies and performance for financial years beginning on or after April 6, 2017. Businesses in scope of the reporting requirement must prepare and publish information about their payment practices and performance in relation to qualifying contracts, for each reporting period in the financial year.
Proposals in Consultation Paper
Proposals on the following are set out:
Next steps
Responses are requested by April 28, 2023. A Government response covering the policy proposals and potential amendments to the Regulations is to be published within 12 weeks of the close of the consultation.
(BEIS, Reporting on Payment Practices and Performance – Government Consultation, 31.01.2023)
On January 30, 2023 the Financial Reporting Council (FRC) published an update to the Statement of Intent on Environmental, Social and Governance (ESG) which it first published in 2021. That identified underlying issues with the production, audit and assurance, distribution, consumption, supervision and regulation of ESG information.
Areas of focus in coming year
The update sets out areas where there remain ongoing challenges in ESG reporting and it suggests actions for preparers to produce decision relevant information. The update also sets out areas of focus for the FRC in the coming year, noting that the demand for ESG information continues to evolve. These areas include the following:
On January 13, 2022 the Department for Business, Energy and Industrial Strategy (BEIS) published the Final Report of the Net Zero Review Team chaired by Chris Skidmore. The Review Team was established in 2022 to review the Government’s approach to net zero to better understand the impact of the different ways to deliver the net zero pathway on the UK public and economy and maximise economic opportunities of the transition. This follows publication, in 2021, of the Government’s Net Zero Strategy, setting out a pathway to reaching net zero greenhouse gas emissions by 2050.
Part 1 of the Final Report sets the scene and explains the opportunity and benefits of net zero to individuals and the economy. Part 2 sets out how Government and industry should achieve this opportunity, stepping from the cross-cutting macro framework for a green industrial revolution and the specific actions needed to catalyse action in individual sectors of the economy through to how the role of local authorities, communities, and the individual to deliver a just transition can be enhanced.
Recommendations in the Final Report that will impact companies
These include the following:
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Key legal and regulatory developments driving and shaping M&A
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The Digital Markets, Competition and Consumers Act (DMCC Act) received Royal Assent on 24 May 2024 and is generally expected to come into force in autumn this year.
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The English High Court has given its judgment in the legal battle between FW Aviation (FWA) and VietJet Aviation Joint Stock Company (VietJet). This case revolved around the enforcement of leasing agreements for four Airbus aircraft and the alleged interference by VietJet in the aircraft’s repossession in Vietnam.
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On 26 July 2024, the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) jointly released revised rules in respect of the investments into China’s financial market through the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor (collectively, QFII) regime (the New Rules).
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