As wealthy nations around the world – including the UK and US – buy up vast quantities of COVID-19 vaccine candidates amid fears of ‘vaccine nationalism’, clients of London Registrars’ company secretarial subscriptions may be interested to learn of the British government’s addition of a new public interest consideration to existing law.
The background of the Enterprise Act
According to section 42 of the Enterprise Act, the Secretary of State may issue an intervention notice to the Competition and Markets Authority (CMA) if they believe that one or more public interest consideration is or may be relevant to a relevant merger situation. It is also possible for special interventions to be made under section 59, as well as European public interest interventions under section 67.
For these purposes, a public interest consideration is a consideration that – at the time the particular intervention notice is given – is specified in section 58 of the Enterprise Act, or is not so specified but ought to be so in the opinion of the Secretary of State.
The Department for Business, Energy and Industrial Strategy (BEIS) announced on 21 June 2020 the government’s intention to introduce a new specified public interest consideration related to public health emergencies.
Two days later, the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020 (the Order) came into force. This Order amends the Enterprise Act, section 58 to include an additional public interest consideration: “The need to maintain in the UK the capability to combat, and to mitigate the effects, of public health emergencies”.
Why has the government amended the Enterprise Act?
Accompanying the Order’s entry into force, BEIS has published guidance on the government’s reasons for the amendments, as well as the practical difference these changes make.
The government has justified the new provision amid the disruption brought by the COVID-19 pandemic, on the grounds that some mergers and acquisitions may imperil the UK’s ability to respond to and recover from public health emergencies.
The amendments are therefore designed to improve the government’s position to address such risks, including those arising from the takeover of companies that can combat public health emergencies or that can assist in mitigating the effects of public health emergencies.
Risks related to the effects of COVID-19 have further motivated the government to introduce these amendments, with the economic uncertainty brought by the pandemic potentially impacting on the share price or profitability of some businesses in the short term. This has been recognised as potentially leaving UK enterprises with critical capabilities more vulnerable to takeover.
Consult the London Registrars team for advice on the latest legal changes
The UK’s current fast-moving legal landscape necessitates organisations of all sizes and sectors being well-positioned to move just as quickly, including to ensure continued compliance with changes to the law that may arise partly or entirely due to the corona virus pandemic.
We would therefore urge you to contact our corporate governance professionals directly if you have any related queries, or to learn more about specific services such as our basic company secretarial support packages and subscriptions.