LONDON– Britain is ‘planning the biggest change to takeover rules’ in almost two decades, giving the government new powers to block deals in all sectors of the economy to prevent UK companies in sensitive industries from falling into foreign hands. The changes mark a new era of government oversight of business activity in the world’s fifth-largest economy which has traditionally been one of the most open markets to global mergers and acquisitions.

The business minister, Greg Clark, wants to tighten the existing rules, which are limited to large transactions, to cover all British companies including small firms.

Under the new rules, the government will have the power to intervene when a company wants to acquire an asset such as a particular piece of technology or intellectual property rather just when they are seeking to buy or take control of a firm. At present, the government can only intervene if a deal creates a group with 25 percent of the market or with a turnover of over 70 million pounds ($91.7 million). That has already been reduced to 1 million pounds for companies that make technology with military or dual-use applications.

Chinese foreign direct investment into Britain reached a record level last year with firms acquiring a slew of energy, technology and property assets. Its foreign ministry said on Tuesday China hoped Britain would provide a fair investment environment for foreign firms. The changes mirror efforts in the United States, Germany, France, and Australia, where there are concerns that China and other rivals are gaining access to key technologies.

Scrapping the revenue and market threshold targets illustrates the perceived threat to national security if smaller companies with advanced technology are acquired by foreign governments.

Prime Minister Theresa May, who is struggling with a rebellion in her party over her Brexit plans, has struck a more cautious tone on deals since becoming prime minister in 2016.

“These proposals will ensure we have the appropriate safeguards to protect our national security whilst ensuring our economy remains unashamedly pro-business and open to high levels of foreign investment in the future,” Clark said. Britain, which wants to reinvent itself as a global trading nation after deciding to leave the European Union, is seeking to balance the demands of safeguarding its strategic industries while continuing to court foreign investors.

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