UK deals face two separate government reviews. National security screening under the National Security and Investment Act 2021 is mandatory and suspensory for share acquisitions in 17 sensitive sectors, with no turnover threshold and void completion as the sanction. Merger control by the Competition and Markets Authority is voluntary, but the CMA can investigate deals that meet its turnover, share of supply or hybrid tests. Both reviews should be built into the timetable and the transaction documents from the start.
National security screening
The National Security and Investment Act 2021 applies to acquirers of any nationality, including UK buyers. If the target carries on specified activities in one of 17 sensitive areas, such as defence, energy, transport, communications, data infrastructure or artificial intelligence, buying more than 25%, more than 50% or 75% or more of shares or votes, or votes that can pass or block resolutions, must be notified to the Investment Security Unit in the Cabinet Office and approved before completion. There is no turnover or deal value threshold.
Completing a notifiable deal without approval makes it void, and penalties can follow. Non-notifiable deals, including asset deals and acquisitions of material influence, can still be called in for up to 5 years after completion, or within 6 months of the government becoming aware of them, so voluntary notification is often used for deals near a sensitive sector.
After a notification is accepted the government has up to 30 working days to decide whether to call it in. A called-in deal faces a 30 working day assessment, extendable by 45 working days and further by agreement. Long-stop dates and conditions should allow for this.12345
Sector changes announced for 2026
On 12 March 2026 the government confirmed it will revise the mandatory sectors: water and sewerage will be added, critical minerals and semiconductors will become separate schedules, the artificial intelligence definition will be refocused on developers rather than users, and communications will be narrowed. The changes need secondary legislation, which the government said it would lay later in 2026. Until it is in force the current 17 sectors apply, but deals signing now with completion in 2027 should be checked against both versions.6
Merger control by the CMA
UK merger control is voluntary: parties choose whether to notify, but the CMA can review a deal on its own initiative if a jurisdictional test is met. The tests are UK turnover of the target above £100 million; a combined share of supply of 25% or more that the merger increases, where at least one party has UK turnover above £10 million; or a hybrid test where one party has at least 33% share of supply and UK turnover above £350 million and the other has a UK nexus.
A small merger safe harbour excludes deals where no party has UK turnover above £10 million. The hybrid test matters for acquisitions of start-ups and pre-revenue targets by large firms, which can be reviewed even if the target has little or no UK turnover.78910
| Regime | Test | Consequence |
|---|---|---|
| NSI Act mandatory notification | Acquiring more than 25%, more than 50% or 75% or more of shares or votes, or blocking votes, in an entity in one of 17 sectors; no turnover threshold | Approval needed before completion; deal void without it |
| NSI Act call-in | Any qualifying acquisition of entities or assets | Can be called in up to 5 years after completion |
| CMA turnover test | Target UK turnover above £100 million | CMA may investigate |
| CMA share of supply test | Combined share of 25% or more, increased by the deal, one party with UK turnover above £10 million | CMA may investigate |
| CMA hybrid test | One party with at least 33% share and UK turnover above £350 million, other party with UK nexus | CMA may investigate |
| CMA safe harbour | No party with UK turnover above £10 million | No relevant merger situation |
How it works, step by step
- Map the target's activities against the 17 mandatory sectors and decide on a mandatory or voluntary NSI notification12Investment Security Unit, Cabinet Office
- Test CMA jurisdiction (turnover, share of supply, hybrid, safe harbour) and decide whether to notify or brief the CMA78910Competition and Markets Authority
- Set conditions and long-stop dates allowing for the NSI review and assessment periods5Parties
No timings or fees are shown unless an official source states them.
Documents usually needed
- NSI Act notification form (mandatory or voluntary)
- Sector analysis against the Notifiable Acquisition Regulations
- UK turnover and share of supply analysis for each party
- Share purchase agreement with regulatory conditions and long-stop date
Common mistakes
- Assuming the NSI Act only applies to foreign buyers; UK acquirers are caught too.
- Completing a notifiable acquisition before clearance, which makes the deal void.
- Relying on the target's low turnover to rule out CMA review when the buyer could meet the hybrid test.
- Using the current sector list for deals completing after the 2026 sector changes take effect.
When the business crosses borders
- Acquisitions of non-UK entities can be caught by the NSI Act if the target carries on activities in the UK or supplies goods or services to people in the UK.
- UK merger control runs separately from the EU regime since 2021, so a deal may need CMA and European Commission analysis in parallel.
- Overseas intellectual property or assets with a sufficient UK connection can be qualifying assets for call-in.
Questions businesses ask
Is there a turnover threshold for UK national security screening?
No. Mandatory notification depends on the target's activities in the 17 sectors and the size of the stake, not on turnover.12
Do we have to notify the CMA?
No, UK merger control is voluntary. But if a jurisdictional test is met the CMA can open an investigation, so many parties notify or engage with it where a deal raises competition issues.789
What happens if we close before NSI approval?
A notifiable acquisition completed without approval is void and penalties may apply.3
What this guide does not yet confirm
These points need checking with a qualified local professional in the United Kingdom before you rely on them.
- Takeover Code rules for public companies (including the mandatory offer threshold) and the CMA Phase 2 timetable, remedies and penalties were not confirmed.
- The insolvency and restructuring regime (administration, the Part A1 moratorium, restructuring plans under Part 26A of the Companies Act 2006, and Scottish procedural differences) was not confirmed and is not covered here.
- The amending regulations for the NSI mandatory sectors had not been found on legislation.gov.uk as of 18 October 2026; their content and in-force date need rechecking.
- Sector-specific change of control approvals (for example FCA, Ofcom, Ofgem) were not researched.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Acquisitions of certain entities active in 17 sensitive areas of the economy, including defence, energy and transport, must be notified to and approved by the government before completion under the National Security and Investment Act 2021. Applies regardless of the acquirer's nationality, including UK acquirers. There is no turnover threshold.
Mandatory notification is triggered by acquiring shares or votes that take a holding from 25% or less to more than 25%, from 50% or less to more than 50%, or from less than 75% to 75% or more, or voting rights that allow the acquirer to secure or prevent any class of resolution. Material influence and acquisitions of assets (land, tangible movable property, intellectual property) are not mandatory but can be notified voluntarily or called in.
A notifiable acquisition completed without approval is void. Civil and criminal penalties can also apply; civil penalties of up to 5% of worldwide turnover or £10 million, whichever is greater.
The government can call in a non-notified acquisition for assessment up to 5 years after it took place, and within 6 months of becoming aware of it. Applies to qualifying acquisitions that were not notified.
Once a notification is accepted the government has up to 30 working days to decide whether to call it in; a called-in deal faces a 30 working day assessment period that can be extended by a further 45 working days and further by agreement.
Following consultation, the government announced on 12 March 2026 that it will change the mandatory sectors, including a new water sector, separate critical minerals and semiconductors schedules, and narrower artificial intelligence and communications definitions, by secondary legislation to be laid later in 2026. Not yet in force as checked: no amending regulations were found on legislation.gov.uk.
A title search of legislation.gov.uk for 2026 regulations on notifiable acquisitions returned no results on 18 October 2026; recheck before relying on the current 17-sector list.
The CMA has jurisdiction over a merger where the UK turnover of the target exceeds £100 million. Threshold in force from 1 January 2025 under the Digital Markets, Competition and Consumers Act 2024 amendments.
The share of supply test is met where the merging parties together supply or acquire 25% or more of goods or services of a particular description in the UK or a substantial part of it, the merger increases that share, and at least one party has UK turnover above £10 million.
A hybrid test gives the CMA jurisdiction where one party supplies or acquires at least 33% of goods or services of any description in the UK and has UK turnover above £350 million, and another party has a UK nexus. Designed to catch acquisitions of small or pre-revenue targets by large firms. In force from 1 January 2025.
No relevant merger situation arises if none of the enterprises concerned has UK turnover above £10 million (small merger safe harbour).
Questions on this topic
10 statements on deals, investment screening and merger control in the United Kingdom
