Oct 6, 2026 · A&O Shearman
For acquirers of UK businesses, NSI Act clearance now sits on the critical path of almost every sensitive deal. Planning for it early protects timetable, price and certainty.
Since the National Security and Investment Act 2021 came into force in January 2022, the UK has operated a standalone investment-screening regime that applies regardless of the nationality of the buyer. Acquisitions of qualifying entities active in seventeen sensitive sectors — including defence, energy, communications, data infrastructure, artificial intelligence and advanced materials — trigger a mandatory notification, and completing a notifiable deal without approval renders it void.
Outside the mandatory sectors, the Government retains a call-in power over acquisitions of control of qualifying entities and assets for up to five years after completion. In practice, that means buyers should assess voluntary notification wherever a target touches critical supply chains, sensitive data or dual-use technology, rather than relying on silence as comfort.
Once a notification is accepted, the Government has an initial review period of thirty working days; a call-in starts a further assessment period that can be extended. For public takeovers, that timetable must be reconciled with the Takeover Code, including the conditions an offer may carry and the obligations that arise when a holding crosses the thirty per cent threshold that triggers a mandatory offer under Rule 9.
The disciplined approach is to map NSI exposure at the term-sheet stage: identify qualifying activities, allocate filing responsibility and long-stop dates in the transaction documents, and prepare a clear narrative on ownership, governance and data access. Deals that treat screening as a workstream from day one close on time; those that treat it as a formality rarely do.
