UK Law and Practice Contributed by: Federico Fruhbeck, Alice Brogi, Alex Bluett and Gisele Zouein, Gibson, Dunn & Crutcher LLP
CMA jurisdiction applies if certain thresholds are met, such as a UK turnover of GBP100 million for the tar- get, a combined share of supply exceeding 25%, or transactions involving parties with a 33% UK share of supply and GBP350 million in turnover. For regulated entities under the Gas Act 1986 or Elec- tricity Act 1989, the CMA holds additional review pow- ers, as well as in relation to the water and sewerage sectors. 5.6 Labour Law Regulations The Labour government proposed a raft of new employment laws in its Employment Rights Bill which seek to bolster protections for employees in a range of ways, as well as strengthening the position of trade unions where they exist. Many of these new laws are expected to come into effect by 2027. Acquirers will therefore need to continue to ensure thorough due diligence in order to identify high-value or high-liability employment rights as well as ensuring compliance with information and consultation rights, which can impact a transaction timetable. While it is possible for trade unions and works councils to exist within private UK businesses, they tend to be rare and any opinion or advice from such bodies is not typically binding on the business. Pre-completion information consultation requirements are more likely to triggered where the transaction is one to which the Transfer of Undertakings (Protection of Employees) Regulations 2006 (“TUPE”) apply. TUPE most frequently applies to transactions which involve the transfer of a business as a going concern, such as in an asset sale or carve-out scenario. The effect of TUPE is that the employment contracts of the employees in the business being sold are automati- cally transferred by operation of law to the acquirer of that business, protecting their terms and conditions of employment. The acquirer effectively steps into the shoes of the previous employer as if it had always been the employer of the transferring employees, tak- ing on all related rights and obligations. The transfer- ring employees also benefit from enhanced protection against dismissal and changes to their terms and con- ditions post-transfer. Acquirers should be aware of the limitations TUPE can place on post-completion work- force adjustments including attempts to harmonise
the new workforce with their own. Importantly, TUPE requires a prior information and consultation process with the affected employees or their representatives to have been carried out in advance of the transfer, potentially impacting the transaction timetable, with penalties for those who fail to comply. 5.7 Currency Control/Central Bank Approval The UK does not have any currency control regula- tions and does not require any central bank approval for M&A transactions. The UK has a free and open market for foreign exchange, and parties are free to convert and transfer any currency in and out of the UK, subject to compliance with any applicable sanc- tions or anti-money laundering regulations. 6. Recent Legal Developments 6.1 Significant Court Decisions or Legal Developments The most recent energy and infrastructure M&A court decision was the English Supreme Court ruling in R (on the application of Finch on behalf of the Weald Action Group) v Surrey County Council and others (2024) UKSC 20, often referred to as Finch . The court, by a three-to-two majority, held that down- stream greenhouse gas (GHG) emissions from using oil produced by an expanded Surrey project, fall within the scope of the environmental impact assessment (EIA) required under the EIA Directive and related reg- ulations. The decision quashed Surrey County Coun- cil’s approval, emphasising that the EIA “must include all effects of the project, whether direct or indirect, immediate or remote”. This was the first time that an apex court has addressed the interpretation of the EIA Directive in the context of the extraction of hydrocarbons. Moreover, for UK projects, EIAs must now account for downstream Scope 3 emissions for new or expanded hydrocarbon projects involving combustion. However, the EIA Directive’s applicability to non-hydrocarbon projects remains uncertain, as highlighted by Lord Leggatt’s distinction of other commodities with less
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