UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
1.4 Sale of Power Industry Assets Restrictions As explained in 1.3 Foreign Investment Review Process , since 4 January 2022, a mandatory notification regime under the NSIA has applied to transactions that fall within the definition of a “notifiable acquisition” (as set out in Section 6 of the NSIA). Under Section 13 of the NSIA, a notifiable acquisition that is completed without the approval of the Secretary of State is void. To qualify as a notifiable acquisition, the transac- tion must meet both of the following criteria, per Section 6 and Section 8 of the NSIA: • the subject being acquired must be a quali- fying entity that operates within a specific high-risk sector of the economy – the energy sector is specified as such by the Notifiable Acquisition Regulations; and • as a result of the transaction, the acquirer gains control of the qualifying entity by: (a) acquiring voting rights that enable it to secure or prevent the passage of any class of resolution governing the affairs of the qualifying entity; or (b) increasing its shares or voting rights: (i) from 25% or less to more than 25%; (ii) from 50% or less to more than 50%; or (iii) from less than 75% to 75% or more. The person gaining control or acquiring an interest in the qualifying entity must submit a notification digitally using the National Security and Investment (NSI) electronic portal and must comply with the form and content prescribed by the NSI Notices Regulation. Where a transaction does not require a manda- tory notification, parties may voluntarily notify
• EDF Energy (owned by French state-owned energy firm EDF); • E.ON (owned by German energy firm E.ON SE); • nPower (ultimately owned by E.ON UK); • OVO (a privately owned firm that bought SSE’s domestic energy business in early 2020); and • Scottish Power (owned by Spanish energy firm Iberdrola). In May 2025, there are 20 holders of supply licences in Northern Ireland. 1.3 Foreign Investment Review Process National Security and Investment Act The National Security and Investment Act 2021 (NSIA) introduced new requirements for foreign direct investment in certain business sectors that potentially affect national security. The new regime created notification requirements for certain transactions on either a mandatory or voluntary basis. Mandatory pre-notification requirements apply in respect of entities in “key sectors”, which includes energy (and specifically includes entities that hold transmission, distribu- tion, interconnector and/or generation licences). The requirements apply to transactions involv- ing the acquisition of a 25% stake or more (or equivalent levels of voting rights, including cer- tain “veto” rights) in an entity, as well as certain acquisitions that involve the acquirer moving to a higher level of interest (eg, more than 50%). Industry Act 1975 Section 13 of the Industry Act 1975 entitles the Secretary of State to block an acquisition by a non-UK-based entity of an “important manu- facturing undertaking” when it appears that a change of control would be contrary to the inter- ests of the UK (or a substantial part of the UK).
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