Phase 2 referral of proposed acquisition of Perpetuus Group by Shanghai Kington Technologies and others

Business Secretary Kwasi Kwarteng has today (Wednesday 11 May) written to the Competition and Markets Authority (CMA) instructing them to carry out an in-depth Phase 2 investigation of the proposed acquisition of the Perpetuus Group by Shanghai Kington Technologies and others on national security grounds.

The Business Secretary has ‘quasi-judicial’ powers under the Enterprise Act 2002 to intervene in certain mergers on public interest grounds. Today’s decision follows the completion of the Phase 1 process during which the CMA conducted an initial investigation of the potential competition implications of the transaction.

The CMA considered that it does not believe that it is or may be the case that the transaction may be expected to result in a substantial lessening of competition within a market or markets in the UK. The Phase 1 report has been published today.

Following the consideration of evidence gathered from departments across government, the Business Secretary deems that the interest of national security continues to be relevant and should be subject to further investigation.
Perpetuus Group is a group of UK companies which is active in the functionalisation of graphene and other nanomaterials, which have a range of strategic applications. The government will ensure the implications of the transaction are fully considered. The CMA will report to the Business Secretary.

Business Secretary Kwasi Kwarteng said:

The UK remains firmly open for business, however we have been clear that foreign investment must not threaten our national security.

I have considered the evidence presented to me and asked the Competition and Markets Authority to undertake an in-depth investigation so we can fully consider the implications of this transaction.

The CMA will now lead the Phase 2 investigation covering the national security implications. It will have 24 weeks (subject to a possible 8-week extension) to conduct this investigation and deliver a final report to the Business Secretary.

Next steps

When the Business Secretary has received the report, he must decide from the following options, to:

  • make an adverse public interest finding in relation to the acquisition on national security grounds, and, if so, to take action to remedy any adverse effects to the public interest
  • make no adverse public interest finding

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