• UK DCMS issued consultation on further changes to the Enterprise Act 2002 (as it will be amended by second set of draft regulations) to clarify scope of exceptions to foreign state intervention regime, and to ensure overall regime works more effectively.
• Follows May 2025, UK GVT issued response to previous consultation and also foreign state intervention (FSI) impact assessment, stating UK GVT intended to move forward with the drafting of the regulations with one significant change.
• The draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025, which amends Pt 3 and Sch 6B of Enterprise Act 2002, was laid by the government on 15 May 2025 and is currently being considered by UKP.

Limit of 15% on Shareholding

• Seeking views on 2 specific changes to foreign state influence (FSI) exceptions.
• First is inclusion of aggregate limit of 15% on shares or voting rights which can be held in UK newspaper owned by multiple state-owned investors (SOIs) acting on behalf of different foreign states.
• This will operate in a similar way to the 15% cap that will apply to more than one SOI investing in a UK newspaper on behalf of the same foreign state.
• New cap may create issues for investors in public companies with tradable shares which own newspaper enterprises or which are newspaper enterprises themselves.
• These companies and investors are unlikely to know identities of new holders of shares or voting rights unless their holdings reach reporting thresholds for share transactions.
• To address this issue the UK GVT plans to exclude holdings of shares or voting rights in quoted companies below 5% from 15% aggregate cap for multi-state SOI holdings.
• Cap effective retrospectively from Mar. 13, 2024, in line with limits proposed for single SOI investments and for investments by multiple SOIs acting for same foreign state.
• Views welcomed on the cap on multiple SOIs from different foreign states, and on the scope of the exclusion of 5% holdings of shares or voting rights in quoted enterprises.

Notice of SOI Investments

• Other change addresses concern about UK DCMS’s ability to act where an SOI takes a significant minority shareholding but where Secretary of State does not receive notice.
• So not able to review transaction to ensure that it is genuinely a passive investment.
• The legislation requires Secretary of State to intervene if she has reasonable grounds to suspect a merger has resulted, or there are arrangements in progress which may result, in a foreign state being able to control or influence the policy of UK newspaper.
• However, there may be situations where the Secretary of State is not able to consider a transaction because the transaction has not been made public.
• The inclusion of a specific notification requirement for SOI investments would ensure that UK DCMS is given timely notice of investments in any case of concern.
• UK GVT therefore proposes to require SOIs to notify within 14 days of an acquisition completing where SOI acquired a holding of shares or voting rights which is above 5%.
• Penalty for failing to notify by the deadline would be that the SOI would not be eligible for the exception, thereby triggering the Secretary of State’s obligation to intervene.
• UK GVT proposes that the new reporting requirements will not come into effect until 2 months after the draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) No 2 Regulation are made.

Effectiveness

• The consultation is open until 16 September 2025.