What are the implications of the new NSI Act regime and the Government’s “public health emergencies” powers for healthcare and life sciences transactions?

On 4 January 2022, the new UK foreign investment review regime under the National Security and Investment Act 2021 (“NSI Act“, available here) came into force.

The new rules require businesses and investors to submit mandatory notifications for certain acquisitions of, and investments in, companies active in 17 key sectors of the economy. They also grant the Government extensive powers to investigate and impose conditions on a wide range of transactions (including both corporate investments and asset transactions) on national security grounds.

The new NSI Act regime will operate alongside the Government’s retained powers under the Enterprise Act 2002 (“Enterprise Act“, available here) to intervene in transactions that raise certain public interest considerations. Of particular relevance to healthcare, these public interest considerations include “the need to maintain in the United Kingdom the capability to combat, and to mitigate the effects of, public health emergencies”.

Here are our key takeaways for healthcare and life sciences companies:

  • Since 4 January 2022, it has been a mandatory requirement to notify certain acquisitions and investments in companies that carry out activities in 17 key sectors of the UK economy. It has also been possible to submit voluntary notifications outside these sectors and for a broader range of transactions.
  • The jurisdictional scope of the NSI Act is extremely wide. The new regime catches the acquisition of intangible assets (such as IP), certain minority investments, non-UK transactions and even internal corporate reorganizations.
  • Non-compliance with the mandatory filing requirement risks significant criminal and civil sanctions.
  • Mandatory sectors that are potentially relevant to healthcare transactions include “Synthetic Biology” and “Defence”. Many healthcare transactions will fall outside these sectors but careful screening is required to ensure that this is the case.
  • It is necessary to consider the risk of transactions being called-in for review under the NSI Act or under the “public health emergencies” provisions of the Enterprise Act, and therefore whether voluntary notification is appropriate. Voluntary notification should (in particular) be considered for the following types of transaction: (i) transactions that are relevant to the ability of the National Health Service (NHS) to address the COVID-19 pandemic (or future public health emergencies); (ii) transactions that result in any diminution of the UK’s critical/strategic capabilities in the healthcare sector; or (iii) transactions that otherwise raise concerns about the security of supply of key medicines or medical equipment/devices.
  • For cross-border healthcare transactions, we are increasingly seeing multiple foreign investment filings being required. It is crucial for parties and their advisers to coordinate foreign investment approval procedures globally so that substance is consistent and timetables are aligned.

For further details, please read our full client alert here.


Samantha Mobley is a partner in the EU, Competition & Trade Practice of Baker & McKenzie’s London office and a member of the London office Management Committee. She headed Baker McKenzie’s Global Antitrust and Competition Group, a team of over 300 competition and antitrust specialists worldwide for six years. Samantha has significant experience of advising on the implications of foreign direct investment rules for cross-border transactions. She has advised a number of companies on the implication of the reduced UK national security thresholds, as well as coordinating the global foreign investment review aspects of a proposed $12 billion joint venture between a FTSE100 company and a Fortune 500 corporate. Samantha is a Who’s Who Legal 2020 Leading Individual for Foreign Investment Review.