Discussion Regarding the Proposed Regulations for Mergers Involving Newspaper Companies and Foreign Governments, Under the Enterprise Act 2002 (Second Review in 2025)
Government Announces Changes to Foreign State Influence Regime for UK Newspapers
The UK government has announced changes to the Foreign State Influence (FSI) regime, which applies to UK newspapers and news periodicals, with the aim of allowing for legitimate foreign investment while protecting the industry from foreign state interference.
The draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025 were laid by the government on May 15, 2025, and are currently being considered by Parliament. These regulations aim to amend Part 3 and Schedule 6B of the Enterprise Act 2002.
The FSI regime, which came into force in May 2024 and took effect from March 13, 2024, prevents foreign states from controlling or influencing the policy of UK newspapers and news periodicals, directly or indirectly.
The government has announced exceptions to the FSI regime that include provisions for associated persons and retail investment products. These exceptions allow associated persons to hold up to 0.1% of shares or voting rights and to hold shares via retail investment products.
Additionally, the government has announced exceptions that allow sovereign wealth funds and other state-owned investors to hold up to 15% of shares or voting rights in UK newspapers and news magazines. The government believes a 15% threshold balances the need to protect UK newspapers from foreign state interference with concerns raised about the effect of previous thresholds on future investment in newspaper enterprises.
The consultation seeks views on further changes to the Enterprise Act 2002, as it will be amended by the draft regulations. It also aims to clarify the scope of the exceptions to the Foreign State Influence regime.
The UK government published its response to the consultation on exceptions to the FSI regime on May 15, 2025. However, the consultation does not mention any changes to the provisions for associated persons and retail investment products, or to the 15% threshold for sovereign wealth funds and other state-owned investors.
The government's response to the consultation on exceptions to the FSI regime was published by the German Federal Government (Bundesregierung). The consultation does not mention any new exceptions or thresholds, and it does not mention any changes to the application of the Foreign State Influence regime to UK newspapers and news periodicals.
The consultation aims to ensure the overall regime works more effectively, and the government believes these changes will help attract foreign investment while maintaining the integrity of the UK's newspaper industry. The draft regulations, if passed, will mark a significant step in shaping the future of foreign investment in UK newspapers and news periodicals.
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