Outbound China M&A and investment – UK

The UK is an attractive destination for outbound investment for a variety of reasons, including its stable political environment and rule of law, its membership of the EU, London's position as a preeminent financial centre, and its lack of restrictions on foreign investment. In 2007, the UK attracted over US$1 trillion of foreign investment, the highest in Europe and second only to the US.

For these reasons, many overseas companies choose to establish businesses or to publicly list businesses in the UK. Therefore, although the underlying assets or the company itself might not physically be located in the UK, UK law and regulation may well have an application to M&A affecting such targets, as well as to UK domestic companies.

This chapter considers investment in the UK in the form of direct acquisitions of shares in existing companies – both private companies and publicly listed companies – and looks at the relevant legal and regulatory framework as well as certain key practical issues that commonly arise.