The UK government has this week published a decision concerning a £63m takeover of Newport semiconductor manufacturer Nexperia Newport (previously Newport Wafer Fab) by Chinese-owned Nexperia which completed back in July 2021.

In short, the Department for Business, Energy & Industrial Strategy has ordered the takeover be reversed, by way of Nexperia selling 86% of its recently acquired shareholding, citing concerns under the National Security and Investment Act 2021 (NSI).

Specifically, the government has raised concerns that this takeover:

• Undermines existing attempts to foster a complete supply chain of semiconductor companies in the UK, and
• Raises concerns over national security relating to the technology and knowhow of compound semiconductors

Perhaps unsurprisingly, Nexperia representatives have expressed their dismay at the decision as well as their intent to overturn it. Given the infancy of the NSI however, there is little precedent on how practically a claim for judicial review would play out for Nexperia. Under s.49 of the NSI, Nexperia has 28 days, beginning with the day after the day on which the grounds to make a claim first arose, to file the necessary paperwork.

An interesting development in the use of the NSI by the government with potentially far-reaching practical implications for both the employees of Nexperia Newport and the wider M&A market.