UK government begins scrutiny of Altice's mounting stake in BT under national security law

The UK government announced today that it will be investigating Altice’s latest acquisition of shares in BT on grounds of national security.

French billionaire Patrick Drahi is behind Altice’s latest attempt to boost its shareholding in BT after it became the company’s largest shareholder last year.

Drahi bought a 12.1% stake in BT in June 2021 and increased that stake to 18% in December when the UK’s takeover rules had lifted following the first purchase of shares.

The billionaire’s increasing stake has raised questions about whether a foreign company is attempting to take over the UK’s telecoms giant - a possibility the government has said it would “not hesitate to act” upon if it materialised, according to the Guardian.

The UK government’s intervention, announced today, will scrutinise the additional 6% stake Altice purchased in December using the powers afforded it under the National Security and Investment Act 2021.

Under the same act, the government also announced this week that it will be scrutinising the potential foreign takeover of Newport-based semiconductor maker Wafer Fab - the UK’s largest company of its kind - by Chinese-owned Nexperia.

The government has 30 working days to carry out the Altice-BT investigation - a period that is extendable by up to a further 45 working days - and the process has already begun, it said.

Given the time restrictions set out by the Act, the deadline for the government’s assessment is set at 7 July, or 8 September if it chooses to exercise the maximum extension.

“We are monitoring the situation carefully,” a government spokesperson said in December. “The government is committed to levelling up the country through digital infrastructure and will not hesitate to act if required to protect our critical national telecoms infrastructure.”

If the government had not begun its scrutiny of the additional 6% stake and Altice was able to accumulate additional shares to pass the required 30% threshold, Drahi would have been able to start a formal takeover bid on 15 June, the Guardian said.

Business and energy secretary Kwasi Kwarteng, who ordered the assessment of Altice's additional 6% stake, Tweeted yesterday “we welcome overseas investment, but it must not threaten Britain's national security,” in relation to the potential Wafer Fab acquisition.