Key facts
- The UK government's Investment Security Unit (ISU) reviewed 24 foreign takeover bids between Q1 2025 and Q1 2026.
- Ten of these bids targeted UK defense firms.
- Nine of the defense sector bids were from foreign private equity or investment banks.
- One defense sector bid was from a sovereign wealth fund or state-owned vehicle.
- The ISU operates under the National Security and Investment Act, established in January 2022.
- The government stated that all acquisitions are considered on a case-by-case basis.
The UK government has intervened in numerous foreign takeover attempts of British defense firms over the past year due to national security concerns. According to data obtained via a Freedom of Information request, the government's Investment Security Unit (ISU) 'called in' 24 proposed bids from foreign buyers between the first quarter of 2025 and the end of the first quarter of 2026. Of these, ten deals specifically targeted the UK's defense sector, with nine originating from foreign private equity or investment banks and one from a sovereign wealth fund or state-owned entity.
Experts note that the UK's strong defense manufacturing capabilities make it an attractive acquisition target, necessitating a national security layer to prevent adversaries from gaining control of sensitive data or capabilities. Defense firms topped the list of scrutinized foreign private equity acquisitions, followed closely by critical government suppliers. This scrutiny highlights a strategic priority for the UK in maintaining control over its defense supply chain.
The figures emerge as the UK's defense sector faces funding challenges, with a recent £15 billion package announced by former Prime Minister Sir Keir Starmer falling short of military officials' requests. Ministers are balancing the need to protect national security with the economic benefits of selling strong domestic sectors overseas.
The ISU was established in anticipation of the National Security and Investment Act, which officially came into force on January 4, 2022. The data also indicated government scrutiny of bids from state-owned entities targeting artificial intelligence and data infrastructure companies. This trend reflects a broader increase in foreign takeovers on the London market, with undervalued UK companies becoming targets for overseas buyers. The government maintains that it routinely scrutinizes acquisitions to ensure national security is protected while continuing to champion open investment.