Consultation outcome

Government response to the consultation on the draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) (No.2) Regulations 2025

Updated 30 October 2025

1. Introduction

1.1 Background

The Foreign State Influence (FSI) regime prevents foreign states from being able, directly or indirectly, to control or influence the policy of UK newspapers and news magazines. The FSI regime came into force in May 2024 but took effect from 13 March 2024.

Exceptions introduced by the Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025 (“the No.1 Regulations”) which passed in July 2025 allow sovereign wealth funds and other state-owned investors (SOIs) to hold up to 15% of shares or voting rights in UK newspapers and news magazines, as passive investments, without being considered to have acquired control or influence. This consultation sought views on further changes to the Enterprise Act 2002 to clarify the scope of the exceptions and to ensure the regime works overall more effectively. Draft Regulations - the Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) (No. 2) Regulations 2025 (“the No.2 Regulations”) were published alongside the consultation.

1.2 What the consultation asked

The consultation sought views on the draft No. 2 Regulations, which proposed to:

• Introduce a 15% limit on the aggregate of shares or voting rights which can be held in a UK newspaper by multiple SOIs acting on behalf of foreign powers from different states. The cap would take effect retrospectively from 13 March 2024, in line with the limits introduced by the No. 1 Regulations for single SOI investments and for investments by multiple SOIs acting on behalf of the same foreign state.

• Introduce a requirement for SOIs to notify the Secretary of State before the end of a period of 14 days beginning with the date of the acquisition which results in them holding more than 5% (but not more than 15%) of shares or voting rights in a newspaper owner directly. If the SOI fails to notify by the deadline, their holding would not qualify for an exception, thereby triggering the Secretary of State’s obligation to intervene. The new notification requirement would come into effect 2 months after the No.2 Regulations are made.

The consultation specifically asked for views on:

• The cap on investment by multiple SOIs from different foreign states and on the scope of the exclusion of 5% holdings of shares or voting rights in quoted enterprises;

• On the practical implications of the notification requirement, and whether any safeguards need to be added

• On whether the notification requirement would create any unintended consequences for potential investors or for newspapers groups in reaching agreement with potential SOI investors

2. Responses to the consultation

Three responses were received to the consultation. These focussed on the following key themes:

2.1 The treatment of indirect holdings

Two respondents questioned whether it was proportionate, and what effect it could have on investment, for both indirect holdings by SOIs in a UK newspaper owner (for example, by a SOI investing in a company which has invested in a UK newspaper owner) and direct holdings to count towards the 15% aggregate cap for SOIs acting on behalf of a foreign power from any country or territory.

2.2 The different treatment of public and private companies

One respondent raised a concern that holdings by SOIs of no more than 5% in quoted companies would not count towards the 15% aggregate cap for SOIs acting on behalf of a foreign powers from different countries or territories, whereas holdings of no more than 5% in a private company would count towards the aggregate cap. They pointed out that this could distort competition between publicly listed and privately held newspaper groups.

2.3 What will be covered in guidance

Two respondents gave examples of areas of the FSI regime where they would find further clarification in guidance useful. First, the definition of “sovereign wealth funds and other state-owned investors”. Second, examples of how the regime would apply to situations where notification by an SOI of their investment will not necessarily give legal certainty that the SOI is eligible for the exception, such as if there is an existing investment in the same newspaper owner by another SOI that the notifying SOI was previously unaware of, and the notifying SOI’s investment would breach the 15% aggregate cap.

3. Government response

The government has taken the consultation responses carefully into consideration, and intends to move forward with the policy of the Regulations as outlined in the original consultation, with one policy amendment (as outlined in 3.1). The approach to the legal drafting of the Regulations has been altered in some places to better achieve the intended policy outcome and provide greater clarity to those subject to their provisions. The coming into force date will be 31st January 2026, subject to Parliamentary approval. This sticks closely to the earlier proposal to bring them into force two months after they are made, and we consider that this gives investors sufficient time to understand and prepare for the new requirements.

3.1 Publication requirement

Following engagement with parliamentarians, in addition to requiring SOIs to notify the Secretary of State where they are acquiring a direct holding of shares or voting rights of more than 5% but no more than 15% of the shares or voting rights in a UK newspaper owner, we are introducing a further requirement that SOIs must also publish appropriate details of their investment within 14 days of the relevant acquisition being made. If they have acquired a direct holding of more than 5% of the shares or voting rights in a newspaper and do not notify and publish in the timeframe, they will not be eligible for the exception, and the holding will create a prohibited Foreign State Newspaper Merger Situation.

The Secretary of State intends to make a commitment to report to Parliament regularly on details which SOIs have published about their investments pursuant to the Regulations. This commitment will be non-statutory. The intention of this commitment is to strengthen transparency around media mergers and acquisitions; and in particular help to reassure the public and parliamentarians about who is investing in UK newspapers, and that no foreign state is acquiring the ability to control or influence.

3.2 The treatment of indirect holdings

There will be a 15% cap on the total holdings of shares or voting rights that one or more SOIs acting on behalf of foreign powers of any country or territory may hold in a newspaper owner. The cap will apply equally to direct and indirect holdings of shares or voting rights. The government considered the treatment of indirect holdings carefully, and came to the conclusion that setting a different cap for indirect holdings would add undesirable complexity to the FSI regime.

3.3 The different treatment of public and private companies

Holdings in public listed companies and private companies are to be treated differently, for the purpose of applying the 15% limit to cases where multiple SOIs acting on behalf of different foreign states are holding shares or voting rights in a UK newspaper. This is due to the lack of transparency around small holdings in public companies with tradable shares. It could make it difficult for SOIs seeking to invest in public listed companies, which are newspaper enterprises or parent companies of newspaper enterprises, to know whether their intended investment will exceed the 15% cap; particularly in cases where the state owned investors seeking to invest and the state owned investors with existing investments in the relevant newspaper are from different foreign states. Public companies with tradable shares are unlikely to know the identities of their shareholders, unless those holdings cross reporting thresholds for listed shares which can be traded on a public stock exchange. In contrast, private companies which are newspaper enterprises, or parents of newspaper enterprises, are more likely to know the identities of their smaller investors, which would enable them to inform their SOI investors of whether their investment complies with the cap. To address this issue, the Regulations provide that holdings of shares or voting rights of 5% or below in a quoted company by SOIs acting on behalf of foreign powers of one country or territory are to be ignored for the purpose of assessing whether holdings by SOIs acting on behalf of foreign powers of another country or territory comply with the 15% limit. This would apply to holdings of shares or voting rights listed on the London Stock Exchange (LSE) and certain other international stock exchanges including the New York Stock Exchange.

The exception for state owned investors permits SOIs to hold a total of 15% of the shares or voting rights in a newspaper owner provided they are not able to control or influence the newspaper owner’s policy through other means. SOI investments which comply with the 15% cap will still be prohibited if they result in a foreign power having the right or ability to direct, control or influence to any extent, the person’s policy or activities (in whole or in part, and whether directly or indirectly) (see Schedule 6B, paragraph 1, condition 4).

3.4 What will be covered in guidance

DCMS has already committed to reviewing and updating the media mergers guidance by spring 2026, which will introduce guidance on the FSI regime, and we will consider the topics raised in responses as part of this review.

Annex: consultation questions

Respondents were asked to answer specific questions, with responses by email. There was no word limit.

We would welcome views on the cap on multiple SOIs from different foreign states, and on the scope of the exclusion of 5% holdings of shares or voting rights in quoted enterprises.

We would welcome views on the practical effect of the information requirement from both newspaper groups and from investors and financial and legal advisers and whether any additional requirements or safeguards need to be added.

We would also welcome views on whether the new requirements create any unintended consequences for potential investors or for newspaper groups in reaching agreements with potential SOI investors, if possible with practical examples?