The Government has increased its powers to intervene in foreign company mergers that raise national security concerns in the UK.
Military product-makers and advanced technology firms will be targeted to close “loopholes” that pose espionage or sabotage risks.
Ministers will be able to scrutinise takeover companies with a turnover of more than £1m, down from the current £70m threshold.
And a merger will no longer need to increase a business’s share of UK supply to 25% or over.
Business secretary Greg Clarke said: “Britain has and always has had a proud record of being open to the world as the foremost advocate of free trade.
“It is right that every so often the Government reviews its mergers regime to close loopholes where they arise and this is what these proposals do in the area of national security.
“No part of the economy is off limits to foreign investment and the UK will continue to be a vociferous advocate for free trade and a magnet for global talent.”