Hunting season is officially open for America’s gun-totin’ multinationals.
General Electric is looking to land the trophy of Alstom in France, while Pfizer’s now officially come to Britain in the hopes of hauling AstraZeneca’s carcass back to hang above the doors of its corporate headquarters.
Care to guess who’s having an easier time of it? France is the nation that decided yoghurt was a strategic national asset, to keep Danone out of the cross-hairs of the likes of Pepsi and Kraft, both of which have at various times been linked to possible bids for the company.
True to form, the French government has warned GE that it will block any bid for Alstom that it doesn’t like. That might just mean any bid at all from GE, whatever its chief executive Jeff Immelt had to say when he met with French president Francois Hollande, given France’s preference for a European solution involving Siemens.
By contrast the question Pfizer has raised about Astra’s future as an independent company here is being brushed off as a “commercial matter between two companies”. Even though it concerns a sector – pharmaceuticals – deemed strategically vital to Britain’s future economic prosperity.
Let’s make one thing clear from the outset. I’m not about to argue for importing France’s approach to takeovers into Britain, not least because granting companies a pass when it comes to bids grants their managers a pass when it comes to doing their jobs.
UK plc needs the complacency in the boardroom that this leads to like teenaged boys need Pfizer’s Viagra.
The banking crisis is a graphic demonstration of the damage that can be caused by the self-regard and hubris of a corporate elite, in a sector deemed vital to the UK’s economic future, when it is coddled and cosseted.
Astra, which hasn’t been immune from the practice of handing over outsized packages for undersized performance, has been trying the patience of its shareholders for some time now.
It’s perked up a bit of late, and has some very interesting potential treatments in development. But investors could still be forgiven for questioning whether the company’s senior figures are capable of delivering on the promise these may offer.
It’s even debatable as to whether Astra should be considered a British company. Its operations are global and it’s run by a Frenchman. Pfizer is no different when it comes to America. It’s run by a Brit and such is its loyalty to Uncle Sam it prefers to spend the billions it has overseas on an expensive and potentially value-destructive deal with its rival rather than bring overseas profits home and pay tax on them.
All the same, it’s disturbing that the impact of a deal on the UK (and thousands of its citizens work at these two companies) is barely being discussed in the corridors of power. The interests of these two companies’ shareholders and executives take priority over those of the rest of the country. Perhaps we should think about changing that.
Can you spot the difference with Royal London?
“Recognisably Different” is the bold assertion splashed across the the front of Royal London’s annual report. But is it?
RL believes it can say that because it is one of the last remaining policyholder-owned mutuals in the life assurance sector. There is a widespread view that businesses owned by customers like this ought to do a better job for them.
But that has been challenged by recent events at the Co-op, which paid like a plc for performance that would embarrass even the most dysfunctional local authority, spent its members’ money on a succession of duff deals, and then wasted more on crazy corporate projects.
Is Royal London recognisably different from that? Take the issue of pay. Despite cutting the “mutual dividend” paid to its members by £7m last year, its chief executive Phil Loney saw his package rising by a staggering 51 per cent to £2.6m.
There’s also a questionable, if not crazy, corporate project on the boil in the form of a rebrand that the company admits will be expensive plus a cricket sponsorship whose benefit to members is debatable at best.
In reality, RL is a world away from the Co-op. Its failings are actually more in tune with the common or garden failings found among British plcs. Mr Loney is right when he says the freedom RL has from the demands of shareholders for short-term profits presents the insurer with an opportunity. But to capitalise on that it needs to be recognisably different in terms of its practice, not just its talk.
Standard Life keeps up its standards to blast Barclays
Standard Life proved last week that it isn’t necessary for a savings company to be mutually owned to act in its customers’ interests. In fact, Standard has become noticeably more active in discharging its duty on behalf of those whose money it invests since it surrendered its mutual status. A case in point comes in the form of its unprecedented public criticism last week of Barclays’ indefensible decision to pay more to its investment bankers for producing less.
And the goodwill it has generated by defying City protocol to air its grievances in public should be more than enough to sustain it through any sulkiness from Barclays.