No more ‘wiggle room’ for foreign bidders, says Vince Cable
The announcement from Business Secretary follows US drugs giant Pfizer’s controversial offer for Astrazeneca
Monday 14 July 2014
A crackdown on foreign takeovers of British companies to ensure UK jobs are protected has been laid out by Business Secretary Vince Cable.
Mr Cable is consulting with the Takeover Panel, which supervises bids, on measures that could include financial penalties. He said government needs a “last-resort power” against bids that could be anti-national interest: “There is wiggle room in the existing rules and we want to deal with it so there is no escape clause.”
The announcement from Mr Cable follows US drugs giant Pfizer’s controversial offer for Astrazeneca. Experts previously questioned Pfizer’s promise to keep jobs and research in the UK before Pfizer abandoned its £69bn bid in May.
Separately British drugs group Shire Pharmaceuticals has confirmed it has held talks in New York with US rival Abbvie over a £30bn deal. The talks took place “at an early stage”.
Mr Cable, who revealed his plans on the BBC’s Andrew Marr Show yesterday, comes after the high-profile takeover of Cadbury by US-based Kraft Foods in 2010.
Kraft reversed a promise to keep a factory open in Keynsham near Bristol to the dismay of Cadbury’s hundreds of workers and the then Business Secretary Lord Mandelson.
Mr Cable said: “We need a last-resort power, such that if there is something very clearly against the national interest – and the loss of our research and development in pharmaceuticals is a very good example – the government can in those circumstances intervene.”
Althoug Mr Cable is yet to receive agreement from Coalition partners the Conservatives on his proposals, he explained he was not against companies investing in UK-based firms – just that he wants further protection. He said: “It is good for Britain to have inward investment. We have had very good foreign companies investing here – the Jaguar Land Rovers of this world. We want more of that.”
France recently won EU backing to bolster its takeover protection. Following the General Electric’s $17bn offer to buy French rail and energy group Alstom, the French government in May widened its control over mergers in industries deemed key to France’s national interests. However, the European Commission warned it would monitor the new French law closely.
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