Whenever a UK-based-or owned company is taken over by a foreign competitor, commentators whine repeatedly about the country not doing enough to support them. The latest well-publicised example is US drugs giant Pfizer wanting to buy the smaller UK’s AstraZeneca.
Why are politicians getting involved in this? Shouldn’t they keep their noses out of what is a business transaction, and deal with issues that they should be dealing with in Parliament?
This collective whining about the loss of UK business may matter if you are an employee of such companies that are subject to these takeovers, but should the rest of us care that much?
For far too long, a lot of UK businesses were managed very badly. Throughout history, many were often crippled by poor industrial relations, as there was a clear ‘them and us’ culture between management and trade unions. Policies enacted from successive central governments also put local firms at a disadvantage.
As many locally-owned businesses went to the wall because they often failed to change the way they worked, others faced the choice of foreign takeovers. Of course, some takeovers didn’t always work, but over time, they became an essential part of UK corporate life.
The collective handwringing from politicians, and commentators on Pfizer‘s takeover of Astra Zeneca are missing a crucial point. As with US food giant Kraft’s swallowing up of much smaller UK confectionary company Cadbury shows, it’s often the ones with deeper pockets who win out. Astra’s board, after weighing up the pros and cons of the bid, may eventually accept the deal.
No other country in the industrialised world would have allowed many of its vital infrastructure such as water, gas and electricity to be sold to the market. Many foreign energy companies saw opportunities where the UK practically gave up. It doesn’t necessarily matter who the company is or where they are from, it’s whether they manage those services well.
Many who are opposing the latest takeovers are fighting the battles which have already been lost. Very few people complained when they were paid substantial amounts of cash to take their businesses off their hands and sitting on a huge pile. Now they are complaining with the fact that the country will be incapable to retain and invest on what’s left. The reality is a significant number of foreign companies are helping to prop up an ailing economy. Without them, the UK would become a poorer country.