McCluskey: Government must strengthen takeover laws or decent companies will leave the UK - and jobs will go
Takeover laws are so weak in the UK that big companies are considering relocating to other national jurisdictions to protect themselves from predatory bids, according to the country's biggest union, Unite (Monday 10 April).
Unite has called for the government to act to support companies that are listed in the UK amid fears that a diminished sterling and uncertainty over Brexit has heightened vulnerability to ‘vulture’ capital takeovers.
Unite has been calling for a Takeover Commission to oversee bids, assessing them against the wider employment and social ramifications of purchases, to offer protection for jobs and businesses that have been rendered ‘sitting ducks’ by the UK’s lax takeover laws.
The union renewed its call following the intervention by the head of Unilever, Paul Polman, who is warning that the Anglo-Dutch conglomerate may be forced to de-list from the London stock exchange in order to solely list in the Netherlands where takeover laws are stronger in a bid to avert hostile hedge-fund bids for the business. Unilever is presently listed on both the London and Amsterdam stock exchanges.
Unite has thousands of members employed by Unilever in the UK.
Echoing the Unilever CEO’s concerns, Unite general secretary Len McCluskey said: “The current protections for UK listed companies from unwelcome buyouts are woeful. But with both Brexit and a diminished pound placing our companies in a very vulnerable position, the risk to British jobs and businesses has been heightened.
“Other countries value their listed businesses and act to protect them by demanding that takeovers are assessed for their wider economic, social and employment issues that arise from purchases.
“In the Netherlands buyout bids are subject to an assessment of the impact on all stakeholders including customers, the environment and most importantly workers. British workers and communities deserve nothing less.
“Unite campaigned hard for protections when Kraft drove through its bid for Cadbury but the coalition government failed to act then. The government must not do the same again now.
“When one of our biggest companies, Unilever, considers that it may have to seek haven in the Netherlands because it fears that by remaining listed in the UK it is a sitting duck for predatory hedge funds, surely the government must listen?
“We need stable ownership of our businesses, with investment in jobs and skills – not the asset-stripping or debt burden that sadly all too often accompanies hostile purchases.
“It is high time that the UK put some protections in place for businesses that want to list and trade in the UK. A strong economy needs an active government so we say again to the government, signal that you will support jobs and UK business by establishing a Takeover Commission.
“This government has made much play of having an industrial strategy – well let’s see this is action. Do as other nations do and act to protect our jobs and businesses in these uncertain times.”
Unite first called for a Takeover Commission to be established in 2012 in order to prevent future Cadbury-style buyouts of iconic British companies. The union renewed its call in light of the comments made by Unilever's CEO Paul Polman who is urging the government to act to protect UK businesses
(http://www.telegraph.co.uk/business/2017/04/08/unilever-chief-paul-polman-hits-fast-money-hedge-funds-prepares/).
