Extracts from committee stage (Lords) (day 4) of the United Kingdom Internal Market Bill - Nov 4
Thursday, 5 November 2020 08:12
Baroness Hayter of Kentish Town (Lab):...There has been a catalogue
of such hostile takeovers, such as of GKN by Melrose in 2018—surely
a bleak day for British industry, with perhaps 6,000 jobs with the
UK’s third-largest engineering company suddenly in the hands of new
owners following a very narrow vote by shareholders in favour of
the takeover of a 250-year old company. That vote was swung by
hedge funds and arbitrageurs who owned 25% of the shares, which had
been very recently...Request free trial
(Lab):...There has been a catalogue of such hostile
takeovers, such as of GKN by Melrose in 2018—surely a
bleak day for British industry, with perhaps 6,000 jobs with the
UK’s third-largest engineering company suddenly in the hands of new
owners following a very narrow vote by shareholders in favour of
the takeover of a 250-year old company. That vote was swung by
hedge funds and arbitrageurs who owned 25% of the shares, which had
been very recently acquired. Their short-term interest in making a
quick profit came at the expense of the jobs, skills, research and
development of this major industrial company, to the detriment of
UK plc. Needless to say, the result has not been
good. Not all takeovers are bad, but when Melrose’s own website
describes its strategy as “Buy Improve Sell”, with its objective to
achieve a significant increase in shareholder value often in as
little as three to five years, one has to ask whether this is in
the interests of UK plc...
(Con): I rise to speak to Amendment 153 in the name
of the noble Baroness, Lady Hayter. This is a new clause relating
to mergers that might affect the internal market. She may have a
reasonable point that this is a matter of public policy about which
we should be concerned. It is odd the way mergers involving an
overseas player without a UK business cannot be stopped under
merger law—think Cadbury, think ARM, as well as
GKN Melrose, which the noble Baroness, Lady
Hayter, explained was a particularly heinous example—because there
is not the necessary lessening of competition. Although she did not
say so, perhaps there is a parallel concern about takeovers
important to one of the devolved nations or to a particular R&D
base...
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