Fresh from defending Unilever against an unsolicited $143 billion takeover attempt by Kraft Heinz, CEO Paul Polman said the British government should ensure a level playing field for target companies.
“We’re not talking about protection; we are saying that when you have a situation like this, with a national champion, there should be a level playing field,” Polman told Reuters on Tuesday.
One key feature of UK takeover rules is that once an expression of interest for a company has been made, suitors have only 28 days in which to make a formal bid, or they must walk away for six months. During those 28 days, the target company is closely monitored by the government’s takeover panel.
Unilever, jointly based in Britain and the Netherlands, said target companies should have more time in which to defend themselves. It wants the UK Takeover Code changed to consider the interests of stakeholders beyond shareholders, as is the case in some other countries.
Dutch paint company Akzo Nobel, for example, rejected a $22 billion takeover offer last week by larger U.S. rival PPG Industries, saying the unsolicited approach was not in the interest of stakeholders, including its shareholders, customers and employees.
A spokeswoman for the UK government’s Department for Business, Energy & Industrial Strategy said mergers and acquisitions played an important role in driving investment, growing businesses and keeping UK businesses competitive.
“We want the UK to be the best place in the world to invest and do business. This means creating the conditions for British businesses to prosper and grow, both here and on the world stage,” the spokeswoman said in an email.
When running for the leadership of the Conservative Party after the June 2016 Brexit vote, Theresa May, then the home secretary, said that the government should be capable of stepping in when a foreign company tried to buy a business that was important to workers and communities.
She singled out previous bids by an earlier iteration of Kraft and U.S. pharmaceutical company Pfizer (PFE.N) to buy British companies.
“Because as we saw when Cadbury’s – that great Birmingham company – was bought by Kraft, or when AstraZeneca was almost sold to Pfizer, transient shareholders – who are mostly companies investing other people’s money – are not the only people with an interest when firms are sold or close,” May said at the launch of her campaign to be prime minister.
Since then, May has said that she will not pick winners or prop up failing companies, but that Britain should support and promote strategically important industries as other major economies do.
Kraft Heinz, headquartered in Pittsburgh and Chicago, walked away from a fight with Unilever last month, just two days after its $143 billion bid – and Unilever’s rejection – was made public.
Polman’s comments were earlier reported by the Financial Times.
By Martinne Geller
Source: Reuters
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