Sector News

Government would oppose any takeover of BP – FT

April 27, 2015
(Reuters) – Britain’s outgoing government has told BP Plc (BP.L) that it wants the company to remain a British industrial champion and it would oppose any takeover of the oil producer, the Financial Times reported.
The message follows the $70 billion (46 billion pound) deal to acquire rival producer BG (BG.L) by oil major Royal Dutch Shell (RDSa.L), which has sparked speculation of a larger wave of consolidation similar to the one at the end of 1990s during another oil price decline.
British officials have said the government would be “sceptical” about any takeover – even if it involves Royal Dutch Shell – because it wants the country to have two big global oil companies, the FT reported.
Officials acknowledge the government has few formal powers to block a bid, but a senior City figure briefed on government thinking said making its opposition so clear may deter any foreign bidder from offering a bid, the FT reported.
BP said it had no comment on the report. Representatives at 10 Downing Street declined immediate comment.
The FT quotes the government as saying: “The government talks to a wide range of UK businesses, as you would expect. It is in the UK’s interest to have British companies competing and succeeding at home and abroad.”
The government, led by Conservative Party Prime Minister David Cameron, is facing election on May 7 and is neck to neck in approval ratings with the rival Labour Party.
The warning to any potential bidder for BP would not be the first of its kind. Five years ago, when BP’s stock plummeted because of an oil spill in the U.S. Gulf, the UK government also analysed the likelihood of a potential hostile bid for BP and ways to respond to it, industry sources have said.
BP has sold $50 billion worth of assets to pay off the damages caused by the spill and could still face billions in additional claims. The perceived weakness has sparked speculation that a cash-rich company like ExxonMobil (XOM.N) could attempt to acquire BP.
However, BP’s U.S spill liabilities together with a heavy exposure to sanctions-hit Russia are seen as the main deterrents of any potential hostile bid for the company.
BP has said it is under no pressure to make acquisitions after the BG-Shell deal. Last week, Chief Executive Bob Dudley told CNBC that BP had not been approached by any company.
Britain has been pursuing a laissez-faire approach to takeovers, but toughened its stance last year following a bid by Pfizer (PFE.N) for AstraZeneca (AZN.L). Pfizer eventually dropped the offer for its Anglo-Swedish rival.
(Reporting by Shivam Srivastava in Bengaluru and Dmitry Zhdannikov in London; Editing by Larry King and Leslie Adler)

comments closed

Related News

August 23, 2019

The higher purpose of being a CEO

Borderless Leadership

LinkedIn Twitter Xing EmailWhen I left my second large company experience to become President of a small manufacturing company I did so driven by ego; I fancied the title. Soon […]

August 23, 2019

As Brexit nears, Britain’s drugs, devices and pricing regulators seek the exit

Life sciences

LinkedIn Twitter Xing EmailFirm details on exactly how the U.K. will regulate new medicines is still to be decided after it leaves the EU later this year (caveats on timing […]

August 23, 2019

The Simply Good Foods Company acquires Quest Nutrition for $1bn

Food & Drink

LinkedIn Twitter Xing EmailThe Simply Good Foods Company, the owner of Atkins-branded food products, has secured a deal to acquire protein snack maker Quest Nutrition for $1 billion. Quest, which […]

How can we help you?

We're easy to reach