Unilever wants stronger UK protection from foreign takeovers
The company’s CEO Paul Polman told Reuters yesterday: "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,"
Unilever bluntly rejected Kraft Heinz's offer of $143bn (€134bn) to take over the firm. Although both companies issued a statement saying the proposal for a merger had been “amicably” withdrawn, Unilever's shares fell by 7% after the announcement, which sparked fears about the sovereignty of beloved British brands, particularly in the uncertain aftermath of Brexit.
Unilever manufactures many brands that are household names in Britain, such as Marmite, Lipton tea, Knorr stock cubes, Hellman’s mayonnaise and Dove soap.
Although Downing Street denied it had a hand in Kraft Heinz dropping its bid for Unilever, Theresa May has indicated in the past that she believes the government has a duty to step in if it feels a business deal goes against the interests of the country.
Before becoming prime minister, she said Kraft should have been blocked from taking over British confectionery brand Cadbury, and she criticised the government’s pledge of non-interference in the attempted buyout of AstraZeneca, the UK's second biggest pharmaceutical manufacturer, by US pharmaceutical firm Pfizer.
"It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry, and AstraZeneca is one of the jewels in its crown," May said.
"Yet two years ago the government almost allowed AstraZeneca to be sold to Pfizer, the US company with a track record of asset stripping and whose self-confessed attraction to the deal was to avoid tax.
"A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain."
In the UK, it is the independent Takeover Panel which supervises and regulates takeovers of publically listed companies (ensuring “fair treatment for all shareholders in takeover bids”) while the 2002 Enterprise Act means government ministers can only block mergers on the basis of three issues: financial stability, media plurality and national security.
According to Reuters, Unilever, which is jointly headquartered in London and Rotterdam, pointed to the example of the Dutch system where adjudicators take into account the interests from a broader range of stakeholders.
Last week, Dutch paint company Akzo Nobel rejected a $22 billion (€22bn) takeover offer by US firm PPG Industries because a takeover would not be in the interest of shareholders, customers and employees.
Following the Kraft Heinz proposal, the UK business secretary Greg Clarke pledged to publish draft proposals that outline how the government would react to foreign takeover bids.
