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Stronger rules on takeovers call

Gov’t must act says Unite
Ryan Fletcher, Tuesday, February 21st, 2017


Food giant Kraft Heinz abandoned “predatory” plans to buy Unilever on Friday (February 17), a decision that Unite said would come as a “relief for thousands of workers across the UK”.

 

Dutch-Anglo firm Unilever said it saw “no merit, either financial or strategic” in accepting Kraft Heinz’s offer, worth around £115bn.

 

If the deal, which Unite warned Unilever against taking, had gone ahead it would have been one of the biggest in corporate history.

 

Kraft Heinz spokesman, Michael Mullen, said, “Kraft Heinz’s interest was made public at an extremely early stage.

 

“Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction. It is best to step away early so both companies can focus on their own independent plans to generate value.”

 

US-based firm Kraft Heinz has a controversial acquisition history in the UK, with the Financial Times reporting that Theresa May asked officials to examine the now-scrapped bid after news of it emerged.

 

In 2010, Kraft’s buyout of Cadbury prompted the government to strengthen legislation on the sale of UK companies to foreign firms, however MPs have warned that current rules are not powerful enough to prevent asset-stripping buyouts.

 

Cadbury’s

The 2011 changes, which included more protections for target companies and provisions for forcing bidders to reveal their intensions on matters such as job cuts, came after Kraft decided to close Cadbury’s Somerdale factory just a week after pledging to keep the site open.

 

Last July, Theresa May promised an industrial strategy that could be used to block hostile takeovers.

 

Unite general secretary, Len McCluskey, said it is time for the Prime Minister to deliver on that promise.

 

“This will be of relief to thousands of workers across the UK. But this unsettling few days has once again illustrated the need for takeover rules to be strengthened to take into account issues like jobs, consumers and the national interest,” McCluskey said.

 

“How many scares must the government put UK workers through before they actually do as they have promised which is to make the takeover process socially responsible? If the government in the Netherlands can do this, then surely the government in the UK can do this too.  Our workers and communities are just as deserving of government support.”

 

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