RUTH SUNDERLAND: On British companies Weak Pound Spurs Raids

One negative effect of sterling’s weakening is that it can trigger further extortionate attacks on British firms.

Foreign buyers with sharp eyes are swarming through on the UK stock market as bargain-hunters through the aisles at TK Maxx.

A number of top tech firms have faced a bullseye in their back this summer such as cybersecurity company Darktrace and IT firm Micro Focus.

They’ll not be the last. Making sure Britain isn’t sucked clean of corporate jewels is the responsibility of Jacob Rees-Mogg. The Business Secretary who is appointed to the post can prevent damaging takeovers by utilizing legislation known as the National Security and Investment Act which was enacted this year.

The question is, can the person using these?

He was the predecessor to Kwasi Kwarteng was the one who took an uncompromising position. It’s not fair to draw any conclusions about Rees-Mogg’s performance, as he has not found his feet underneath the workstation. His first actions however, was to veto the PS5.6billion acquisition of Inmarsat by an US competitor. Another satellite operator, OneWeb, which is of the Government is set to be sold to the French state-owned operator Eutelsat.

These deals are currently in the process even the satellite technology is a key UK asset. In the case of Inmarsat, Rees-Mogg demanded’remedies’ like guarantees of increased R&D investment and the creation of skilled jobs in this case. However, these pledges could be useless.

US Private equity barons from Advent International took over British defence firm Cobham with a series of glib assurances. They didn’t stop them from in slicing up their targets in just 18 months. But the government doesn’t seem to have learned anything from the experience. Advent was given the green signal to purchase Ultra Electronics, which makes submarine-hunting technologies, for PS2.6billion. Advent is currently considering the possibility of acquiring fraud prevention tech company GB Group.

In the wake of shoulder-shrugging by government, the majority of UK defense industry is controlled through US investors. While we have been long-standing allies but this loss of independence nation-wide capability and stewardship is quite extraordinary.

Since the Big Bang in the 1980s The UK markets have probably been the most welcoming towards foreign investors. In some cases it has been great. European corporations like Akzo-Nobel who bought the former ICI paints companies and has been very successful as owners, as has some from those German and Japanese motor industry.

There has been little effort in separating prudent long-term buyers and the opportunists who are piratical. Shareholders within the City are frequently accused of not understanding or even appreciate the importance of technology and engineering. Ministers often view the acquisitions of foreign companies through their own limited view.

Do you remember British Steel? It was at the edge of collapse in 2019 it was in danger of collapse due to the loss of tens of thousands of jobs. The government was awed by the possibility of a Chinese takeover with wholeheartedly, despite obvious risks.

The next major issue that will come across his desk is the acquisition of semi-conductor company Newport Wafer Fab by Chinese-backed Nexperia. It is time to recognize the absurdity of permitting China to control the sale and demand that the deal be dismantled.

Politicians are at risk of falling for the lure of signing huge deals in exchange for praise which allows them to say that their policies created a UK attractive and inviting to business, thanks to their policies.

Kwarteng’s Big BANG 2.0 within the City and his desire for growth could encourage this drive. However, true growth requires support by British technology, innovations, research, and the creation of jobs. Selling off to foreign invaders do not guarantee prosperity.

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