RUTH SUNDERLAND: Weak pound encourages raids on British companies

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Written By Sristi Dumre

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The depreciation of the pound will, regrettably, lead to more rapacious raids on British businesses.

Sharp-elbowed foreign investors are swarming the UK stock market like TK Maxx aisle bargain seekers.

Over the summer, a number of well-known tech companies, including cybersecurity operator Darktrace and IT business Micro Focus, had targets placed on their backs.

They will not be the final. Jacob’s Rees-responsibility Mogg is to ensure that Britain does not lose its corporate treasures. The National Security and Investment Act, which went into effect this year, gives the new Business Secretary the ability to prevent disastrous takeovers.

Will he employ them is the real question.

Kwasi Kwarteng, his predecessor, adopted a dovish stance. Rees-Mogg has barely gotten his immaculately coiffed feet under the desk, so it would be inappropriate to draw any inferences from him. But one of his first actions was to approve a US rival’s £5.6 billion acquisition of Inmarsat. OneWeb, a different satellite company partially owned by the government, is slated to be sold to French-state-backed operator Eutelsat.

Even though satellite technology is a significant UK asset, these acquisitions are currently in process. Rees-Mogg pushed on “remedies” such as assurances of increased R&D spending and skilled jobs here in the case of Inmarsat. However, these promises can be useless.

With such similar glib assurances, US private equity tycoons at Advent International acquired the British defense corporation Cobham. Within 18 months, they were still slicing up their prey. However, it appears that the government has not retained any lessons. Advent has been given the go-ahead to acquire Ultra Electronics for £2.6 billion, which produces technology for finding submarines. It is currently considering a raid on fraud prevention technology expert GB Group.

A large portion of the UK defense industry is owned by US investors as a result of government shoulder shrugging. Despite the fact that we have been partners for a very long time, this national capability and stewardship abandonment is unprecedented.

The UK stock market has undoubtedly been the most accessible to a foreign capital since the 1980s Big Bang. This has sometimes been really great. European corporations like Akzo-Nobel, which acquired the former ICI Paints operations, as well as some of the German and Japanese players in the automotive industry, have been excellent owners.

However, very little has been done to distinguish between loyal, long-term customers and opportunistic pirates. Shareholders in the City are frequently charged with not appreciating or even comprehending engineering and technology. Ministers also frequently view foreign takeovers through their own limited perspective.

Do you recall British Steel? In 2019, it was on the verge of failure and facing the loss of thousands of jobs. Despite the apparent risks, the government was open to a Chinese takeover.

The next significant transaction to come across Rees-desk Mogg’s is Nexperia’s acquisition of Newport Wafer Fab, a semiconductor company with Chinese backing. He ought to order the deal to be halted after realizing the foolishness of letting China maintain control.

Politicians are prone to the temptation of rushing through significant agreements for publicity; this enables them to claim that their policies have made the UK more appealing and business-friendly as a result of them.

This inclination might be bolstered by Kwarteng’s Big Bang 2.0 in the City and his drive for expansion. Real growth, however, necessitates support for British tech, innovation, research, and employment. There is no path to wealth in selling fire to foreign marauders.

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