Alex Brummer’s HALLELUJAH! BUT NO THANKS TO POLITICIANS

THe £115billion brawl over control of the British-Dutch consumer products group Unilever has ended in the first round. the would-be buyers, Kraft Heinz, have thrown in the towel, concluding this was a contest they could not win.

the decision to withdraw owes a great deal to the robust response of Unilever chief executive Paul Polman and his board who made it clear from the outset that the idea of their enterprise becoming part of poorly governed, financially driven group controlled by Brazilian billionaires was anathema.

fortunately, Unilever’s board was united enough to resist the entreaties of the financial powers behind Kraft Heinz – the Brazilian Jorge Paulo Lemann and Warren Buffet, the sage of Omaha.

as a longstanding admirer and follower of Buffett I can only think that he was not prepared see his reputation as a believer in brands and decent investors savaged in a bitter contested takeover. that is not the Buffett style.

the episode demonstrates that even in the bare knuckle arena of global takeovers a strong defence can deliver results.

More is the pity that when Britain’s top high-tech company arM was bought by Japan’s Softbank in the summer of 2016 we saw capitulation in the face of an enticing bid rather than a fierce defence.

We will never know what the attitude of theresa May’s government would have been to the approach for Unilever. But what is remarkable was the silence of the political classes. One might have hoped that a government that has declared itself opposed to foreign takeovers would have been shouting foul from the ringside at the prospect of the British-Dutch giant being swallowed by a financially driven behemoth with no known interest in ethical capitalism.

Moreover, for Unilever to have been forced to surrender its independence as Britain plots a new global future outside the european Union would have been a disaster. It is companies such as Unilever – with reach into the fastest growing markets in the world from asia to Latin america – on which Britain’s prosperity relies.

Unilever may only employ 7,500 people in Britain these days but in its branding, marketing, research and development and food and product safety is regarded as an exemplar. and all that it earns overseas feeds back into Britain’s balance of payments, our tax system and supports the dividends that pay private-sector pensions.

the name of Kraft alone should have set off alarm bells in Whitehall, Westminster and among the competition authorities. When Kraft bought Cadbury in 2010 it solemnly promised to respect the brand and keep open the Somerdale factory near Bristol where the Wispa bar was manufactured.

It moved production to Poland, reneged on its promises to preserve Cadbury’s spiritual home at Bourneville and shut UK corporate headquarters. the Commons busi- ness committee under Iain Wright has done such a fine job in bringing corporate sinners Sir Philip Green and Mike ashley to book. It also has a duty to examine in detail the impact of overseas takeovers on UK plc.

Corporate governance, ethical business practices and all that we hold dear in British capitalism are all but unknown among the three Brazilians who control 3G, the ultimate owners of Kraft Heinz.

the motivations behind the Kraft Heinz approach were crystal clear. the owners are stuck with two legacy companies, one famous for inedible cheap cheese products the other for 57 ex-growth brands.

Both are branded goods firms stuck in the past in an era when people look for nutritional and innovative products.

Unilever offers strong brands such as Ben & Jerry’s and Dove and the growth markets that would have added lustre to the dead weight of its rival’s existing portfolio.

there is much about Unilever that can be criticised including its impenetrable corporate bureaucracy and the attempt to impose higher prices for Marmite on the UK consumer after Brexit. But fundamentally it is a company which its British and Dutch investors, management and employees can be proud of.

It has been recognised by both parties that its independence is vital to the public interest.