At last, curb on foreign takeovers of key firms
British firms with ‘strategic’ importance will be given new protections against foreign takeovers under proposals published today.
Business Secretary Greg Clark will announce tougher rules to prevent energy, telecoms and technology firms falling into the hands of hostile powers.
Under existing rules, ministers can only ‘call in’ bids for firms with a market share above 25 per cent or with a turnover of £70million or more. Both these tests will be lowered in a bid to close a gaping loophole.
The consultation will also propose new ‘speed bumps’ allowing regulators to intervene earlier in the takeover process and demand information.
The measures will fulfil a pledge in the Tory manifesto to protect ‘critical national infrastructure’. There are also concerns at the top of the Civil Service and among security officials over the potential security implications of growing investment from the Far east.
Many firms investing in Britain have strong links to – or are owned wholly or in part by – the Chinese state.
Officials fear foreign governments could use part- ownership of some infrastructure, such as electricity transmission or production, to put pressure on ministers.
Mr Clark has powers under the 2002 enterprise Act to refuse takeovers that damage national security.
In their manifesto the Conservatives said British firms should be protected against hostile takeovers. This was dubbed the ‘Cadbury Clause’ after US giant Kraft’s contro- versial £11.6billion takeover of Cadbury in 2010.
At the time Kraft insisted more jobs would come to Britain but a week after the deal was completed it announced one of Cadbury’s key factories would be shut.
Details of the crackdown came as the new owners of Vauxhall announced plans to slash hundreds of jobs just 77 days after taking over the company, despite saying no cuts were planned.
French car maker PSA, which owns Peugeot and Citroen, plans to axe 400 jobs at the Vauxhall Astra plant in ellesmere Port, Cheshire, blaming falling demand and high manufacturing costs. It has heightened fears for the future of the plant and for the rest of the 4,800 workers employed by Vauxhall and its sister brand Opel across the UK.
Last night unions and politicians demanded the Government step in to help secure jobs as Theresa May said she was ‘disappointed’ by the decision.
PSA bought the lossmaking arm of General Motors, including Vauxhall and Opel, in a deal finalised on August 1.
It said it planned to make around £1.5billion a year savings. But asked in March whether the savings could be made without job cuts, PSA chief executive Carlos Tavares said: ‘They are not based on job cuts.’
he also pledged to stick with agreements made between General Motors and unions, which included continuing to build the Astra at ellesmere Port until at least 2021.
‘Critical national infrastructure’