BUYING BRITISH

by MONITOR
IN a mere 48 hours earlier this week potentially successful bids were made by foreign investors for three major British enterprises. Spain's Telefonica bid 17.7 billion pounds for the British mobile group O2 while Deutsche Telekom was considering whether it should make a counter-offer; there was news of a strong Japanese interest in Pilkington from Nippon Sheet Glass and of a possible take-over of P&O by Dubai Ports World. Meanwhile the future of the London Stock Exchange remains in the air with Euronext believed to be still keenly interested. What goes on? How can these quite successful companies be allowed to fall into the hands of foreign owners as so many others have already done? If we were talking about France and French companies it is unlikely that they could be poached so easily; remember the national crisis that followed a rumour that PepsiCo was interested in taking over Danone. Britain, apparently, is quite relaxed about selling the family silver on the principle that what matters is not foreign ownership but British jobs. If the new owners want the company they buy in order to make it more efficient and profitable, this should benefit workers and shareholders alike. The principle has been shown to work in the City of London where countless British banks and other financial institutions have expanded and prospered under foreign ownership. However, manufacturing and some service industries may be a different case when labour costs in the UK are seen to be so much higher than elsewhere. In the end it must always be kept in mind that British investors are just as busy buying businesses abroad as their foreign counterparts are in the UK and that their freedom to do so depends on the existence of as many completely open economies as possible.