The comments were made in an article published this weekend’s Sunday Telegraph by Member of Parliament Lord Paul Myners, whose sentiment reflects a growing backlash concerning globalisation and its impact on national economies.
Lord Myners was contributing to an ongoing national debate that is seeing increasing pressure on the British government to protect home grown businesses from future hostile foreign acquisitions.
Kraft Heinz executives withdrew their €134 billion bid for Unilever in mid-February, after Unilever CEO Paul Polman made public his opinion that the deal under-valued the business and was not a good fit because of the large personal care branch of the business, where Kraft Heinz has no experience.
A lack of regulation in the UK bidding process
But beyond the shortcomings in the deal, the process also highlighted the lack of regulation behind the bidding process itself.
“There needs to be a level playing field,” Lord Myners stated in the comment article, in which he also added his sentiment that there “needs to be a level playing field… in order to protect national treasures.”
“The UK’s takeover rules are the most permissive in the world. They do nothing to discourage the likes of Kraft Heinz seeking to buy businesses to turn a quick profit. Does the Government really believe this constant garage sale is good for the national economy and society at large?” Lord Myners wrote in the comment piece.
Lord Myners sentiment reflects comments made last week by Unilever CEO Paul Polman, who suggested that the British government should be strengthening the rules surrounding takeover bids in an effort to deter hostile takeover bids by foreign businesses.
Will Unilever be subject to further bidding?
As both top-level executives and politicians rally against the current regulations governing the process, the campaigning may have a bearing on how any future bidding pans out for what is still one of the largest consumer goods companies in the world.
Equally, it could put an end to the bidding, ensuring that Unilever remains an independently owned business.
Unilever is dominant in the food, beverage and household good sectors, but its largest division is its cosmetic and personal care business.
It has remained an independent company since its creation in 1929, when the British-owned soap-making business Lever Brothers merged with the Dutch food company Margarine Unie. This paved the way for a combined personal care and food portfolio that remains the mainstay of the business today.