Concerns are growing within the UK business community regarding Business Secretary Jonathan Reynolds' approach to foreign takeovers, particularly as a significant number of FTSE 350 companies are being acquired by private equity firms and overseas entities. Critics argue that a tougher stance is needed to protect national interests and vital commerce.
The potential sale of Segro, described as Britain's data centre champion, to San Francisco-based Prologis for £14 billion has drawn particular criticism. This move is seen by some as a potential misstep, echoing concerns raised in the past over the sale of UK technology firms like Arm and DeepMind to American buyers. The speed at which control of critical assets is shifting to financially driven ownership models is prompting calls for public debate.
Past failures, such as those experienced at Thames Water and British Steel, are cited as cautionary tales of how such deals can go wrong when financially motivated ownership takes precedence over operational stability and public interest. The acquisition of the Royal Mail by Daniel Kretinsky, a figure whose fortune was reportedly built on Russian energy pipelines, serves as another example of a controversial takeover. Despite assurances of investment, the Royal Mail has faced significant operational challenges, with regulator Ofcom reporting poor service delivery metrics for first-class and second-class letters. Ofcom has launched a probe into the company's performance following substantial fines for past failures.
Other companies facing potential overseas acquisition include Intertek, which was reportedly sold to Swedish firm EQT, and easyJet, which has attracted interest from hedge fund Apollo. Critics dismiss proposals for secondary listings in London as mere tactics to facilitate deals, suggesting that a more robust regulatory framework is required. The European Union is seen by some as a more proactive regulator in such matters, with hopes that it might intervene in the case of easyJet.
With an estimated £70 billion in listed assets sold this year, many to unaccountable financial players, the narrative of 'flipping and exploitation of assets' is becoming a recurring theme. The argument is that such buyers often prioritize financial gain over investment needs, public interest, and consumer welfare. The current business secretary's tenure is under scrutiny as the UK navigates a period of significant asset sales amidst a global economic landscape where foreign capital plays a dominant role.