Workers’ interests should be strengthened in takeovers – Unite
UK firms are susceptible to unwanted hostile takeover bids, the union has warned.
Changes should be made to strengthen the interests of workers when British firms face “casino-style” takeovers, the country’s biggest trade union has said.
Unite called for reforms to regulations on mergers and takeovers after Unilever’s decision to move its headquarters to Rotterdam and calls for the Government to block Melrose’s hostile takeover bid for engineering giant GKN.
Shareholders of GKN have until next Thursday to accept Melrose’s offer.
Eight years after one great British name, Cadbury, was lost to the country another manufacturing stalwart, GKN, is at risk from a predatory takeover Len McCluskey, Unite general secretary
A report by Unite said UK firms were particularly susceptible to unwanted hostile takeover bids compared with those in the Netherlands, France and other European countries because of the low use of protection mechanisms available to British companies.
As a result short-term interests of shareholders trump long-term investment and wider stakeholder interests, including those of the workforce and local communities, said the report.
Unite general secretary Len McCluskey said: “Eight years after one great British name, Cadbury, was lost to the country another manufacturing stalwart, GKN, is at risk from a predatory takeover.
“Our takeover law is simply inadequate when it comes to protecting British companies. What happens in this country would not be allowed to happen in France, Holland or Germany, but our Government refuses to give our jobs and businesses the same protection.
“Instead, shareholders’ interests reign supreme in UK takeover situations regardless of whether it’s in the national interest or the long-term interests of a company, its workers, customers and suppliers.
“As we have seen recently with Unilever moving its headquarters to Rotterdam, business will vote with its feet because Theresa May’s Government sits on its hands.
“City speculators looking to turn a quick buck know that the UK is open to their ‘casino-style’ capitalism. This is wrong: finance should be the servant of the economy, not the other way around.”
"Our takeover law is simply inadequate when it comes to protecting British companies" says @LenMcCluskey | 'Inadequate' UK lags behind with protections against 'casino' style takeovers, finds Unite report https://t.co/oYiWVXUzCU pic.twitter.com/zTtsTM3hM2— Unite the union (@unitetheunion) March 23, 2018
The report proposes a series of options to strengthen the voice of workers and longer term interests, including making firms opt out of rewarding long-term investors with additional voting rights as an anti-hostile takeover measure.