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| UK government should help companies targeted by foreign bids, says Unilever | |
| (about 13 hours later) | |
| The boss of Unilever has urged the government to provide more help for Britain’s largest companies when they are targeted by foreign takeovers. | The boss of Unilever has urged the government to provide more help for Britain’s largest companies when they are targeted by foreign takeovers. |
| Paul Polman, chief executive of Unilever – the maker of Marmite, Magnum ice cream and Dove soap – said there should be a level playing field for British companies so they could enjoy the stronger levels of protection that businesses received in other countries. | Paul Polman, chief executive of Unilever – the maker of Marmite, Magnum ice cream and Dove soap – said there should be a level playing field for British companies so they could enjoy the stronger levels of protection that businesses received in other countries. |
| Last month Unilever was the target of a £115bn takeover bid by Kraft Heinz, which was backed by Warren Buffet and private equity firm 3G. Kraft Heinz withdrew the offer after it was firmly rejected by Unilever, amid reports the UK government was concerned about the ramifications of a deal. | Last month Unilever was the target of a £115bn takeover bid by Kraft Heinz, which was backed by Warren Buffet and private equity firm 3G. Kraft Heinz withdrew the offer after it was firmly rejected by Unilever, amid reports the UK government was concerned about the ramifications of a deal. |
| However, Unilever believes UK takeover rules should be changed to provide more support for the company that is targeted by a foreign bid, for example enabling it to have more time to build a defence against the offer and encouraging directors to consider the interests of other stakeholders – such as employees – rather than just shareholders. At present directors claim it is their fiduciary duty to focus on the interests of shareholders when they receive a takeover bid. | However, Unilever believes UK takeover rules should be changed to provide more support for the company that is targeted by a foreign bid, for example enabling it to have more time to build a defence against the offer and encouraging directors to consider the interests of other stakeholders – such as employees – rather than just shareholders. At present directors claim it is their fiduciary duty to focus on the interests of shareholders when they receive a takeover bid. |
| Polman told the Financial Times: “We’re not talking about protection. We are saying that when you have a situation like this, with a national champion, there should be a level playing field.” | Polman told the Financial Times: “We’re not talking about protection. We are saying that when you have a situation like this, with a national champion, there should be a level playing field.” |
| Countries such as the US, France and the Netherlands have more safeguards in place to protect “national champions” and block takeovers. In the Netherlands companies must consider a broader range of stakeholders when analysing a bid. | Countries such as the US, France and the Netherlands have more safeguards in place to protect “national champions” and block takeovers. In the Netherlands companies must consider a broader range of stakeholders when analysing a bid. |
| The government is planning to publish draft proposals in the coming weeks that would outline how it would respond to foreign takeovers and bids for key infrastructure projects in the future. Theresa May has previously said the government should have more powers to block predatory bids for companies in important industries for the economy. The prime minister has indicated she would have blocked Kraft’s takeover of Cadbury in 2010 and Pfizer’s failed attempt to buy pharmaceuticals group AstraZeneca. | The government is planning to publish draft proposals in the coming weeks that would outline how it would respond to foreign takeovers and bids for key infrastructure projects in the future. Theresa May has previously said the government should have more powers to block predatory bids for companies in important industries for the economy. The prime minister has indicated she would have blocked Kraft’s takeover of Cadbury in 2010 and Pfizer’s failed attempt to buy pharmaceuticals group AstraZeneca. |
| Greg Clark, the business secretary, said last month: “We have taken the opportunity to look at our arrangements to make sure they are kept up to date. We have said we would do that in the context of mergers, particularly if it relates to critical infrastructure, as outlined by the Hinkley Point C decision [to build a new nuclear power station with funding from China]. So we will be setting out some proposals in the weeks ahead.” | Greg Clark, the business secretary, said last month: “We have taken the opportunity to look at our arrangements to make sure they are kept up to date. We have said we would do that in the context of mergers, particularly if it relates to critical infrastructure, as outlined by the Hinkley Point C decision [to build a new nuclear power station with funding from China]. So we will be setting out some proposals in the weeks ahead.” |
| At present the government can only block takeovers on the basis of national security, financial stability and media plurality. | At present the government can only block takeovers on the basis of national security, financial stability and media plurality. |
| Existing takeover rules also mean Kraft Heinz is blocked from making another bid for Unilever for six months after scrapping its initial attempt. Nonetheless, Unilever has taken steps to protect itself from another takeover attempt by pledging to conduct a “comprehensive review of options” to improve value for shareholders. | Existing takeover rules also mean Kraft Heinz is blocked from making another bid for Unilever for six months after scrapping its initial attempt. Nonetheless, Unilever has taken steps to protect itself from another takeover attempt by pledging to conduct a “comprehensive review of options” to improve value for shareholders. |
| After Kraft Heinz announced it was walking away from the potential deal, Unilever said in a statement: “The events of the last week have highlighted the need to capture more quickly the value we see in Unilever. We expect the review to be completed by early April, after which we will communicate further.” | After Kraft Heinz announced it was walking away from the potential deal, Unilever said in a statement: “The events of the last week have highlighted the need to capture more quickly the value we see in Unilever. We expect the review to be completed by early April, after which we will communicate further.” |
| Unilever employs 7,500 people in the UK, including at its London headquarters and its research and development hub in Port Sunlight, Merseyside. | Unilever employs 7,500 people in the UK, including at its London headquarters and its research and development hub in Port Sunlight, Merseyside. |
| The company, whose shares are listed in the UK and the Netherlands, is one of the biggest consumer goods groups in the world. Its brands range from foods such as Flora, Ben & Jerry’s and Knorr, to Doveskincare and Lynx deodorant, to cleaning products such as Domestos and Persil. | The company, whose shares are listed in the UK and the Netherlands, is one of the biggest consumer goods groups in the world. Its brands range from foods such as Flora, Ben & Jerry’s and Knorr, to Doveskincare and Lynx deodorant, to cleaning products such as Domestos and Persil. |
| Unilever’s origins date back to 1885 when William and James Lever created Sunlight, the world’s first branded and packaged soap for washing clothes. Unilever was formed in 1929 when Lever Brothers merged with Dutch company Margarine Unie. | Unilever’s origins date back to 1885 when William and James Lever created Sunlight, the world’s first branded and packaged soap for washing clothes. Unilever was formed in 1929 when Lever Brothers merged with Dutch company Margarine Unie. |
| Polman became chief executive of Unilever in 2009. He was previously the finance director at Nestlé and spent more than 20 years at Procter & Gamble, the maker of Fairy washing-up liquid and Gillette, the shaving brand. | Polman became chief executive of Unilever in 2009. He was previously the finance director at Nestlé and spent more than 20 years at Procter & Gamble, the maker of Fairy washing-up liquid and Gillette, the shaving brand. |