{"id":83955,"date":"2025-07-15T06:48:33","date_gmt":"2025-07-15T05:48:33","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=83955"},"modified":"2025-07-15T06:48:33","modified_gmt":"2025-07-15T05:48:33","slug":"selling-england-by-the-pound-2","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/07\/15\/selling-england-by-the-pound-2\/","title":{"rendered":"Selling England by the pound"},"content":{"rendered":"

Two familiar commentators on this blog, Mike Parr and the person known as Colonel Smithers, spent some of the weekend discussing a Substack<\/a> by someone called Brian McDonald this weekend. As he noted:<\/p>\n

There was a time when London didn\u2019t just walk tall \u2014 it strutted with the unapologetic arrogance of a city that knew it didn\u2019t need to explain itself. A generation ago, it carried the air of a capital of consequence. The money moved like floodwater, the energy was all swagger and edge, and the mood suggested history was always unfolding just out of sight \u2014 in a club basement off Soho, or in the whiskey fumes of a Commons bar.<\/p><\/blockquote>\n

As he then added:<\/p>\n

Now the show\u2019s still on, but the theatre\u2019s crumbling. I was back recently, and what startled me wasn\u2019t the decline \u2014 decline is rarely news in modern Britain \u2014 but how everyone seemed to wear it like an old coat. London today feels like The Rolling Stones: still charging premium prices, still belting out the old hits, but slower on its feet and haunted in the eyes. It used to be a low-rise Manhattan. Now it\u2019s mid-tier America with delusions of grandeur.<\/p><\/blockquote>\n

And then he added:<\/p>\n

This isn\u2019t just the muttering of the disenchanted. The National Institute of Economic and Social Research, not exactly a den of dramatisers, has put it plain: by the cold arithmetic of living standards and salaries,\u00a0Britain can no longer count itself a rich country.<\/a>\u00a0Productivity has flatlined like a punch-drunk boxer hanging on the ropes.\u00a0Since 2007, real wages have scraped a meagre 2.2% gain.<\/a>\u00a0In the preceding seventeen years, they rose by 42%. Now the average British worker earns \u00a34,000 a year less than if the country had merely kept pace with the Americans. That\u2019s not a hiccup \u2014 it\u2019s a quiet collapse.<\/p><\/blockquote>\n

From this, he concluded (with a lot of narrative discussion in between):<\/p>\n

What stings most is the knowledge that none of this was inevitable. Britain had the tools: the language of commerce, institutions that once inspired envy, cities steeped in the grandeur of empire and the energy of reinvention. But inheritance, like reputation, decays without care. Cultural capital must be spent wisely or not at all. And pride, if it is not matched by upkeep, turns quickly into nostalgia \u2014 the last refuge of countries that used to matter.<\/p>\n

Reversal will take more than slogans and borrowed optimism. It will demand something rare in Britain now \u2014 candour about what\u2019s broken, and the courage to face who broke it. Without that, decline won\u2019t just be a chapter. It will be the whole story.<\/p><\/blockquote>\n

So, we asked, \"What happened?\" Mike did most of the work to provide an answer: we wanted to keep the. money flowing, so we sold the family silver to make it happen. The analysis he created, he admits, with the assistance of an hour refining his AI request, is as follows:<\/p>\n

\n

Decade-by-decade snapshot of some of the most economically or culturally significant<\/em> UK-headquartered firms that have passed into foreign ownership since 1980. The table is not exhaustive, but it pulls together the landmark deals most frequently cited by academics, policymakers and the financial press when discussing the UK\u2019s open-door, neoliberal stance on corporate takeovers.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Decade<\/strong><\/td>\nUK company (sector)<\/strong><\/td>\nForeign acquirer (country)<\/strong><\/td>\nDeal year<\/strong><\/td>\nDeal value \/ strategic note<\/strong><\/td>\n<\/tr>\n<\/thead>\n
1980s<\/td>\nRowntree-Mackintosh<\/strong> (confectionery)<\/td>\nNestl\u00e9 (CH)<\/td>\n1988<\/td>\n\u00a32.5 bn \u2014 then the biggest hostile bid in UK history Wikipedia<\/a><\/td>\n<\/tr>\n
<\/td>\nPlessey<\/strong> (electronics\/defence)<\/td>\nGEC-Siemens JV (UK\/DE)<\/td>\n1989<\/td>\n\u00a31.7 bn split-up; first test of post-Big-Bang takeover rules<\/td>\n<\/tr>\n
1990s<\/td>\nAsda<\/strong> (retail)<\/td>\nWalmart (US)<\/td>\n1999<\/td>\n\u00a36.7 bn \u2014 marked US big-box entry into UK grocery Wikipedia<\/a><\/td>\n<\/tr>\n
<\/td>\nBlue Circle Industries<\/strong> (cement)<\/td>\nLafarge (FR)<\/td>\n2001*<\/td>\n\u00a33.1 bn; EU\u2019s largest cement maker created<\/td>\n<\/tr>\n
<\/td>\nBritish Airports Authority (BAA)<\/strong><\/td>\nFerrovial consortium (ES)<\/td>\n2006*<\/td>\n\u00a310 bn incl. debt; London airports governance flash-point<\/td>\n<\/tr>\n
<\/td>\nScottish Power<\/strong><\/td>\nIberdrola (Spain)<\/td>\n1997<\/td>\n?<\/td>\n<\/tr>\n
2000s<\/td>\nPilkington<\/strong> (glass)<\/td>\nNippon Sheet Glass (JP)<\/td>\n2006<\/td>\n\u00a32.2 bn; FTSE stalwart leaves LSE Wikipedia<\/a><\/td>\n<\/tr>\n
<\/td>\nHanson<\/strong> (building materials)<\/td>\nHeidelbergCement (DE)<\/td>\n2007<\/td>\n\u00a38 bn; removed final FTSE-100 \u201caggregates\u201d major<\/td>\n<\/tr>\n
<\/td>\nGallaher Group<\/strong> (tobacco)<\/td>\nJapan Tobacco (JP)<\/td>\n2007<\/td>\n\u00a39 bn; UK\u2019s last big independent tobacco firm<\/td>\n<\/tr>\n
<\/td>\nJaguar & Land Rover<\/strong> (automotive)<\/td>\nTata Motors (IN)<\/td>\n2008<\/td>\n$2.3 bn; icon brands shift to emerging-market owner Wikipedia<\/a><\/td>\n<\/tr>\n
<\/td>\nCadbury<\/strong> (confectionery)<\/td>\nKraft (US) \u2192 Mondelez<\/td>\n2010<\/td>\n\u00a311.5 bn; sparked \u201cCadbury law\u201d debate on takeovers Wikipedia<\/a><\/td>\n<\/tr>\n
2010s<\/td>\nARM Holdings<\/strong> (semiconductors)<\/td>\nSoftBank (JP)<\/td>\n2016<\/td>\n$32 bn \u2014 biggest European tech deal to date Wikipedia<\/a><\/td>\n<\/tr>\n
<\/td>\nNEX Group<\/strong> (inter-dealer broker)<\/td>\nCME Group (US)<\/td>\n2018<\/td>\n$5.5 bn; City trading infrastructure ceded<\/td>\n<\/tr>\n
<\/td>\nCobham<\/strong> (defence)<\/td>\nAdvent Int\u2019l (US PE)<\/td>\n2020<\/td>\n\u00a34 bn; MoD \u201cnational security\u201d scrutiny but approved<\/td>\n<\/tr>\n
<\/td>\nBOC<\/strong> (industrial gases)<\/td>\nLinde (DE)<\/td>\n2006*<\/td>\n\u00a38.2 bn; UK chemicals champion absorbed<\/td>\n<\/tr>\n
2020s<\/td>\nBritish Steel<\/strong> (metals)<\/td>\nJingye (CN)<\/td>\n2020<\/td>\nNominal \u00a350 m + capex; insolvency rescue with geo-political undertones<\/td>\n<\/tr>\n
<\/td>\nUltra Electronics<\/strong> (defence)<\/td>\nAdvent \/ Cobham (US\/UK)<\/td>\n2022<\/td>\n\u00a32.6 bn; sensitive sonar and cryptography assets<\/td>\n<\/tr>\n
<\/td>\nMeggitt<\/strong> (aerospace)<\/td>\nParker-Hannifin (US)<\/td>\n2023<\/td>\n\u00a36.3 bn; approved after jobs undertakings<\/td>\n<\/tr>\n
<\/td>\nAlphawave IP<\/strong> (chips)<\/td>\nQualcomm (US)<\/td>\n2025<\/td>\n\u00a31.8 bn; LSE-listed fab-less designer exits The Guardian<\/a><\/td>\n<\/tr>\n
<\/td>\nDS Smith<\/strong> (packaging)<\/td>\nInternational Paper (US)<\/td>\n2025<\/td>\n\u00a35.8 bn; completed after EU divestiture remedies Reuters<\/a><\/td>\n<\/tr>\n
<\/td>\nBritvic<\/strong> (soft drinks)<\/td>\nCarlsberg (DK)<\/td>\n2025<\/td>\n\u00a33.1 bn agreed; still in UK regulatory review<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Patterns that emerge from 45 years of \u201copen-door\u201d policy<\/strong><\/p>\n

    \n
  1. Sector spread widens over time<\/strong>\n
      \n
    • 1980s\u201390s<\/em>: iconic consumer brands (Rowntree, Asda) and former state assets (BAA, Blue Circle).<\/li>\n
    • 2000s<\/em>: heavy industry and basic materials (Pilkington, Hanson) as global consolidation accelerates.<\/li>\n
    • 2010s\u201320s<\/em>: high-tech (ARM, Alphawave), critical infrastructure (NEX, Ultra) and climate-linked sectors (DS Smith).<\/li>\n<\/ul>\n<\/li>\n
    • Shift from trade buyers to global PE & sovereign capital<\/strong>
      \nThe early period is dominated by strategic corporates (Nestl\u00e9, Lafarge). Post-2000, cash-rich private-equity and sovereign-backed vehicles (SoftBank Vision Fund, Advent) play a far larger role, reflecting abundant global liquidity and UK rules that rarely substitute industrial<\/em> for shareholder<\/em> interest tests.<\/li>\n
    • Sterling depreciation amplifies vulnerability<\/strong>
      \nStep-changes after 1992 ERM exit, 2008 GFC, and 2016 Brexit vote each coincided with spikes in inbound bids as UK assets appeared \u201con sale\u201d in FX-adjusted terms.<\/li>\n
    • Regulatory posture: light-touch but reactive<\/strong>
      \nOnly defence and some telecom assets triggered national-security interventions (e.g., GKN-Melrose 2018, NVIDIA\u2013ARM 2020-22 aborted). Otherwise, the UK\u2019s Competition & Markets Authority focuses narrowly on consumer-price effects, not long-term industrial capacity.<\/li>\n<\/ol>\n

      Econometric angle<\/strong><\/p>\n

      Econometric studies of UK M&A flows (e.g., ONS M&A bulletins and UNCTAD FDI data) typically show:<\/p>\n

        \n
      • Stock of inward FDI<\/strong> rising from <15 % of GDP in 1980 to \u224870 % by 2024, far above G7 peers.<\/li>\n
      • Foreign ownership share of FTSE-100 market cap<\/strong> climbing from ~7 % (1981) to >55 % (2025).<\/li>\n
      • Event-study evidence<\/strong>: announcement-day abnormal returns are positive for target shareholders but long-run performance of the combined entity is mixed, especially where HQ functions and R&D migrate abroad (Cadbury, Cobham cases).<\/li>\n<\/ul>\n

        These patterns are broadly consistent with the thesis that the UK\u2019s neoliberal regime treated market for corporate control as a disciplining device\u2014favouring allocative efficiency and shareholder value\u2014over strategic industrial policy.<\/p>\n

        Point 1: Sectoral Shift \u2014 From Iconic Brands to Strategic Infrastructure and Tech<\/strong><\/p>\n

        1980s\u20131990s: Consumer-facing & post-privatisation targets<\/strong><\/p>\n

          \n
        • Dominated by household-name brands<\/strong> and former state or quasi-public firms<\/strong>.<\/li>\n
        • Typical targets:\n
            \n
          • Rowntree, Cadbury, Asda<\/strong> \u2013 recognisable, stable cash-flow consumer goods and retail.<\/li>\n
          • Plessey, BAA, Blue Circle, BOC<\/strong> \u2013 high fixed-asset base, often originating from UK industrial or defence legacy.<\/li>\n<\/ul>\n<\/li>\n
          • Drivers:\n
              \n
            • Big Bang (1986)<\/strong> liberalisation made UK firms easier to acquire.<\/li>\n
            • Deregulation and Thatcherite privatisations created a pool of exposed, under-defended firms.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

              2000s\u20132010s: Global consolidation in materials, finance, and defence<\/strong><\/p>\n