MERGER MOST FOUL
THE Queen's Speech proposes a new Companies Bill 'to improve merger con- trol'. But the minor tinkering with margins that the Queen went on to describe will do nothing to eradicate the general confusion surrounding the Government's merger policy. Lord Young is clearly so aware of the inconsistency of the Government's approach that he went to the trouble a few weeks ago of telling the Stock Exchange how consistent the Government and the Office of Fair Trading have been in their treatment of proposed mergers. It must have been rather embarrassing when only days later the OFT referred a bid to Lord Young — that of Elders for Scottish &
Newcastle Breweries — which fell into none of the categories Lord Young had described. Elders, of course, is a foreign company and will need little persuading that this was the main, if unspoken, reason for its being subjected to scrutiny by quango. Why was it that of the three proposed highly-leveraged bids for British companies over the past two years, only that proposed by another British company, Barker and Dobson, was not referred to the Monopolies and Mergers Commission? And there can be few people other than Lord Young who believe that the decision to force the Kuwait Investment Office to halve its stake in British Petroleum was not an exercise in face-saving for BP and the British Government, rather than a demon- stration of coherent policy. We have, it is true, come a long way from the awful time when Lord Cockfield, that great believer in the free flow of capital across national boundaries, blocked a US bid for Sothe- by's, when that company was ingenious enough to use Buckingham Palace in its lobbying of the then Trade and Industry secretary. When Lord Young had the courage not to block the Nestle bid for Rowntree he was criticised for acting like an international boy scout. But look what has happened. Last week Nestle announ- ced it was changing its 30-year-old policy of preventing foreigners from buying its vot- ing shares. Other Swiss companies are expected to follow. Free trade is infectious. But so, Lord Young, is protectionism.
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