The true cost of the 'great British takeaway'

The UK once acquired overseas firms with 'an adventurous swagger ', but these days the boot is firmly on the other foot. British firms worth a total of £138bn have been taken over by foreign buyers so far this year. Why is there so little resistance?

UK plc once acquired overseas firms "with an adventurous swagger", say Dan Roberts and Iain Dey in The Sunday Telegraph. But these days, the boot is on the other foot. This year, 720 British firms worth a total of £138bn have been taken over by foreign buyers and another £26bn worth, including Corus (click here to download a free company report), Scottish Power (click here to download a free company report) and the London Stock Exchange (click here to download a free company report), are in play. Foreign companies spent £500bn (around half our national output) on UK firms over the past three years, compared to a flow of just £200bn the other way.

It's partly about the rise of corporate governance, Brian Magnus of Morgan Stanley told Conal Walsh in The Observer. "Great risk-takers", such as Christopher Gent, "don't really exist today because the Government has put them out of business". Firms are less adventurous, thanks to the bursting of the tech bubble and the ownership structures of UK firms, note Roberts and Dey. Institutional investors tend to dominate here, while in Europe large family holdings are more common. So once a deal is decided on, there is scant opposition. A favourable tax regime for foreign buyers both here and overseas also plays a part, while another key factor is protectionism abroad. Spain, Italy and France have all resisted purchases of their major firms, with France recently proclaiming yoghurt-maker Danone to be a national champion of strategic' significance.

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