GO
Loading...

UK to demand job assurances in foreign takeovers

UK Business Secretary Vince Cable
Matthew Lloyd | Getty Images
UK Business Secretary Vince Cable

Britain is to set out proposals to force foreign buyers of key UK companies to make binding commitments to secure jobs and research budgets, Sky News reported on Saturday.

Business Secretary Vince Cable is expected to announce the plans shortly to prevent the erosion of Britain's knowledge base, it added.

Read More Why are so many M&A deals being pulled?

Sky said it understood Cable wants to strengthen the powers of the Takeover Panel, which oversees mergers and takeovers involving British companies.

The panel can force foreign bidders in any sector to make or clarify public statements about their intentions but ministers have said it does not have sufficient powers to compel them to make legally binding commitments on jobs and research.

No immediate confirmation was available from Cable's department.

Read More Let's make a deal: Food companies ripe for the picking

The jobs issue became politically sensitive under the last Labour government when America's Kraft foods reneged on a pledge to retain a Cadbury manufacturing facility in Britain.

It arose again two months ago when U.S. pharmaceuticals giant Pfizer tried to take over Britain's AstraZeneca.

Read MorePrivate equity M&A: Still a risky game

Currently, a formal public interest test which gives politicians the power to intervene in corporate deals only applies to areas such as media plurality and financial stability.

Follow us on Twitter: @CNBCWorld

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Europe Video

  • Steve Pollard of Marex Spectron says coffee shipments from Brazil have been higher than expected, due to previous years' surpluses.

  • Every time the oil price looks positive or stable "out comes something negative," says Richard Mallinson, analyst at Energy Aspects.

  • Russia has been dominating the news recently and its economy is not looking good. Anastasia Nesvetailova, director at City University's political economy research centre explains more.