Vive la difference! How France and UK tackle M&A

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Vive la difference!

Can there be a clearer illustration of the chasm between French and British attitudes to business than this week's merger and acquisitions headlines? Once again the French are erecting the barricades in Paris to repel an Anglo-Saxon corporate takeover while there is a deafening silence in Westminster about a jewel in British pharma potentially being gobbled up in a $100 billion deal.

To recap, it appears that Hollande's Government is resurrecting its long term industrial policy in order potentially to thwart GE's bid $13 billion bid for certain power assets at its industrial champion Alstom, even turning to the Germans to prevent Jeff Immelt's plans for a tie-up. Funny that the French should see Siemens as a white knight given that CEO Joe Kaeser has been scything jobs since he took over last year in order to turn around the German behemoth.

At the same time, US pharma giant Pfizer is back in the bidding for AstraZeneca for the second time this year in a deal that could see another massive chunk of corporate UK fall into foreign hands.

Now it's easy to take the line that the French are once again putting their finger in the dam which prevents the globalization onslaught while the British are right to allow free trade and the healthy cross-border trade. After all, it's Britain's open attitude to markets and trade that has got us back on track, right? And it's the French attitude to the irrational protection of jobs that has left them in the economic mire?

Maybe, maybe not but deep down I can't help admire a nation that fights tooth and nail for its companies, its jobs and its identity. Go on admit it, it hits a jingoistic nerve every time a British company is the one doing the buying rather than being the prey. You only have to look at the Kraft-Cadbury deal to see what a sulk we go into every time one of our big companies gets gobbled up.

Actually, we all know of course that the polarized government attitude to big business cross-border deals in the UK and France have little input into the ultimate success of their companies. It's a little more obvious why the UK is doing pretty well relatively at the moment. According to Bernard Charles, the immensely successful CEO of French company Dassault Systemes, it comes down to labor flexibility and tax. Even Hollande should be able to work out that: if over in France, companies are paying 38 percent tax while less than 21 miles away, companies can get away with a headline rate of 21 percent, then something has got to give.

Of course, most employees of AstraZeneca I'll bet couldn't give a jot whether they're working for a company based in New York or London, especially given the fact that actually only about half of them even work in Britain. And as for Alstom, the truth is that less than 20 percent of its employees even work in France. Nice then that the French Government is protecting such a French institution.

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