Takeovers and Mergers

I was struck by the political row which has developed over the possible takeover of UK drug firm AstraZeneca by its American rival Pfizer which surfaced the other day at PMQs (Prime Minister's Questions) in the House of Commons.

Now the Labour leader, Ed Miliband, seems to be in favour of intervening in just about every  area of the economy these days, but I though that the Prime Minister, David Cameron, had the measure of him when he replied that the Coalition Government was following the exact process laid down by the last Labour Government.

Worse was to follow as Cameron claimed that the current 'rules' were drawn up by none other than Ed Miliband himself, apparently, when Ed was a Labour Government Minister, as part of Gordon Brown's Treasury team.

Now that had the ring of truth to me and suggested that on this point at least Labour are in danger of making fools of themselves on the opposition benches as Ed Miliband and others demand copper bottomed assurances that any takeover of AstraZeneca won't result in a loss of jobs somewhere down the line.

Which seems like a ridiculous position to hold, if you ask me.

Because when COHSE, NALGO and NUPE merged to form Unison in 1993 - the new trade unions made no bones about the fact that economies of scale would lead to a significant reduction in costs and the number of people that Unison employed, compared to its predecessor unions.

So even in the trade union movement it is accepted that a key purpose of a takeover or merger is to reduce duplication and develop more efficient (i.e. less costly) ways of working with the aim of delivering a better service to customers (members) going forward.

The impression being given by Labour in opposition is that they would be much tougher on prospective inward investors, yet the evidence shows that when he was a Minister in the last Labour Government, Ed Miliband did exactly the opposite by relaxing rather than strengthening the existing 'rules'.

Meanwhile a senior Labour MP, Austin Mitchell, has lost the plot altogether by using Twitter to describe the American company as 'rapists' which seems like a completely inappropriate use of language, if you ask me. Mitchell tweeted the following comment to his followers: 

"Cameron dare not stop Pfizer because he dare not offend the US in any way. Roll up rapists."

Thank God this old duffer is retiring at the next election because there's something wrong with him if he thinks that the word 'rapists' is fair game - just so he can draw attention to himself.