ICI: Hanson Shareholding (Hansard, 21 May 1991)

Viscount Astor
My Lords, the current position is that Hanson has acquired 2.82 per cent. of ICI's shareholding. There is no takeover proposal.

§ Lord Williams of Elvel
My Lords, I am grateful to the noble Viscount for his Answer. Is he not aware that ICI has now, in the City expression, been "put in play"? That means that it considers itself vulnerable to a takeover. Is the Minister further aware that that involves a serious diversion of time for ICI 108 management? Is the noble Viscount further aware that ICI is one of the major flagship companies of the United Kingdom, and that it should certainly not be allowed to be taken over, particularly by a company which has the cavalier spirit of an asset-stripping conglomerate?

Viscount Astor
My Lords, the noble Lord, Lord Williams, is speculating. I understand that Hanson has stated that its current stake is for investment purposes. There is no takeover.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that most people who work in this field feel that the minute they see the Government beginning to interfere by blocking a proposal of the normal working of the free enterprise system, we are all in some kind of trouble?

Viscount Astor
My Lords, we are not interfering because there is no takeover proposal.

§ Lord Donoughue
My Lords, is the Minister aware that the Hanson company has one of the worst records in British industry for research and development investment, and that it is significantly worse than ICI? Is he also aware that Hanson maintains its profitability to a considerable extent by running down R&D in the companies that it takes over by disposals and making people unemployed? Does the Minister agree that it is wholly undesirable that the heartland of British manufacturing should be exposed to the plunder of such a predator?

Viscount Astor
My Lords, I can only repeat that I do not believe that to be the case. As regards the noble Lord's point about R&D, it is important for any company to remain competitive in the markets in which it operates if it is to remain in business. That is particularly so for those companies at the leading edge of technology if they are to remain competitive with industries in other countries.

The Earl of Halsbury
My Lords, in addressing your Lordships on this Question, I declare an interest. I am a contented shareholder of ICI. I have had a happy ex-partnership with BP, and I had a grateful employee relationship with Lever Brothers. They are three of our giant companies representing the very best of British enterprise. Is it right that they should be at the mercy of an asset stripper? I feel very deeply about this matter.

Viscount Astor
My Lords, as I have said, I do not believe that to be the case. As the noble Earl is aware, if anything happens, then he as a shareholder will have the right to exercise his vote in affecting the future of the company.

§ Lord Orr-Ewing
My Lords, can my noble friend give some indication on whether it is in order to ask any question in the City about any company concerning another company when there is not a merger in sight? If that is allowed, then any merger, demerger, management buy-out, or anything, can be put on the Order Paper. Where is the ministerial responsibility when there is no merger being made, suggested, or in sight?

Viscount Astor
My Lords, my noble friend makes an important point. We are beginning to speculate on speculation.

§ Lord Dormand of Easington
My Lords, is the Minister aware that, in addition to the points made by my noble friend, ICI has an export record second to none, which is over 50 per cent. of its manufactures? Is the Minister also aware of the very long-standing and great commitment which ICI has to places like the North East of England? For many years ICI has provided solid employment prospects and everything that goes with them. As this Government pretend to have some interest in regional policies, is that not a matter in itself—apart from other things—on which the Government should be keeping a very close eye?

Viscount Astor
My Lords, the chemical industry contributes £ 13 billion to UK export as well as all major industrial sectors in this country. It is important that the industry remains competitive and able to compete in the European and worldwide markets.

§ Lord Peston
My Lords, the noble Lord the Leader of the House said that one should not believe everything one reads in the newspapers. I have to say that all I know about the subject is what I have read in the newspapers. My question to the Minister is this: if there is nothing to fear on the part of ICI, is it the Government's advice to the management of ICI that it pays no attention whatever to this rumour and that it need invest no resources in defending the company against a takeover; everything is perfectly okay and that there is nothing at all to worry about? Is that the message that the Government Front Bench are sending to ICI?

Viscount Astor
My Lords, it is up to the board and management of ICI to run the company—not the Government.

§ Lord Ezra
My Lords, while the noble Viscount has made it very clear that no bid has as yet been made for ICI, nevertheless I ask him whether he accepts that there has been great public anxiety? Therefore, is it not proper that we should raise the matter in this House? If there were to be a bid for such a leading company in a key position in Britain and contributing so much to our overseas trade, what then would be the Government's attitude? Would the Government consider that to be a matter for public policy and refer it to other bodies for consideration?

Viscount Astor
My Lords, should there be a bid by any large company such as the ones we are discussing, or any of the companies in this country, it would be likely to be considered by the European Commission under the European Community merger control regulation which deals with large mergers with cross-border dimensions. However, no merger situation has yet arisen. Should any bid be announced the proposal would have to be notified to the EC Commission within one week of the announcement.

§ Lord Wade of Chorlton
My Lords, is my noble friend aware that Hanson has made only a relatively small investment in ICI? It is clearly the intention to 110 improve the performance of that company for the benefit of all the shareholders. In fact, one would have to accept, would one not, that the shareholders of Hanson have done somewhat better over recent years than have ICI shareholders?

Viscount Astor
My Lords, my noble friend makes an important point. I am sure that noble Lords who are shareholders of ICI will take note of what he said.

The Earl of Halsbury
My Lords, as one who is apprehensive that this conglomerate may be gathered to its ancestors, who will succeed to the management of the conglomerate? It will be a totally false situation.

Viscount Astor
My Lords, I do not believe that is a question for me to answer.

§ Lord Rochester
My Lords, as someone who had the good fortune to be employed by ICI for nearly 30 years and throughout that time was concerned with the management of people, can the noble Viscount give us any assurance that, should a full takeover bid be made and before any conclusion is reached, account will be taken of the views of the employees of that great company; some 130,000 of them?

Viscount Astor
My Lords, that is a matter for the shareholders of ICI. It is they who will be deciding whether or not to accept a bid.

§ Lord Tordoff
My Lords, is the noble Viscount saying that it is only the shareholders whose views are to be taken into consideration? Are more than 100,000 employees of no consequence at all?

Viscount Astor
My Lords, I did not say that they are of no consequence. The fact is that the shareholders have the vote in such situations. Indeed, many employees of large companies are shareholders themselves.

§ Lord Marsh
My Lords, can the Minister or the Government, for the benefit of the House and so that we can make an informed judgment, seek to produce some sort of comparison between the relative track records in commercial judgment of Hanson and successive Governments in this country over a period of years?

Viscount Astor
My Lords, it is not up to me to make those judgments.

§ Lord Williams of Elvel
My Lords, is the noble Viscount really saying that the Government are adopting a neutral attitude to this possibility and that it is up to the shareholders to decide what they want to do with their company? Have the Government no regard for the long-term interests of the industrial nation?

Viscount Astor
My Lords, I make two points. The first is that we cannot speculate on speculation. What I have said, and repeat, is that it is highly likely that should any bid be launched for a company of this size it would be considered by the European Commission under the European Community merger control regulations.