HC Deb 24 May 1988 vol 134 c110W
Mr. Shersby

To ask the Chancellor of the Duchy of Lancaster if he will make it his policy to ensure that there is full reciprocity in connection with bids for British companies from companies located overseas which protect themselves by devices such as the weighting of voting rights in order to enable minority shareholders to retain control; if he will investigate the wide variety of such obstacles permitted in the state of Delaware in the United States of America; and if he will make a statement.

Mr. Maude

It is the responsibility of the Director General of Fair Trading to consider all aspects of a proposed merger when preparing his advice to the Secretary of State on the question of reference to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973. With regard to inward investment, one consideration that may be relevant in some cases is the extent to which United Kingdom companies have reciprocal freedom to acquire companies based in the home country of the prospective acquirer.

I am aware of Delaware state takeover law.

Mr. Shersby

To ask the Chancellor of the Duchy of Lancaster what consideration he has given to the economic and social implications of business decisions affecting the future of British companies, their shareholders and employees, being transferred to centres offshore and outside the European Community; and if he will make a statement.

Mr. Maude

As stated in the DTI Blue Paper on mergers policy, issued March 1988, the Government's general attitude towards inward investment is to welcome it, whether it be by acquisition or by direct inward investment.

Nevertheless, there are instances in which foreign ownership of the United Kingdom company may raise particular concerns, and in such cases the power to make a reference if the proposed merger to the Monopolies and Mergers Commission is available. Each case is considered individually on its merits in accordance with the provisions of the Fair Trading Act 1973.

The main consideration in deciding whether to make a reference to the MMC is the effect on competition but other relevant aspects of a case are also taken into account, including wider public interest issues.