Nostalgia counts for nothing if sums add up

Mar 10 2010 By Andrew Hebden, The Journal

THE hugely controversial takeover of Cadbury by American food conglomerate Kraft earlier this year gave foreign takeovers a bad name.

The fight to keep Cadbury in British ownership has some merits of course; it is one of those iconic brands which feels quintessentially British and the thought of the maker of some hideous cheese products getting hold of it fills us with a sense of dread.

At the end of the day, however, nostalgia counts for nothing as long as the sums add up and Britain cannot be in the business of blocking takeover bids from foreign firms, however unseemly they may be.

If one was to argue that tougher controls should be placed on would-be suitors, then a better example of the unpalatable consequences of foreign ownership is being played out on Teesside where there is an understandable feeling that Corus’s Indian owners lack empathy with the management team on the ground in Redcar.

So how should we greet the arrival of two significant foreign takeovers in the North East over the course of the last week or so? Certainly not with the sense of foreboding that often comes with these purchases, it would seem.

The purchase of South Shields family clothing business Visage by Hong Kong-based Li & Fung for £173m represented one of the biggest deals in the North East in recent memory. It is a terrific story for the family who founded the firm in 1981 especially as the new owner wants to use the business as a platform for its own growth in Europe.

It is a similar story at Robson Brown, the Newcastle advertising and marketing agency bought by Los Angeles firm Round2 last Friday. This week the group’s chairman Garfield Ricketts paid a visit to the North East to reveal the extent of his ambitious expansion plans for the business.

In both cases, there is a certain sadness that the longstanding owners of these businesses have either moved on or will no longer retain autonomy over the firm’s futures.

But, as well as being a huge vote of confidence in the North East at a testing time for the local economy, these deals also seem set to expand the horizons of these two businesses and make future growth look even more exciting.

:: Andrew Hebden is head of business at The Journal