Tuesday, July 15, 2014
Kraft's 2012 acquisition of Cadbury is still haunting the UK. At the time Kraft promised to maintain Cadbury's Somerdale plant in the UK as part of the deal. After the deal closed, however, Kraft had an epiphany and closed the Somerdale facility. That left many in the UK with sour feelings - not only for the US candymaker. but for foreign acquirers generally.
The recent inversion trend, with UK companies as obvious targets, ahem...sorry...acquirers, has some UK regulators nervous. They are now looking to tighten up pre-transaction promises and removing the "wiggleroom" according to teh UK's Business Secretary:
“We need a last-resort power, such that if there is something very clearly against the national interest – and the loss of our research and development in pharmaceuticals is a very good example – the government can in those circumstances intervene.”
So, it seems that not only might the recent inversion trend cause some regulatory response in the US, but it might trigger another round of it in the UK as well.