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Cadbury’s Law Could Hamper, Not Help, UK Companies

I have read about the so-called ‘Cadbury’s Law’ with interest over recent days.  When firmly British company Cadbury’s was taken over by the American company Kraft, bad feelings were clearly running high – and not just among the workers who have jobs there.

We tend to assume that companies which are set up in the UK are British and should always remain that way.  But the takeover by Kraft has proven that once a business becomes successful there is no reason why another foreign company cannot come in and take it over.

At first glance I thought perhaps the Labour Party was doing something good by coming up with a law to prevent this happening.  But upon further inspection it would appear to be more of a knee jerk reaction than anything else.  The pledge appears in the Labour Party manifesto, and given the negative reaction from many parties it could prove to be an own goal by the party as they strive to win another election.

Financial experts have stated that British industry could be damaged by such a move.  A majority is currently  necessary if a takeover is to be approved.  Under Labour plans two thirds of a company’s shareholders would have to say yes before a takeover could occur.

I think this proposal could be a misjudged move by Labour.  They have clearly recognised the depth of feeling surrounding this very British brand, but they seem to have gone too far in trying to protect British companies with this proposed law.

The election will be decided on the 6th May.  Until then if you have any concerns about the status of your own UK company, you can contact us here at StMatthew for advice about your situation.


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