Banking, finance, and taxes
Should TARP Recipients Fund Foreign Business Takeovers Of US Firms?
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The Royal Bank of Scotland (NYSE:RBS) has had Cadbury as a corporate client for decades. The financial firm agreed to help fund Kraft’s (NYSE:KFT) potential buyout of Cadbury. RBS’s ownership is controlled by the UK government. A number politicians have raised the issue of why a bank which the British taxpayers own in large part is supporting a hostile takeover that may cost local workers their jobs.
According to the Guardian, “Trade union Unite, which represents Cadbury workers, has also expressed concern about the bank’s role in the possible takeover, particularly since Kraft has so far failed to give firm commitments on job losses or plant closures.”
So, what happens if the day comes when Bank of America (NYSE:BAC) or Citigroup (NYSE:C), where the US government has huge ownership stakes, gives financial support to a bid by a China or EU- or UK-based company to buy a firm in America in which the consolidation may cause job cuts? Members of Congress will object. How far that will get them is anyone’s guess.
Douglas A. McIntyre
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