Bidder's block

Cadbury: Blame economic malaise or a looming election, but the British seem unusually put out to see another national icon fall into foreign hands. Even if the UK’s open market for corporate control is not formally closed up, the backlash against Kraft Food’s takeover of Cadbury may make future predators think twice.

Until now, almost all British companies have been fair game for overseas buyers. From glassmaking to electricity distribution, banks to nuclear power, the door has been left wide open. It was one way in which the UK system was not very European.

On the continent, governments have found subtle or crude ways to keep foreigners from gaining control of companies they deemed important.

Even highly regulated industries were fair game, although Spain’s Ferrovial, which bought airports operator BAA, probably suffered from not fully understanding the British way. The free British market for corporate control propelled the UK to second place, behind the United States, in the list of countries with the highest value of foreign takeovers over the last decade.

For two of those years, British firms were in the lead, according to Thomson Reuters data.

But recession has changed the landscape. The hostile bid from a US company for Cadbury hit a raw nerve. The prospect of job cuts — and of an iconic British brand becoming just another marketing tool for a super-sized multinational — generated loud protests from British unions, public, newspapers and politicians.

The government made vaguely menacing noises.

European Union rules allow cross-borders to be blocked only when there are threats to national security or competitive markets. But governments of both left and right have long treated these rules as opportunities for creative interpretation. France once suggested that food producer Danone was a “strategic” asset when US food group PepsiCo was on the prowl.

For a generation, most of the UK establishment politicians accepted that the open-door policy is right.

It looks like the Cadbury takeover may restart the debate. The election offers an opportunity for both parties to make clear where they stand. Foreign companies eyeing British targets might want to wait until the path is clearer.