Public Services International Research Unit
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Activity 4. 3: Takeovers and mergers





FOCUS

To consider how takeovers affect employees and trade unions

To consider possible tactics for responding to those implications

TASKS:

What are the dangers eg job losses, and possibilities eg improved trade union status of takeovers by multinationals? Why did UK unions support takeover bids of water companies by French multinationals but oppose energy takeovers by USA companies?

Divide into groups and do one or more of the following exercises

  1. You are trade union reps in a local utility owned by the municipality. A foreign multinational has made a takeover bid, and the authority wants to sell. What do you do?
  2. You are trade union reps in a privately-owned utility. A foreign multinational has made a takeover bid, and the shareholders seem undecided. What do you do?
  3. You are trade union reps in a state-owned utility. A foreign multinational has proposed a merger with one division of your company, to form a 50-50 joint venture. What do you do?
  4. You are national officers of an energy trade union. The government has decided to sell the state energy company to the highest bidder, and has short-listed four multinationals. Your union has invited all four companies to a meeting. What questions will you ask? How can you use the meeting to influence the policies of the companies or of the government?

In each case you should discuss the possible effects of the takeover: eg loss of jobs, change in industrial relations policies. You should also discuss the reaction of other groups eg shareholders, government, and consider whether the trade union view has to be the same. Finally, you should consider what you might do to influence the outcome for the benefit of your members.

RESOURCES:

TIME

2 hours

Notes for tutors

The exercise should bring out that trade unions may take a different view from the 'nationalist' or 'shareholder' perspective. There are tactical possibilities especially with public sector sales eg insisting on a 'beauty competition' from a number of multinationals, with the trade unions being one of the judges, so they compete to impress the unions.