The survey canvassed the opinions of 93 financial and business editors and senior reporters from 10 countries across the globe from publications such as The Financial Times, Bloomberg, Dow Jones, Reuters, Handelsblatt, Corriere Della Sera, breakingviews.com and L’Agefi Hebdo.
The survey focused on the issue of economic patriotism and the quality of companies’ communication. In the last two years, several governments have intervened to prevent takeovers of listed companies by foreign companies. The aim of the GFC/Net survey was to highlight national attitudes to this international phenomenon.
Strong national attitudes; Defense of strategic sectors cited as adequate justification
The survey revealed strong national attitudes, with Italian, German and Portuguese respondents most likely to consider economic patriotism a key issue. Opinions are divided in France, where as many journalists believe economic patriotism will intensify as those agreeing that it is of little concern.
None of those polled believed economic patriotism is always justified, while nearly half cited it reasonable in the defence of strategic sectors. Overall, the survey revealed reluctant attitudes towards the acquisitions of defence companies, electrical or gas utilities by foreign companies; those linked to national security and sovereignty. International and dematerialized sectors such as banking and stock exchanges were deemed most acceptable for acquisition.
The loss of jobs is the main concern when a foreign company buys national assets (this was true in six out of ten countries); followed by the loss of corporate headquarters. National security was considered vital in Germany and the U.S., but of almost no importance in Portugal and in the Netherlands.
For most journalists, trade buyers appear as the most acceptable acquirers, since they meet a strategic goal within companies’ business development. On the other hand, hedge funds and activist investment groups are perceived as the least acceptable, with asset managers straddling the middle ground.
Geographical and cultural proximities play a key role
Countries that are geographically and culturally close would benefit from a greater acceptance in any merger or acquisition activity according to journalists. France favours Germany and Spain; the U.S. favours the UK and Australia. The UK is the most acceptable country for seven countries out of 10. On the contrary, emerging countries seem to raise some fears in Western countries: Russia, China, Gulf States and India generate great skepticism.
CEOs, politicians and regulators are the most influential and supportive in foreign acquisitions
According to the journalists, CEOs have the greatest influence in allowing foreign acquisitions, just ahead of politicians. While CEOs generally support these acquisitions, the latter are rather reluctant. In nine countries out of 10, consumers groups and NGOs are seen as the least supportive of foreign acquisitions, in addition to trade unions.
“Economic nationalism has rarely been out of the news over the last year, from the Dubai Ports to countless M&A situations in Europe and beyond,” said Martin Mosbacher, Chairman, Intermarket Communications and a founder of GFCNet. “Some describe it as ‘the inevitable corollary to globalization.’ While growing pains are apparent, it is clear that globalization is happening at an accelerated pace. Companies and regions that most resist it appear to be struggling with the effects of growing isolation. The GFCNet survey clearly points out misunderstandings tied to areas such as private equity or hedge funds and also for regions such as Russia and Middle Eastern countries.”
Improving companies’ communication
Alongside with the economic patriotism issue, the survey focused on the quality of companies’ communication.
The media barometer reveals a gap between non-listed financial services businesses and listed companies. According to the journalists interviewed, listed companies have a rather “good” communication, whereas non-listed financial services companies only communicate in a “satisfactory” way.
The journalists mainly identify three areas for improvement of companies’ communication: 1) access to top management through informal meetings; 2) formal events and interviews, and 3) transparency.
Journalists believe that firms need to more actively take the lead on the topics that involve them. Journalists also made it clear that they prefer qualitative relationships and more substantive content to an increasing flow of unusable, marketing-focused information.
