Nationalism versus capitalism
I usually do not write about politics, my sister already does a pretty good job on her blog (recently referred to in an interview she did as one of the longest running political blogs in Spain). But three seemingly unrelated financial news and political controversy have been hitting the papers this week and I think that what is going on is interesting enough to write about it. And at the end of the day, this is blog is about “A little bit of everything” so politics should also be part of it.
In the US, the news were the acquisition of P&O, a British company that runs major commercial operations at key U.S.ports by Dubai based DP World and the concerns about national security that that deal raised. In Spain, the takeover bid of German based E.ON for Endesa (largest Spanish utility based in Madrid) that tops the early takeover bid by Gas Natural (another large Spanish utility but based in Barcelona) and that became the largest takeover bid in Europe to date. Finally, the rumors of Italian based Enel (again another utility) to acquire French based Suez. All those potential acquisition deals have been received with criticism in the US, Spain and France raising concerns aboutnational security and national protection against foreign interests.
So what those news have in common is that the real debate behind is nationalism versus capitalism. From a capitalist perspective, in this era of globalization, all the three deals make sense and should move forward. For instance, in the Spanish case, Endesa shareholders should take E.ON offer since it is higher and has a large cash component. The Gas Natural offer is not only lower but it is speculative in nature since it has a large component of shares from Gas Natural, a company that is way smaller than Endesa. Interestingly enough, when the first takeover bid was announced, the issues discussed in the Spanish press at that time where also of nationalism nature, this time local nationalism between Madrid (capital of Spain) versus Barcelona (capital of Catalunya) not cross border. In the case of the US, it is even worst since the deal does not even have to do with US based companies. I wonder how Spain would have reacted if the British government had publivly opposed the recent acquisition of O2 by Telefonica under the same grounds, that telecommunication are a strategic market for the country and it should be in local hands and not foreign hands.
On the port deal, Americans seem comfortable with the British running their ports but not with the Dubai people doing so in spite of Dubai letting the US have a large military presence in their own soil, the word reciprocity does not seem to be known in this side of the Atlantic. The French, being French and representing the worst of the European nationalism (chauvinism is a more appropriate word in their case) have already reacted and decided to merge Suez with another French company, Gaz de France to avoid a takeover bid by the Italians. So much for all being part of the European Union, Spain does not want the Germans and the French do not want the Italians and in the way, they are ignoring the actual owners of the companies, the shareholders, as well as the rest of the country.
The interesting thing is that Bush seems to be the only president from all those countries that is doing the right thing, let the deal go through and I am sitting here agreeing with his decision which is pretty disturbing….
CD
