The news that US insurance giant Marsh and McLennan has swooped on British rival Jardine Lloyd Thompson in a shock £4.3bn move sparked a lot of City chatter about the future of the sector. Will other US firms look to snap up UK rivals as they eye expansion? As one Lloyd’s veteran put it to me: “There are too many firms chasing not enough money.” Consolidation is on the cards.
Amid all the reaction to the deal itself, some interesting comments made by Marsh chief executive Dan Glaser got a bit drowned out. Here’s what he said on Tuesday’s investor call: “Sure, Brexit creates some short-term uncertainty. So what? We are building a company that should perform well in the short term, medium term and long term, and anybody who thinks the UK is not a good place to invest, doesn’t know Great Britain. I lived in London for 10 years. Britain is a remarkable country filled with resourceful and resilient people. We were happy to bet on Britain.”
There was a time when Downing Street would have splashed these comments on a press release, but Theresa May’s not naturally enthusiastic about foreign takeovers – even ones that come with such a ringing endorsement of the UK.
Marsh is just the latest (and biggest) show of faith in the UK economy, following the news that a Spanish insurance giant is opening its head office in London, and a Swiss law firm is moving into town – specifically citing the attractiveness of post-Brexit Britain.
Next week, a European investment bank will announce a new London office. I don’t say all this to put a gloss on the current political uncertainty, or to deny the fact that some jobs and capital will move outside the UK. But the point is that the City is not a static entity – it never has been. Across different sectors and disciplines the tide will come in and the tide will go out. Overall, I continue to have faith that London’s advantages and attractiveness will ensure its continued success.
Uni-leaving doesn’t make sense
One of our running stories this week has been the growing number of institutional shareholders lining up to vote against Unilever’s planned delisting from the FTSE 100 and subsequent sole listing in the Netherlands – a move that would require index tracker funds here to sell the stock.
At least, that’s the conventional wisdom. As economist Gerard Lyons has pointed out, FTSE Russell, part of the London Stock Exchange Group, actually has the ability to accommodate a non-UK headquartered dual listed stock on the London exchange – as is the case with IAG and Tui. Indeed, in answer to a question in parliament on 10 September, City minister John Glen said listing rules were a matter for FTSE Russell, but noted that “discretion is available” within their framework.
So why the inflexibility? As Lyons says, all that’s needed is some good sense – or at least, a clarifying rule change. Expect this debate to heat up as we near the shareholder vote.
Putting the hammer down
I’d no sooner sport a hammer and sickle than I would a swastika, but for some reason the former – representing the 20th century’s other great terror – has escaped the association with tyranny and murder that surrounds the Nazi symbol. Now Walmart, the global retail giant, has been shamed into ditching a clothing range with hammer and sickle designs – which it sold for a socialist $30 (£22.61) – after Lithuania complained that the designs insulted the victims of Soviet terror. Corbynistas will have to shop elsewhere for their uniforms.
Macron’s not one to mince words
Emmanuel Macron is growing on me. He caused a minor outrage last week after telling an unemployed young person that he could get a job if he tried harder, recommending the hospitality sector. The new Napoleon has already infuriated the hard left by referring to some unemployed as “slackers” and he’ll never be forgiven by the unions after slamming striking workers for “kicking up a bloody fuss.” It’s refreshing to see a politician say what they actually think.