It seems as though another one of our great British companies is about to be gobbled up, this time by chocoholic Americans. Kraft is putting in a hostile bid for Cadburys. I fear that yet another market is about to be cornered by an international conglomerate with little commitment to where the company originated.
The ongoing growth of companies by merger and takeover rather than by organic growth of the business itself is something that now has to be questioned closely. Some of these merged companies are so big they are stronger than some governments.
Whilst there is understandable economies of scale, is it a price worth paying if competition is reduced? Some recent mergers have been a disaster. Look at Lloyds Group. The banking crisis would have been greatly reduced had the banks been smaller. 20 years ago, the 7 institutions that are now part of the group were all independent of each other: Lloyds, TSB, Halifax, Leeds, Cheltenham and Gloucester, Bank of Scotland and Scottish Widows.
Now the process has gone too far and Lloyds, having just merged with HBOS is now required to down size. The issue now is whether or not other sectors of the economy need the same treatment.
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