The Making of Global Enterprises by Geoffrey Jones

Author:Geoffrey Jones [Jones, Geoffrey]
Language: eng
Format: epub
ISBN: 9780714641034
Barnesnoble:
Publisher: Taylor & Francis
Published: 1994-03-01T00:00:00+00:00

1850-59

-

3

3

-

-

1860-69

4

-

4

4

-

-

1870-79

4

-

4

3

1

-

1880-89

8

-

8

6

2

-

1890-99

30

-

30

25

5

-

1900-09

77

2

75

46

25

4

1910-19

58

2

56

38

17

1

1920-29

167

9

158

95

61

2

1930-39

170

13

157

113

36

8

1940-49

71

3

68

46

21

1

1950-59

270

40

230

135

85

10

1960-62

145

11

134

54

74

6

Total

1007

80

927

568

327

32

Source: Database. US firms were the most active in acquiring British firms, although acquisition strategies were by no means confined to them. The first acquisition was in 1874, when Anglo-Swiss Condensed Milk purchased the English Condensed Milk Co., and with it two factories in Middlewich and Aylesbury.48 In the 1880s there were acquisitions by American and German firms. The former – the Edison Electric Light Company – entered British manufacturing in 1883 by merging its preexisting British sales subsidiary with its British competitor, to form the Edison & Swan United Electric Co., with plants at London and Newcastle. Two years later the Vereinigte Rheinisch-Westphalische Pulverfabriken of Germany acquired the Chilworth gunpowder factory in Surrey.

The inter-war years saw many acquisitions of British companies, some of which had – or developed – considerable significance. Examples included General Motors’ acquisition of Vauxhall in 1925, and the Procter & Gamble acquisition of Thomas Hedley, the oldest established Newcastle soap manufacturer, in 1930. The American purchase of Thomas Hedley heralded a major assault on the British soap market. Within three years Procter & Gamble had not only modernised the acquired factory in Newcastle, but built a large new factory in Manchester. Under American control, the firm launched the first powdered soap detergent on the British market, and achieved an increase in its share of the British soap market from 1.5 per cent in 1930 to 15 per cent in 1935. The recently created Unilever lagged behind Procter & Gamble in the development of detergents, and was, at best, able only to slow down the American gains of market share.49

Firms often combined greenfield and acquisition strategies to enter Britain, as well as entering Britain ‘accidentally’ through the acquisition of other foreign companies which possessed British subsidiaries. The International Telephone & Telegraph Company (ITT), for example, first entered Britain in the mid-1920s when it acquired Western Electric’s international business, which included the British subsidiary that became Standard Telephones and Cables. Three years later ITT acquired Creed & Co., a South London manufacturer of teleprinter and data-processing equipment. The new subsidiary, ITT-Creed, extended production of communication equipment to a new site in Wales in 1938. In 1930 ITT also acquired an American company, Kolster Radio Corporation, which had begun manufacturing headphones in Slough in 1924.50

There was a considerable expansion in the number of acquisitions after 1950. No official statistics of foreign acquisitions of British firms exist before 1969. The Dunning sample of American manufacturing affiliates active in Britain in the early 1950s showed that only one-fifth had involved a takeover of existing British interests.51 Table 4 suggests a higher level of acquisition activity.

Firms which were already manufacturing in Britain expanded further through acquisition. United States examples included Monsanto, Union Carbide and ITT. In the food industry, Corn Products Inc., for example, had acquired a British manufacturing company in 1920, and expanded further with the acquisition of Brown & Poison in 1935, securing thereby a virtual monopoly over British starch output. After 1945 the American company made further acquisitions,

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