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Citigroup exec slams rise in M&A protectionism:Posted By: Joshua Boyles By Mathieu Robbins LONDON (Reuters) - A senior executive of Citigroup (NYSE:C - news) criticized governments on Thursday for resorting to protectionist measures that could stifle the recent boom in mergers and acquisitions and hurt some economies.William Mills, chairman and chief executive of Citigroup Corporate and Investment Banking for Europe, the Middle East and Africa, said the current boom in crossborder M&A was seeing some governments react in fear by protecting their borders. "Despite record growth in international markets, we are witnessing a worrying trend toward political interference in cross-border deals," Mills said in a speech to the British American Business Council. His bank topped global merger and acquisition advisory in the first quarter, according to financial industry data provider Dealogic. The comments by Mills come amid a growing protectionist stance in both Europe and the United States toward foreign firms trying to move in and snap up local assets. Still, the fact the bids are occurring is encouraging, he said. "These challenged bids do represent a step forwards because they are proof that companies are at least thinking crossborder," he said. Earlier this week, Citigroup Chief Executive Chuck Prince sent an open letter to the Washington Post criticizing a resurgence of protectionism in the United States in the wake of opposition to several takeovers by Middle-Eastern companies. "Introducing overt political considerations into decisions regarding the allocation of capital has the potential to undermine investor confidence -- both domestic and foreign --in U.S. markets and jeopardize the continued vibrancy, depth and liquidity of those markets," Prince said in the letter. Examples abound in Europe. Italy's industry minister has accused France of being "outdated" and harking back to the era of Charles de Gaulle by intervening to merge two French utilities before Italian rival Enel (ENEI.MI) swooped in. And the European Commission wants to know if Spain beefed up its powers to block a bid for the country's largest utility, Endesa (ELE.MC), by Germany's E.ON (EONG.DE). The German company launched a 29 billion euro ($35 billion) bid last month. The Committee on Foreign Investment in the United States is reviewing state-owned Dubai International Capital's acquisition of Doncasters, which operates U.S. plants making parts for defense contractors. Less than a month before, government-owned Dubai Ports World agreed to relinquish control of six U.S. ports it had acquired from British firm P&O (PO.L) after the deal provoked a political storm in the United States. Mills said such protectionist moves -- as global M&A volumes reach their highest since 2000 -- could cut off investment and hurt some domestic economies. "It's our responsibility, as business leaders, as thought leaders, to speak up against this alarming trend," he said. Courtesy Of: Yahoo! News The information reported above is property of Yahoo! inc. and reprinted or modified with legitimate permission. We thank Yahoo! inc. for the kind cooperation with us and other shareholders. |
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