The Intertek Takeover: A Test Case for Private Equity’s Growing Grip on the UK Market

The news that Intertek has agreed to be acquired by Swedish private equity firm EQT marks another significant milestone in the trend of big-name UK companies falling prey to foreign takeovers. The estimated £10.6 billion value of this deal, including debt, underscores its substantial impact and reflects a broader pattern: the increasing dominance of private equity firms on the UK market.

Intertek’s decision may seem pragmatic, given the pressure from investors to sell up. However, other factors likely contributed to this outcome. EQT’s proposal offered significantly better terms than previous approaches, including a £60-a-share offer that was higher than any previous bid. This undoubtedly played a crucial role in swaying the board’s decision.

Intertek’s board has been committed to its strategic review, initiated last month in response to growing investor pressure. The company had repeatedly asserted its confidence in its standalone strategy and value-creation opportunities. However, EQT’s proposal presented an attractive alternative that the board could not ignore.

This development highlights the changing landscape of UK business ownership. Private equity firms are no longer content to merely observe from the sidelines; they are actively seeking to acquire and shape influential companies like Intertek. The sheer scale of these transactions raises fundamental questions about the role of private equity in UK industry and its implications for employees, customers, and shareholders alike.

The trend is not limited to this single deal; it reflects a broader shift towards consolidation and foreign ownership in the UK market. Other notable examples include Beazley’s insurer and Schroders’ fund manager, both of which have accepted multibillion-pound offers in recent months. The loss of control and influence that comes with such takeovers cannot be overstated.

Some may argue that private equity firms bring much-needed investment and expertise to struggling companies like Intertek. However, as the case of Intertek demonstrates, even well-established businesses can fall prey to aggressive takeover tactics. The £60-a-share offer from EQT is a far cry from the meager £51-a-share bid just a few months prior, underscoring the rapidly shifting sands of investor sentiment.

The words of Marcus Wallenberg in his 1946 letter to his brother Jacob remain relevant: “To move from the old to what is about to come is the only tradition worth keeping.” In today’s business landscape, this philosophy has evolved into a more insidious form – namely, the ruthless pursuit of profit and control at any cost.

As we await the outcome of EQT’s proposal and the subsequent vote by shareholders, one question looms large: what does this mean for the future of UK industry? Will other companies soon follow in Intertek’s footsteps, sacrificing their independence to private equity’s allure of quick cash and guaranteed returns? The coming months will undoubtedly provide valuable insights into this trend.

The stakes are higher than ever before. As Intertek navigates its uncertain future under EQT’s stewardship, it is clear that true value lies not in profit margins or market share but in the enduring legacy of a company’s people, products, and principles.