26 September, 2014 - 08:43 By Tony Quested

Cambridge techs on attack after Obama own goal

Life science and technology businesses in Cambridge UK are accelerating plans for US acquisitions after President Obama attempted to stop American companies avoiding taxes through foreign takeovers.

In a bid to slam a fiscal portcullis across the Atlantic shoreline to stop US companies switching global HQs to Britain through acquisitions, the White House has inadvertently left the back door open to UK takeovers of American enterprises.

President Obama’s administration was put on alert when Pfizer tried to steamroller a multi-billion dollar deal to buy AstraZeneca. 

The US government has now announced a raft of new laws designed to stop American companies buying foreign rivals to move their corporate HQs offshore and escape high corporation tax.

While the immediate impact of the Obama strategy was to wipe millions off AZ and other UK target companies’ stock and £25bn off the value of the FTSE 250, the payback could now swing the other way as the President’s initiative hurtles into reverse.

FDs with Cambridge life science and technology companies – excluding startups – in Business Weekly’s Killer50 and Ones2Watch pantheon say they have now been put on red alert for potential acquisitions in the States.

Domino, AVEVA, Ubisense, Horizon Discovery, ARM, Darktrace and scores of others in the Cambridge cluster have scented a potential kill.

Economic observers in the US say the proposed new US rulebook provided active investors with a roadmap that was likely to turn US-based multinationals into “hunted prey, selling out to foreign rivals.”

The situation represents an incredible volte face in the normal scheme of things. Having reversed the brain drain to keep more academics in researchers this side of the Atlantic in recent times, Cambridge tech corporates have now been handed the initiative to become the hunters rather than the hunted and solve critical skill gaps in the process.

 

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