Leader: Loss of Wiseman could also be a gain

TO BUILD a Scottish family enterprise selling milk from a horse and cart into a publicly-quoted business that has now attracted a £279.5 million agreed take-over bid is surely cause for congratulation.

The story of Robert Wiseman Dairies is one par excellence of the fruits of hard work and enterprise. We need to see many more of these. But there is cause for sadness, too. The bid by German yoghurt maker Müller removes yet another name from the list of quoted Scottish companies. In recent years we have seen the exit of Scottish Power, Scottish & Newcastle, British Energy, Christian Salvesen, Grampian Country Foods, Stakis, Thus and Petrofac to name just a few. The financial sector has also seen the disappearance or demise of well-known names. Jack Perry, a Wiseman non-executive director, fretted when chief executive of Scottish Enterprise over the thinning-out of Scotland’s large and medium-sized independent companies: a low rate of business formation compounded by a loss of successful companies by take-over or merger. When the acquisition is by a foreign company this can be detrimental to Scotland’s managerial base and can leave domestic operations vulnerable to slimdown or closure.

However, there are points to counterbalance this. First, there are those Scottish companies such as Stagecoach, Wood Group and First Group that have grown by acquisition overseas. Second, overseas ownership can bring badly-neeeded capital and access to new markets. And third, the sale proceeds provide capital for institutional investment in promising companies. What’s vital is that Scotland has the optimal conditions for business growth.