Another headquarters gone
Dana Petroleum no more. Venture Production no more. HBOS no more. Scottish and Newcastle no more.
Scots used to lament the departure of clans from the Highlands, and then, as the Proclaimers proclaimed, great industries as they exited the towns that had been built around them.
The departure of headquarters has been less a part of the national psyche. But it's no less significant for all that.
Some firms do better once they've been taken over. Added investment and bigger markets as part of a international enterprise can be the making of them.
Search for savings
That's rather less likely in the oil and gas business, where it's assets being sought.
With the board of Dana Petroleum throwing in the towel this afternoon in its battle to fend off a hostile takeover bid from the Korean National Oil Corporation, the London Stock Exchange has said that trading in its shares will cease on 29 September.
A source close to the Koreans says the state-owned corporation wants to keep staff, management, know-how and expertise, as its past acquisitions would suggest.
But there's bound to be an impact when decisions are made elsewhere. The search for synergies and savings start here, to get value out of the takeover.
And the spend on headquarters functions will fall.
That will hit Dana's accountants, advisers, auditors and lawyers, perhaps extending to engineering sub-contractors if bosses in Seoul prefer to place their business locally.
Of course, this is part of business Darwinism.
It's down to Dana's success that it's being bought for nearly 拢1.7 bn. Where it failed was in trying to convince its shareholders that it was worth more than that.
Proud achievements
But where people have invested their time and passions in growing a company, a takeover comes with a sense of personal loss.
That came through in the statement today from Colin Goodall, Dana's chairman.
He said Dana had "a bright future and would have continued to grow strongly".
He reminded staff that the company began with funding of less than 拢1m, and it was listed on the London Stock Exchange 14 years ago with market capitalisation of 拢24m.
There was generous praise for chief executive Tom Cross and the rest of the company's team. "Dana's personnel across the world can be very proud of what they have achieved," said Goodall.
Energy security
The loss of independence for another Scottish company is not happening in isolation.
It fits into another very significant development in the global economy.
There's a determination to secure supplies of natural resources. That's what's taken Chinese into Africa and South America on a colossal scale.
And concerns about security of energy supply is particularly acute, as developed nations try to avoid over-dependence on unreliable trading partners and hedge against volatile global prices.
That's what led Centrica, owner of the Scottish Gas and British Gas brands, to take over Venture Production, also based in Aberdeen until last year's buyout.
Securing upstream oil and gas assets is to ensure Centrica can meet its customers' demand when markets get rocky.
Polar explorer
The Korean National Oil Corporation was set up by the Seoul government in 1979 to do something very similar, after the country found itself badly exposed to that decade's oil price fluctuations.
The company's website (in Korean English) is patriotic in its approach, saying it seeks "nothing less than to provide hope and a better life for the people of Korea and to earn their trust".
It boasts of how its exploration, acquisition and stockpiling are safeguarding the nation's interests: "Furthermore, KNOC is securing the next generation energy sources by doing extensive activities such as exploring the polar regions, remote areas and deep seas, and making research on oil sand, the non-traditional petroleum".
So there's a global aspect to this story.
But the more parochial one takes us back to a series of familiar questions in Scottish business; what can be done to stop successful companies from being taken over, with the loss of headquarters power, and then why are not better at replacing them?
Familiar questions. But are there any convincing answers?
Hullo, I'm Douglas Fraser, and I'm business and economy editor at 大象传媒 Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 25th Sep 2010, Wee-Scamp wrote:The other question is given the UK's Govt attitude to state owned companies in this country why is it prepared to throw its prejudices out of the window when it comes to satisfying City greed?
We also all know that if a Scottish oil company tried to buy KNOC the Korean Govt would rebuff any approach immediately.
There are answers of course. The first step is to give full fiscal powers to Holyrood and the second is Scottish independence. There's no other way of preventing this happening in the future.
As to why we're not better at replacing them then look no further than the City. It isn't interested and it doesn't do creation.
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Comment number 2.
At 25th Sep 2010, CyranoinLondon wrote:Tosh of the first order. Scottish independence or not the shares are listed in London. They are publicly traded which means they can be bought by anyone.
If the Scots want to stop companies being taken over an independent Scottish govt could nationalise these companies but I seem to recall that nationalised companies turned out to be pretty poor investments for the taxpayer, so I can't see nationalisation being welcomed as a policy.
THe truth is that all of the UK has been subsidised for the last 30 years by the SE of England and the City in particular. Ken Livingstone put his finger on it best when he said that there should be no govt cuts to services in London because London could still afford what it spent; it was the rest of the country that couldn't.
I'm waiting for LIP - London Independence Party - dedicated to an autonomous city state bounded by the M25. Would fellow independence seekers support this? :-)
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Comment number 3.
At 25th Sep 2010, lixxie wrote:It is not the government's failure or in this case Dana's management. But UK companies fail to look at global scale and grow the companies. We lack a global ambition,instead happy to stay UK based or maybe Europe and America. The message now to UK companies is you must widen your ambitions and grow in Asia, Brazil, etc. If we don't we remain as minnows waiting to be swallowed up by bigger companies now in India, China, and so on. Unions and employees also need to realise this global nature and if they want to stay in control they have to help their companies expand globally
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Comment number 4.
At 25th Sep 2010, Wee-Scamp wrote:#2
You can't buy KNOC shares anywhere though because of course it's owned by the Korean Govt.
The truth is that the City has sold off large swathes of UK industry and failed to invest in replacements because it prefers to trade rather than invest. Strategically the City is no real use to us at all. It could be but choses not to be.
#3
You can't grow UK companies because the millisecond they achieve any real value the City will sell it off.
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Comment number 5.
At 25th Sep 2010, WolfiePeters wrote:@2, CyranoinLondon: 鈥..London Independence..鈥
Brilliant, the sooner the rest of the UK can be free of the financial whizz kids the better. Imagine: we could have a manufacturing industry again, positive balance of payments, old fashioned banks and building societies ... ... .
Bring it on!
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Comment number 6.
At 25th Sep 2010, stirling222 wrote:Re. #5
Yeah, and my plan for the tax we'll slap on foodstuffs will definitely eat into their profits. Let's see how far a country can go on banking alone...
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Comment number 7.
At 25th Sep 2010, WolfiePeters wrote:Re #6
Stirling,
I vote for you to be Chancellor!
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Comment number 8.
At 26th Sep 2010, rog_rocks wrote:Meanwhile; today live on totally impartial and balanced 大象传媒 Scotland, I鈥檝e been watching an all day election broadcast on behalf of the Labour party. I hope they are actually going to balance this up a bit.
A small window into today鈥檚 大象传媒 broadcasts;
The balanced and impartial Jon Sopel, excitedly;
"Eh, Amanda Platell for the Daily Mail, I mean, what an extraordinary psycho-drama...it was dramatic anyway...what was played out yesterday..."
Neutral and balanced guest, also excitedly;
"...It was incredible...I...I...thought the most touching moment was when David actually touched Ed on the back of the head when they hugged, it was almost like sending him off, you know, its your journey now, its so sad..."
What????
"The voices of middle England have spoken"
"We are not the SNP"
Even the bobbing professor looked excited.
I'm sure all this will help our country???
Don't you think real news, facts and what some of your colleagues claim false fame for...actually asking difficult questions, would be more appropriate than the second rate propaganda shows currently available for your countrymen.
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Comment number 9.
At 26th Sep 2010, supermk wrote:re. "....to stop successful companies from being taken over, with the loss of headquarters power, and then why are not better at replacing them?"
Why was HBOS mentioned in this light - there can be few worse cases of an unsuccessful company that was bailed out at (UK please note) taxpayers expense.
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Comment number 10.
At 27th Sep 2010, Gary Hay wrote:As I've pointed out for years - this is a direct result of relying on the free market economy vs the nationalised economies of other countries.
In 20 years, every country will need to secure energy resources and agreements with one another - or "hydrocarbon portfolio / diversity" as many energy companies put it.
In the UK - our last nationalised oil company went the way of the pear with Thatcher - who insisted the free market model would benefit us all. Well, it hasn't and doesn't ever look likely too.
If you took a snapshot of the 15 largest oil and gas companies in the world, which names would you expect to find? Shell, BP? Exxon Maybe?
Not even close. Exxon doesn't even feature in the top 15, but lies as the 17th biggest company - making it the biggest privately owned oil company in the world.
The 16 before it are all nationalised industry Giants, unsurprisingly led by the Arabs and Emirates, Russians & Persians and the South Americans.
So what might one infer from this? That we will be heavily reliant on foreign oil for the foreseeable future? It looks increasingly likely. So what then of new discoveries in the Falklands, Greenland and the Arctic? Well as you can imagine, nationalised companies have been mobilised to find and secure new assets in "frontier" landscapes such as the Arctic, the Russians going so far to put a FLAG on the seabed of one such frontier.
My personal feeling - having first hand experience of oil and gas since my teens - is that within the next 10 to 20 years the world will essentially be at war over access to energy supplies - and that without a nationalised energy company with the support and direction of the state, we stand no chance in the new world that awaits us.
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