Following on the bloody nose dealt out by Sainsbury's to private equity company CVC Capital Partners, the Dutch parliament has delivered a good kicking to CVC at a meeting in The Hague.
A Dutch MP bemoaned the 'ransacking of the country' by private equity groups. Apax Partners was hammered for a strategy that 'emptied' publisher PCM and 'gave back nothing to society'. Moves by private equity funds to break up the Stork conglomerate and the ABN-Amro bank were deplored by the parliamentarians.
It has been a similarly sorry tale at former Philips subsidiary NXP since it was bought by private equity firms last year.
First NXP pulled out of Europe's premier chip R&D project Crolles2, effectively finishing it off as a centre for doing advanced basic process R&D; then NXP closed a factory at Boeblingen losing 550 jobs; then it said it would not build a fab after the 90nm process generation meaning it's going fabless for 65nm processing; then it said sales would be down by between six and nine per cent in Q1 07 compared to Q4 06.
At Freescale Semiconductor, also bought by private equity funds last year, the move was also followed by a pull-out from Crolles2.
It does seem odd that, in the UK, whereas Chancellor Gordon Brown thought it right to remove the tax break on peoples' pensions, he still feels it OK to keep in place the tax break which allows private equity firms to set off against tax the interest on the borrowings which private equity firms use to buy, then ransack, these companies.
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