Thursday, September 26, 2013

Carlos Slim, KPN and Protectionism

Carlos Slim (America Movil) is interested in buying KPN, the equivalent of Ma Bell in the Netherlands. Privatized in 1988, it can be bought like any other company, at least in theory. Now that a buyout offer has been made, the Dutch government is raising alarm bells that foreign ownership could constitute a national security threat.

The Dutch government, led by the pro-market Liberal Party, can't have it's cake and eat it too. If it's so concerned about national security, it should buy out the shareholders at a proper price and take the company off the market.

I'm not betting on it.

1 comment:

  1. I don't agree. The government can define the property rights it is and is not selling. There is no reason why its options should be limited to the standard companies defined for private actors in Book 2 of the Civil Code. (See proposition 5 of my thesis, by the way.) If the government wants to retain certain rights will selling all the others, it can do that. The only issue is that the government should say so in advance. In this case, the problem is that the government used to have a Golden Share, but gave it up in 2006. That's the problem. If the government had simply retained its Golden Share, there would have been nothing illegitimate about its actions, because then would-be buyers would have had advance notice of what they could and could not buy.