The planned takeover by G4S (previously Securicor and Group 4) of ISS (previously Rentokil and Danish owned), which would have created the world’s largest facilities management company, was unexpectedly derailed on 1 November and the wedding was off! The £5.3 billion dowry was obviously wrong for the City.
The prospect of a company employing over 1.2 million world-wide, providing services ranging from hospital cleaning, catering and private prisons to supplying “security” to the world was obviously too risky. £50 million was wiped off the value of G4S’s share price during this fortnight romance but at least £78 million was saved on fees to financial advisers Deutsche Bank, RBS, HSBC, Morgan Stanley, Goldman Sachs and other pariahs. So G4S returns to its “quest” to conquer the world of outsourcing, private security – including the 2012 Olympics – by stealth and acquisition rather than one “big bang”.
What else does this failed takeover show? It shows that within the multi-national corporations which dominate outsourcing and privatisation – G4S, ISS, Serco, Compass, Capita, Veolia, Interserve, Balfour Beatty, Sodexho, Mitie, to name but a handful, the pressures of competition and the market are threatening their very survival.
Competition and the market, the very terms which were deployed against the nationalised industries and public services, now have the same vultures devouring each other. The monopolies that have been established have to get bigger, more profitable and more ruthless if they are to satisfy the demands of City investors and banks. For workers who have been outsourced to cut costs this has meant reduced terms and conditions, cuts in wages, destroyed job stability, deskilling: not to deliver services or goods but dividends to shareholders. ■