Jeremy Hunt bets on $1tn creation of ‘British Microsoft’

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Jeremy Hunt said the UK could create a $1tn homegrown tech giant to rival Microsoft or Google as he shrugged off foreign bids for London-listed companies as “part of how capitalism works”.

The chancellor has led a review of regulation to make it easier for start-ups to access funds to support growth and stem the flow of investment capital from UK equity funds.

“What is my measure of success? I would like to see a British alphabet, I would like to see a British Microsoft,” Hunt told the Financial Times.

“Maybe it won’t be in ten years. But I’d like to see a trillion dollar home business [market] cap with a large global presence. . . This would reflect my ambition for the UK to become the world’s next Silicon Valley. It’s a big dream, but we will definitely get there,” he said in an interview.

The $1 trillion (£800 billion) company would dwarf London’s most valuable businesses. Apple’s $2.9 trillion valuation alone is greater than the entire FTSE 100 at £2 trillion.

Britain’s leading technology company, chip designer Arm, was bought by Japan’s SoftBank in 2016 in a deal welcomed by Prime Minister Theresa May at the time. It subsequently chose New York over London when it returned to the public market last year.

In the past year, betting group Flutter, building materials group CRH and packaging company Smurfit Kappa are among those to leave the FTSE 100 in favor of a US primary listing.

Hunt’s aim to build global companies in Britain is likely to be part of his appearance on Thursday when he hosts a summit of technology directors at Dorneywood, the chancellor’s Buckinghamshire seat.

He insisted it was not too late for the UK to build tech groups as big as the US giants, saying: “There is no reason why we can’t have some tech giants born and bred in the UK, but they also grew to global dominance through British capital markets.

His reforms include overhauling UK listing rules, loosening restrictions on dual-class share structures that favor founders who want to retain control of companies after they list, and reducing the number of transactions requiring shareholder approval.

Some investors have warned that the proposals risk undermining Britain’s reputation for corporate governance and damaging its attractiveness as a financial centre.

Hunt dismissed concerns about a spate of takeover bids for British companies, which had partly fueled lackluster share prices.

“Big IPOs and then private companies are part of how capitalism works,” Hunt said. “And very often. . . a well-managed private equity firm can really transform a business in four or five years. So it shouldn’t worry us at all if it’s happening to some great British companies.”

The value of bids for London-listed companies this year hit the highest value since 2018, according to Dealogic data, with the majority coming from foreign buyers taking advantage of relatively low valuations.

US private equity firm Thoma Bravo has agreed to buy cyber security firm Darktrace in a £4.3bn deal, while FTSE 100 miner Anglo American and International Distributions Services, owner of Royal Mail, are also being targeted by foreign suitors.

“For someone like Darktrace, I want to make sure that if the people who created Darktrace want to be as big as Amazon, Google or Microsoft in terms of valuation, they can do it in the UK. Hunt added.

He cited Sir Demis Hassabis’s decision to sell DeepMind, a British artificial intelligence lab, to Google in 2014. Mustafa Suleyman, one of Hassabis’ co-founders, said last year that the UK should be “more supportive of large-scale investment. , more encouraging to take risks”.

Hunt said: “I want to make sure that the Demises of the future are confident that if they want to, they can raise the capital here in London to stay independent, so the UK will eventually get those giant tech players.