Participation and Disinvestment

‘Participation’ (or dilution of the equity in a locally registered subsidiary) had two distinct though connected connotations in the context of foreign merchant capital in Africa. It might be voluntary, or it might be imposed. The difference was very important. It has been seen that many of the industrial and other ventures in which UAC and its fellows took part were undertaken in partnership with African states, provinces, or individuals. These partnerships were always entered into by choice, and it was accepted that the result would be a reduction in both the company’s freedom of action and its share of the dividends. Alternatively, UAC might choose to sell shares in a subsidiary because it wished to raise more capital without increasing its own input, or perhaps to strengthen its links with the local society or with distributors of its products. But from the 1960s there was an increasing tendency for African governments to insist on the sale or expropriation of a proportion of the equity of foreign enterprises, either to the state or to indigenous citizens, whether or not the foreign company wished to do this. The subject of this chapter is the process by which voluntary partnerships or sale of part of the equity were increasingly replaced in certain countries by obligatory sale of shares. The main emphasis will be placed on the same four territories or regions as have been made the focus of other chapters, but a preliminary comment is necessary on the evolving general attitude of Unilever and UAC to participation in their overseas ventures.

Business · Context (archaeology) · Dividend · Economics · Equity (law) · Expropriation · General partnership · Indigenous · Market economy · Multinational corporation · Political science · Subsidiary · African history and culture studies · Finance · Law