French missing the global point.(Column)

Byline: ANTHONY HILTON

IT rankles with many in Paris but the success or otherwise of efforts in France to create a national pharmaceuticals champion may be decided in London.

The $60 billion ([pounds sterling]33 billion) bid by Sanofi-Synthelabo for Aventis is primarily aimed at stopping one or both being gobbled up by foreign competition - one of the big US firms, Britain's GlaxoSmithKline or Novartis of Switzerland. To this end, French Finance Minister Francis Mer endorsed the deal even before it was announced. Good job he is outside the Financial Services Authority's reach!

The line is that if the deal goes ahead, the company will be the world's third-largest pharmaceuticals outfit and undeniably French.

But that ignores the fact that nationality is a movable feast these days.

When the nominally French company Elf Aquitaine was under siege a few years ago and again when French bank Paribas was being fought over by Banque Nationale de Paris and Societe Generale, most of the presentations to shareholders were made in London because that was where most of them were based.

Something similar is likely to happen-this time. Because Aventis was formed five years ago by the merger of French Rhune Poulenc and Germany's Hoechst, its shareholding has never been particularly French.

Today is no different. Only 20% of shareholders live in France, and a similar number in the rest of continental Europe. A further 22% live in North America and 14% in Britain.

The biggest single shareholder, Kuwait Petroleum with 13%, runs a lot of its money in London.

So if the deal goes through, it will create a French national champion that is unlikely to be majority French-owned, given that the bidder is smaller and has its own slug on non-French investors. This is what the globalisation of fund managementmeans. Odd that the French still don't seem to get it.

Tale of our times

A TELEPHONE engineer once told me that, when confronted with a tricky fault, the simplest solution was to switch the defective line with one that was working perfectly.

The customer with the fault is happy with the prompt "repair", the engineer gets his piecework payment and productivity-related bonus, the subscriber whose phone has been put out of service normally takes a day or two to realise there is a fault and when they do, it brings in another job on piecework.

Such practices may have happened in the dark ages before 1984 but they have no doubt been ruthlessly stamped out in the brave world of privatised British Telecom (though the engineer did look to be in his twenties - maybe he was told the story by his father).

On a related theme, a reader has hit on what he considers the modern equivalent of planned obsolescence.

He bought a Sony Vaio laptop computer but it arrived without the cable that is vital for loading new software. Fruitless efforts to get the original or a replacement spread over weeks of dealing with shops, helplines, internet suppliers and, of course, Sony itself. It seems a spare cable is impossible to obtain - unless he buys another complete machine for almost [pounds sterling]2000. This he may have to do, although it is unlikely to be another Sony.

In many ways, this is an allegory of our times. Sony has outsourced its after-sales servicing to different organisations, each handling one narrow area of the sales catalogue and no one having an overall picture of what goes with what. So the system can't cope with an unusual query and goes round in everdiminishing circles while Sony remains blissfully unaware of the damage being done to its name.

The reader has now put his faith in Sony's own complaints-handling procedure. But his customer complaint number is 1,276,009, and he fears there may be 1,276,008 ahead of him in the queue.

German greed

THE fallout from the Parmalat scandal has raised suspicions about all business things Italian. Indeed, agencies that specialise in country risk have been heard to suggest that they should put a negative weighting on the whole country and the businesses in it as a defence against the Italian practice of having three sets of books - one for the taxman, one for the shareholders and the real ones.

But conversations with venture capitalists and private equity houses that make investments on the Continent paint a different picture of European honesty. They are pretty consistent in saying it is not the Italians who cause the trouble; the risk of fraud is far greater in Germany because there, as in America, they really do believe that greed is good.