AMERICAN$ BUY INTO UK $UCCE$$ $TORIE$

Overseas investment in British businesses continues to grow when it seemed that we had reached saturation level. Surely that is a good thing. Well, that depends upon how you look at it.

The latest involves one of the most successful UK tech firms in that Alphawave has agreed a deal to be taken over by equally successful US company Qualcomm for around £1.8 million.

Alphawave’s success story is an object lesson in that it has grown in both size and status at an incredible rate since it was founded in 2017. Its website reveals:

Founded in 2017, and profitable since 2018, Alphawave Semi has a world-class track record delivered by our experienced founding management team, supplying global Tier-One customers.

‘Our leading-edge technology advances push the boundaries of wired connectivity capabilities, enabling data to travel faster, more reliably, and using lower power.

Powering next generation technologies, we serve Tier-One customers in North America, Asia Pacific, Europe, and the UK. Our innovative solutions have repeatedly set industry benchmarks in terms of performance, power consumption, size, and flexibility.’

The American ethos is often, ‘if you can’t beat it – buy it’ and that is what has happened.

Shareholders in the UK firm, which designs semiconductors attractive artificial intelligence (AI) development, will receive 183p per share under the terms agreed..

That’s a pretty good return.

The question is what will be the future for Alphawave and its employees? When a company is sold, its control and decision-making switches to the new owner. Will the company continue to prosper or will it be Quantum simply removing a thorn in its side? A removed thorn is generally discarded. Only time will tell.

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EUROSTAR TO GO FURTHER AND FASTER

There was a time when a train trip from London to Brighton was exciting but that almost pales into insignificance as Eurostar has announced its plans to open up new services from London to Geneva and Frankfurt early in the next decade.

Eurostar is investing £1.7 billion (2 billion euros) in buying 50 new trains which will probably start their careers around 2030.

Gwendoline Cazenave, CEO of Eurostar revealed, “We’re seeing strong demand for train travel across Europe, with customers wanting to go further by rail than ever before and enjoy the unique experience we provide. Despite the challenging economic climate, Eurostar is growing and has bold ambitions for the future.

“Our new fleet will make new destinations for customers a reality – notably direct trains between London and Germany, and between London and Switzerland for the first time. A new golden age of international sustainable travel is here.”

How quick will it be? Well, the Eurostar train can currently reach a top speed of 186 miles per hour on high-speed lines in the UK, France, Belgium, Germany, and the Netherlands. It has to slow down inside the Channel Tunnel where the maximum speed is 100 miles per hour. Of course, there are not so many roadworks on the railway system!

The new trains will bring the total Eurostar fleet to 67 trains – a 30% increase on the current fleet.

Eurostar also plan to add a fourth daily service between London, Rotterdam and Amsterdam from 9 September, followed by a fifth from mid-December.

This is good news for travellers of course but bad news for train spotters – can you imagine trying to get the details of a train travelling at close to 200 mph?!

DON’T LOOK NOW BUT THERE ARE TAX RISES CREEPING UP ON US…………

The fourth highest ever April figures for government borrowing seem to point to only one conclusion – tax rises in the Autumn. Since the year seems to be flying past it will not be long before we have even more business and personal financial implications to consider.

The budget speech at that time of the year usually takes place at the end of October or early November and contains a mixed bag of slaps and sweeteners. This year will probably be no different but the slaps might well be more stinging than the sweeteners can mask.

In April government borrowing to bridge the gap between spending and tax income was £20.2 bn. Which was £1bn more than the previous April and the fourth highest in the 32 years since these records began.

This is not new of course and it is quite common for government spending to outweigh tax income but at this time of particularly jittery global financial confidence some stern action needs to be seen to be taken.

Since April government spending does not seem to have decreased in any way with winter fuel payments being restored, government funding for other projects and acquisitions and continued general price rises, the deficit seems more than likely to grow.

It is amazing how ‘government’ funding or ‘government’ bail-out etc has become so much a part of our daily dialogue that we can easily forget that whichever government is in power, they hold the purse but the contents are actually provided by the taxpayer.

When the purse gets empty the government flogs a few more bonds to just about anyone who will buy them. The actual transaction means that the government gets the money and the buyer gets the bond which is for an agreed time after which they will get their money back plus interest. Thus the fund-raising is borrowing and not simply a garage sale.

To gain confidence -as well as more money – governments have to be seen to be taking some dramatic action, hence the tax rises.

Stand by for such tax rises this autumn – there is probably no better time than now for business owners and executives to tackle The Law of Diminishing Simplicity.

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