Rachel Riddle February 18, 2008 Wall Street Journal 3 IB 210 2:30-3:45 Northern Rock Takeover Marks a Risky Bet for U.K. Northern Rock PLC experienced the effects of country risk with the UK government nationalization. The United Kingdom government chose to make the decision to nationalize because private investors could not give the required amount of money to get Northern Rock out of its dilemma. Northern Rock owes the United Kingdom government some $49 billion. The government plans to only temporarily nationalize Northern Rock until the economy recovers and it can sell it back for a larger price tag. However, not everyone is feeling the warmth of nationalization. Stockholders of Northern Rock are upset about the move because with the way the stocks will be valued at much less than if a public sector deal had gone through. Everyone involved with the company is feeling the effects of nationalization, one of the risks of doing business abroad or in any country. There is talk of cutting jobs, and of course the
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Bank of England, Nationalization, Northern Rock, Northern Rock PLC