The bell is tolling for ICI, the once mighty Imperial Chemical Industries that invented polythene, beta blockers and assorted materials used to make the first atomic bomb.
Akzo Nobel has fired off a £7bn bid for the company and although ICI boss John McAdam has rejected the offer as too low, analysts say it is just a matter of time before the Dutch firm renews its attack or others enter the fray. BASF of Germany and America's Dow Chemical are cited as possible counter-bidders.
Turn the clock back 40 years and no one would have believed that ICI faced being gobbled up by a foreign predator. The firm employed 130,000 people from New Zealand to Canada and, like British Petroleum, was viewed practically as an arm of the British state.
Today, ICI is a shadow of its former self following three decades of rationalisation. Its market value has fallen from £11bn to £5bn and the workforce has shrunk to just 26,000. But as former chairman Sir Denys Henderson says: 'Companies don't go on for ever and a day: they must adapt to changing circumstances.'
The company's fall from power mirrors the UK's own post-imperial decline as a manufacturing nation. A former industrial bellwether, ICI supplied raw materials to a country where hundreds of thousands were still employed in shipbuilding, steel and aluminium production and making cars. Heavy chemicals helped to oil the wheels of industry in Britain and the old Commonwealth.
But the company's top brass remained wedded to imperial values in a post-imperial world. Their attitude would astonish investors today. Writing in 1961, ICI chairman Paul Chambers pooh-poohed the notion that the company should move into expanding and more profitable sectors. Instead, he said: 'There is a public duty to go on making the essential, basic, chemicals even though the sales may appear to be less progressive and less profitable. ICI could not, for example, withdraw from the production of industrial explosives without giving the government and the public many years' notice of its intention.'
History worked against ICI. Before the Second World War, the world chemicals industry was composed of just three companies: IG Farben of Germany, which dominated Europe, DuPont, which controlled the US, and ICI, which spoke for Britain and the Empire. They set their own prices and never competed in each other's markets. All that changed after the war when regional markets began to break down and firms were exposed to the icy winds of international competition.
Arguably, the sheer size of ICI worked to its disadvantage. A former senior manager who worked at the company for 28 years until 1994 said: 'We were too big, trying to do too many things. We were in bulk chemicals, pesticides and biosciences. ICI was more diverse than even its main global rivals. Something had to give.'
What gave, eventually, were the company's profits: in 1980 ICI reported its first ever loss and cut the dividend. The results sent shockwaves around the City. Martin Adeney, the former BBC industrial editor who worked in ICI's communications department for 10 years, says: 'The whole business was under pricing pressure and that affected ICI's ability to maintain its competitive edge. We would come up with a new product, but it was soon copied by rivals in the Middle East or eastern Europe who could supply the same thing for less money.'
The business historian Geoffrey Owen has suggested that Britain's failure to join the Common Market deprived ICI of the kind of growth enjoyed by European firms at a time when continental trade was going through the roof. But, in the long run, Owen reckons that ICI, like many of its competitors, was always on a sticky wicket. 'There has been a re-ordering of the chemicals industry and tremendous upheaval. Production is shifting to lower cost centres in the Far East and elsewhere; ICI has been caught in a historical cross-current. So too have others.
'Hoechst [the German firm that emerged from IG Farben's break-up in 1951] has been restructured out of existence; DuPont has survived but has been forced to streamline its operations.'
At ICI, there was a brief renaissance in the mid-1980s when it was the first company to make £1bn profit under Sir John Harvey Jones, who sold off lower margin businesses such as soda ash (which goes into glass) and industrial explosives and focused on petrochemicals, polymers, agrochemicals and the fast-expanding pharmaceuticals operation.
But when the recession came in 1990, chairman Henderson discovered that the company hadn't done enough. And then Lord Hanson struck, buying a stake in 1991 and seeking discussions with the board. ICI conducted a remarkable lobbying campaign, convincing even some ministers in the Major government that a Hanson break-up of ICI would be against the national interest. In the end, Hanson didn't bid, but the cat was out of the bag.
A former director says: 'We all knew that if Hanson had broken up the company, he would have made a lot of money. The new mantra was shareholder value, so we began to work on ways to break the company up ourselves.
'ICI brought in [rising investment banking star] John Mayo from SG Warburg to help with the project. He decided that the firm was in too many product ranges and too many geographies.'
Mayo and his team realised that ICI was a chemicals company wrapped in an expanding pharmaceuticals business. That realisation led to the demerger of the pharma arm, renamed Zeneca and separately quoted. Zeneca eventually merged with Astra to become one of the FTSE's top 30 companies.
But the chemicals business seemed to lurch from one crisis to another. In the mid 1990s, chief executive Charles Miller Smith reshuffled the portfolio again, selling what one analyst described as the 'cyclical, smelly industrial bits', and buying Unilever's higher-margin speciality chemicals. But debt hit £3bn, almost the same as the company's market valuation. It was time for another round of cost-cutting and rationalisation.
Under McAdam, ICI has paid off its borrowings to emerge as a paints company with Dulux as its most famous brand. It also owns National Starch, the US-based adhesives business.
Adeney says: 'The ICI story is that its home market disappeared with the demise of British manufacturing industries. Linked to that trend has been stiff global competition and constant pressure from shareholders for ICI to reinvent itself.'
Owen says those who argue that ICI would have stood a better chance had it been in Europe, where governments are more protectionist, are probably wrong: 'It might have slowed down the process of contraction, but the result would have been the same,' he says.
In the end, the City viewed ICI as a conglomerate that had overstretched itself and was ripe for unbundling. Ironically, the same fate awaited Lord Hanson's company, which exploited acquisition accounting rules to assemble - according to investors - assorted businesses under one roof with few synergies and scant commercial logic.
It would be wrong, however, to conclude that ICI has been an unmitigated disaster. Zeneca has been successful and so too has ICI's Australian business, now called Orica, the world's number one industrial explosives company. A number of ICI's chemicals operations have been acquired by Ineos, the profitable and privately owned UK mini-multinational.
But the fact that parts of the group are still flourishing under new ownership will be little comfort to those who rue the demise of yet another once-great British industrial giant.
Arab investors: Britain's a good home for petrodollars
The tide of foreign money flowing into Britain isn't confined to City takeovers. One of the hottest spots is commercial property, where overseas investors have poured billions into offices, retail and residential premises over the past six years.
'There is a wall of money coming in from the Middle East,' says property analyst Mike Prew at Lehman Brothers. 'Arab countries are awash with petrodollars, and London properties have been the destination of choice for their cash.'
Consultancy DTZ says the value of UK property owned by Middle East investors exceeds the entire portfolio of Land Securities (£14.8bn), the UK's largest property group. Two of the most expensive homes sold in London last year were bought by Arab investors. The Qatari foreign minister, Sheikh Hamad bin Jaber al Thani, paid £100m for a penthouse at One Hyde Park in Knightsbridge. Gulf investors are also understood to have bought a home in Belgrave Square for £33m. But the biggest London residential deal was done in 2006 when the Abu Dhabi royal family bought 33 Cavendish Square for a staggering £445m. Elsewhere, Dubai's Maktoum royal family is said to own a huge portfolio of central London properties, with Lowndes Square often referred to as 'Dubai Square'.
Analysts say prime City office property is also being targeted by Middle Eastern money, not least because Britain is viewed as more accommodating than the US, where there was a row two years ago about Dubai Ports World taking over US ports as a result of its acquisition of Britain's P&O. Some on Capitol Hill thought this could pose a security threat. The ports were eventually sold on to assuage concerns, much to the chagrin of Dubai, which views itself as a staunch ally of America and friend of the West.
Prew says: 'London is seen as a safer bet: some investors have been redirecting funds from the US to new offices in London.' According to DTZ, Middle Eastern investors have spent £8.9bn on commercial property in the past five years.
Prew reckons there could be a slowdown in some sectors of commercial property, 'but at the top end, there is probably more growth to come'.
However, the prospect of Middle Eastern takeovers of large, listed UK companies remains the big talking point in the Square Mile. The spotlight is on supermarket group J Sainsbury, where Delta Two, a Qatari investment group, has acquired a 25 per cent stake, sparking speculation that it could mount a bid.
UK corporate scalps
· Corus, formerly British Steel, sold to Tata of India in 2007 for £6.7bn, after it beat off rival bidder CSN of Brazil
· Hanson, the building materials group, bought by Heidelberg Cement of Germany in 2007 for £8bn
· Scottish Power, sold to Iberdrola of Spain in 2006 for £11.6bn
· P&O, bought by Dubai Ports World for £3.9bn in 2006, defeating rival bidder Temasek of Singapore
· BOC, industrial gases group, sold to Linde of Germany in 2006 for £8.2bn
· 02, the mobile phone operator, went to Telefonica of Spain in 2005 for £17.7bn
· Manchester United, bought by the US's Glazer family, backed by JP Morgan bank, in 2005 for £800m
· PowerGen, electricity group, sold to Eon of Germany for £5bn in 2002
· Blue Circle Industries, the cement maker, was taken over by Lafarge of France in 2001 for £3bn
· Thames Water was sold first to RWE of Germany in 2000 for £4.3bn, then to Macquarie of Australia in 2007, for £8bn