14th Dec 2015 11:17
LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Royal Dutch Shell said it expects around 3.0% of the combined workforce of it and BG Group will be cut following the completion of the GBP47.0 million merger of the two. The news came after Shell confirmed the Chinese Ministry of Commerce gave its unconditional clearance for the deal, adding to the approvals the pair already received in Brazil, the European Union and Australia. The Chinese clearance is the final pre-conditional approval required for the deal. Shell also then laid out its restructuring plans for the merger to back its estimate of USD3.5 billion in annual synergies to be achieved. Shell said it expects to cut around 2,800 jobs globally across the combined company. These would be in addition to the 7,500 jobs Shell is already planning to cut within its own operations.
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AstraZeneca is in advanced talks to acquire closely-held biotech company Acerta Pharma for more than USD5 billion, the Wall Street Journal reported Friday, citing people familiar with the matter. According to the WSJ report, the two companies plan to announce a deal in December. Acerta does not currently have any drugs on the market, though its lead cancer compound, acalabrutinib, is said to have shown promise in early clinical trials.
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The UK government is consideration nationalising Rolls-Royce Holdings's nuclear submarine business, which provides propulsion for the UK's Trident deterrent, the Financial Times reported. The report said the UK may also decide to merge all or part of Rolls-Royce with BAE Systems, the UK's biggest defence group. The UK prime Minister David Cameron's office has had plans drawn up to protect UK interests as Rolls-Royce seeks to recover from five profit warnings in less than two years. The officials at Cameron's office are concerned that Rolls-Royce's management has no substantial experience of defending against hostile takeovers, the report said, citing people familiar with the matter.
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Meanwhile, a split has emerged among shareholders in Rolls-Royce, the Sunday Telegraph reported, after another investor expressed unease about the attempt by activist investor ValueAct to get a seat on the engine-maker's board. A major Rolls-Royce investor, unnamed, told the paper that while it would accept a decision by Rolls-Royce to grant ValueAct a seat on the company's board, it did not believe the activist was focused on improving the growth prospects of the company.
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Prosecutors in the US are threatening to punish banks for failing to report suspicious activity on accounts linked to FIFA, world football's governing body, as part of the sprawling corruption probe into the group, according to the Financial Times. People familiar with the case told the FT a series of banks, including HSBC Holdings and Standard Chartered, are holding private talks with prosecutors about what they knew and when as part of the FIFA probe. All the banks involved held accounts for FIFA or FIFA-connected entities and individuals, or which were used as part of money transfers.
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A string of British universities have stopped buying Pearson's teaching materials in a row over charges for ebooks, The Telegraph reported, citing publishing industry sources. According to the report, some universities including Imperial College London have sought to purge all Pearson materials from their courses. Pearson's UK higher education unit told universities in August that it would bring in sharp price rices on library purchases of their ebooks, resulting in some library bodies to write to Pearson chief executive John Fallon to appeal for a reverse in policy.
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Diageo said it has appointed its Guinness Nigeria subsidiary as its exclusive spirits distributor. Guinness Nigeria, in which Diageo holds a 54.3% stake, will become the exclusive distributor of Diageo's international premium spirit brands from January 1.
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Anheuser-Busch InBev said it is planning to secure a listing on the Johannesburg Stock Exchange in January, part of the measures being taken to show its commitment to the South African market as it progresses its takeover of SABMiller. AB InBev said it will list in South Africa in mid-January and has already secured approval for a secondary listing in the country.
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WPP said it has agreed to merge its Australian and New Zealand businesses with STW Communications Group, and increase its shareholding to 61.5% from 23.6%. STW is an Australian Securities Exchange-listed marketing and communications group. WPP will sell its Australian and New Zealand businesses to STW for AUD512 million, through the issue of STW shares at a price of AUD0.915, and a shareholder loan. As a result, WPP will become the majority shareholder of the enlarged company with a 61.5% interest, and STW will be renamed to align it with WPP.
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RPC Group launched a fully underwritten rights issue to raise GBP232.6 million to help fund the acquisition of Global Closure Systems from private equity firm PAI Partners, in a move to strengthen the packaging maker's position in Europe and beyond. RPC, which supplies rigid plastics packaging products and plastic containers, is acquiring the plastic closures and dispensing systems specialist for an enterprise value of EUR650.0 million, equivalent to about GBP470.0 million, on a cash-free, debt-free basis. The cash deal will be funded through a combination of debt and RPC equity, in the form of the one-for-five rights issue, with up to 50.6 million new shares to be issued at 460.0 pence each. RPC shares closed at 764.00p on Friday. The debt component of the financing arrangements means that RPC's revolving credit facility has been increased to GBP770.0 million from GBP490.0 million.----------
Man Group said the potential appointment of Lord Livingston as the successor to Chairman Jon Aisbitt is subject to regulatory review. The hedge fund investment manager said in May that Aisbitt planned to step down from his role following the company's annual general meeting of shareholders in May 2016. Man Group's confirmation of the potential appointment of Lord Livingston, the former trade minister and BT Group chief executive, followed a Sky News report which said he was set to become chairman of the group.
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Carillion said its The Hospital Co (Sandwell) joint venture has reached financial close on the Midland Metropolitan Hospital public-private partnership project. The joint venture was named preferred bidder for the contract in August and will now handle the construction of a new hospital offering 683 beds and 13 operating theatre suites in Birmingham. The contract will be worth GBP430.0 million for the construction and support services to be provided by the joint venture and Carillion will invest GBP13.0 million in equity in the project.
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Oil services company Petrofac said it has secured contracts worth around USD400.0 million covering work in the UK Continental Shelf. The company said it has secured a two-year contract extension from Centrica to continue providing services for the company's 8A platform in the Rough field. That extension will start in January. Petrofac has also won a contract with UK-listed oil and gas explorer EnQuest, which will see it provide services to the Kittiwake platform, including engineering modification work.
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MARKETS
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UK indices were trading higher as the FTSE 100 moved off the late-September lows it touched on Friday, with South Africa-exposed stocks rebounding after South African President Jacob Zuma re-appointed Pravin Gordhan as finance minister. Oil hit a fresh seven-year low of USD37.25 a barrel. Wall Street was pointed to a higher open.
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FTSE 100: up 0.6% at 5,988.52
FTSE 250: up 0.3% at 16,920.47
AIM ALL-SHARE: down 0.3% at 722.96
GBP: down at USD1.5165 (USD1.5214)
EUR: soft at USD1.0956 (USD1.0992)
GOLD: down at USD1,066.70 per ounce (USD1,075.62)
OIL (Brent): down at USD37.44 a barrel (USD38.18)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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China's industrial production and retail sales data released over the weekend signalled that economic momentum is picking up in the fourth quarter. Figures from the National Bureau of Statistics showed that industrial production growth accelerated to a 5-month high of 6.2% in November from 5.6% in October, exceeding the consensus estimate of 5.7%. Likewise, retail sales advanced 11.2% annually after rising 11% in the prior month and was better than the 11.1% growth forecast by economists. Fixed asset investment climbed 10.2% in the year-to-date period in November, the same rate of growth as seen in ten months to October.
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British house prices dropped for the second successive month in December, the latest house price balance from property tracking website Rightmove showed. The house price index fell 1.1% month-over-month in December, which was the smallest decrease since 2006. In November, prices had fallen 1.3%. "Whilst a fall is the norm at this time of year, this is December's best post-financial-crash performance, signalling another round of price rises in 2016," Miles Shipside, director of Rightmove, said. On an annual basis, house prices grew 7.4% in December, faster than the 6.2% increase in the preceding month.
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Eurozone industrial production recovered at a faster than expected pace in October on durable consumer goods output, official data showed. Industrial output advanced 0.6% on a monthly basis in October, reversing a 0.3% fall in September, Eurostat reported. This was the first increase in three months and exceeded a 0.3% rise forecast by economists.
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More than 190 countries created history in Paris on Saturday by agreeing on a plan to curb climate change and tackle global warming, ending two weeks of marathon negotiations. The deal requires the world's economies to take concrete steps to regulate the emission of gases linked to global warming. Key sticking points that were seen as obstructing a deal seem to have been resolved. The key points of the deal include a long term goal for limiting the rise in global temperatures to below 2 degrees Celsius, or 3.6 degrees Fahrenheit, with efforts to limit the temperature rise to 1.5 degree Celsius.
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The US House of Representatives passed an extension of a temporary budget in place since October 1, and President Barack Obama immediately signed the measure before a Friday night deadline to keep the federal government running. Still haggling over a budget for the current fiscal year, which runs through September 2016, Congress extended the current measure until Wednesday.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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