This weeks news includes; EU reaches trade deal with Japan, Weetabix taken over by Post Holdings and True Religion files for bankruptcy protection.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- City A.M argues that with uncertainty on the rise, we shouldn’t take business confidence for granted.
- Business Insider looks at Goldman Sachs claims that Bitcoin could see a big drop then surge to almost $4,000.
- Bloomberg explains how Didi drove Uber out of China.
- The Independent claims that people are becoming more optimistic about the pound.
1. EU AND JAPAN AGREE ON TRADE DEAL
The European Union and Japan have reached a preliminary agreement, paving the way for a working free trade deal. There are still many details still to be finalised and it is likely to take many years to implement a fully working deal but this deal marks the beginning of the process.
The two trade aspects that are fundamental to the deal are Japanese cars into the EU and EU farming goods into Japan.
The EU as a whole currently has a population of over 500 million while Japan has a population of is the world’s third-largest economy and is the country is Europe’s seventh biggest export market.
Read more about the deal on BBC News.
2. FINANCIAL SERVICES BREXIT EXODUS
Deutsche Bank
The German financial services giant Deutsche Bank has revealed that it will be moving substantial parts of its investment banking and trading assets to its base in Frankfurt. It is likely that this shift would be implemented within the next 18 months. With the exact nature of Brexit deal completely unclear final details of the move are still uncertain.
Bloomberg looks further at the move.
Blackrock
The world’s largest asset manager Black has also announced that it will be moving operations out of the UK after Brexit. It has shortlisted a number of the countries such as Ireland, France and Germany to relocate its EU base. Blackrock currently has roughly £4.2 trillion of assets under management.
The Independent looks at Blackrock’s move.
As the 2 year deadline approaches, officially marking the UK’s departure from the European Union it is likely that many other major financial service companies could follow suit in the coming weeks and months, if they haven’t already. Nomura, Stand Chartered and Barclays have also announced plans to relocate services.
3. WORLDPAY TO MERGE WITH RIVAL VANTIV
Worldpay has agreed terms for a £7.7 billion takeover by US rival Vantiv. A preliminary agreement of a potential merger was announced on Wednesday but there are many more details still to be finalised.
Worldpay was founded in 1989 and currently processes roughly 40% of all UK store checkout card transactions. The payment processing sector is in a period of notable growth as contactless card payments become ever more prevalent.
This is the latest in a string of UK firms acquired by foreign companies, sparking a debate whether reform is required for foreign takeover legislation to retain the UK’s reputation as a hub for the top tech firms.
To find out more about the deal and wider issues read the Guardian’s analysis.
4. POST HOLDINGS ACQUIRE WEETABIX
US consumer goods giant Post Holdings has acquired Northamptonshire based cereal maker Weetabix for £1.7 billion. Post Holdings, maker of Shredded Wheat and Bran Flakes cereals, purchased Weetabix from their owners; Shanghai based Bright Food and Baring Private Equity Asia. The deal was completed on Monday after first being announced in April.
Weetabix was founded in 1932 and produces its flagship product Weetabix but also Oatibix, Alpen and Weetos. It already had operations in North America, Germany and South Africa which made the deal even more attractive for Post Holdings.
The Independent looks further at the deal.
5. UK TECH SECTOR HITS RECORD INVESTMENT
The UK’s tech sector reached a record high, showing real signs of confidence in the UK tech sector despite Brexit uncertainty. Figures from London & Partners and Pitchbook show that in the first months of 2017 UK firms received £1.3 billion of funding from venture capital firms. £1.1 billion of this funding was received by London firms.
There was concern that Brexit could cause an immediate fall in UK investment in favour of London’s European counterparts such as Dublin, Paris, Stockholm and Berlin. London alone has had over £1.8 billion of investment since last year’s referendum and confidence in the UK tech sector appears stoic.
Read City A.M’s analysis for more information.
6. 5G TRIALS TO START IN 2018
5G mobile internet networks will be trialled in early 2018 after projects were granted government funding. These trials are part of the government objective to put the UK at the forefront of 5G technology. Experts at a number of top universities will share a £16 million fund as promised by Chancellor Philip Hammond.
The government estimates that the increased speeds of 5G could add £173 billion to the UK economy by 2030 as new smart technologies develop.
To find out more about the 5G trials read City A.M’s analysis.
7. TRUE RELIGION FILES FOR BANKRUPTCY PROTECTION
Designer denim retailer True Religion Apparel Inc announced that it has filed for bankruptcy protection under Chapter 11. It has listed assets and liabilities in the range of $100 million to $500 million.
The US based retailer has also agreed a restructuring deal with most of its lenders and aims to cut its debt by over $350 million. The business will continue to operate as usual but with the company struggling to find its way back into fashion, it is clear that the glory days of True Religion clothing have come to an end.
To find out more about the bankruptcy read Business Insider’s analysis.
8. TESCO GIVES SHAREHOLDERS COMPENSATION OVER 2014 SCANDAL
Tesco has given compensation to 10,000 of its shareholders over its accounting scandal in 2014. Shareholders wil receive 24.5p compensation per share averaging £400 per shareholder. This comes after the Financial Conduct Authority deemed shareholders who purchased Tesco’s securities on the basis of their overinflated financials were misled and should be compensated.
Three former employees were charged by the Serious Fraud Office after Tesco overstated its profits by over £300 million in 2014.
Tesco is the UK’s largest supermarket and only recently has it started recovering from this scandal and poor sales figures.
City A.M looks further at Tesco’s scandal.
9. LIDL SUED 2 WEEKS AFTER OPENING IN THE US
Lidl has been sued by US supermarket Kroger over an alleged trademark infringement. The German supermarket Lidl opened their first US stores just 2 weeks ago and it now faces its first hurdle.
Kroger claims that Lidl’s own brand named “Preferred Selection” is confusingly similar to Krogers own brand “Private Selection”. ThIs similarity could give Lidl an unfair market advantage as customers may reasonably believe that the two brands are linked.
Kroger has over 3000 stores and is one of the US’s largest supermarket chains. Lidl plans to have 100 US stores by the middle of 2018 and Lidl is expected to pose as tough competitor with its notoriously cheap prices.
Business Insider looks closer at the case.
10. SUBWAY TO OPEN 500 NEW STORES
Subway has announced that it will be looking for 500 new UK franchisees by 2020. The fast food retailer hopes to raise its number of UK and Ireland stores to 3000 and estimates this expansion would create 5000 jobs. Within the next 12 months It also hopes to launch an online ordering system.
Sky News looks at some of the external factors and market conditions Subway faces.
The BBC asks looks at the recent growth of Subway. Read more here “Subway: What’s behind the sandwich chain’s success?”
