This weeks news include; £14 billion MasterCard lawsuit revived, Standard Life & Aberdeen Asset Management complete £11 billion merger, Nestle sued by Atari, struggling Revolution Bars rejects merger offer
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:
- The Independent looks at Morgan Stanley’s claim that the Pound will be worth less than a euro by early 2018. In contrast, Bloomberg claims that the pound may finally start buying more Euros very soon.
- CNBC looks at a tech investor’s claim that “There’s no way Uber is worth anything near $70 billion.”
- Sky News looks at why Neflix could win the streaming war against Disney
- BBC News asks Can tech give us frictionless borders?
- Business Reporter looks at how the tech revolution is making insurance better for everyone.
1. UK GOVERNMENT ANNOUNCES BREXIT TRANSITION DEAL STRATEGY
The UK government has announced that it will be seeking a transitional period to provide certainty and aid businesses to adjust after the UK leaves the EU. The Brexit Secretary David Davis has stated however that any deal should not last any longer than 2 years.
This news came to the delight of many business leaders as it will provide some much needed clarity for our businesses but there is some concern that this could be the beginnings of the government attempting to remain in the EU “through the back door”. Some commentators in Europe however do not believe that this is feasible.
Sky News looks closer at the issue.
2. £14 BILLION MASTERCARD LAWSUIT REVIVED
An appeal has been lodged against the decision barring the £14 billion lawsuit against Mastercard from being brought to trial. The Competition Appeal Tribunal argued that the class action claim could not be brought to court because the level of damage suffered by each individual claimant could not be reasonably established.
46 million Mastercard consumers alleged that they were charged uncompetitve interchange fees over a 16 year period and over £14 billion in damages are being claimed, which would make it the largest legal claim in UK history.
Read the Guardian’s report for more information.
3. STANDARD LIFE MERGER COMPLETED
Standard Life and Aberdeen Asset Manager have now completed their merger in an £11 billion deal. The deal was initially agreed in March but has now been concluded and the new company Standard Life Aberdeen has been official created.
The company will have over £670 billion under management and will employ 9000 people. The company will however cut 800 jobs to help achieve its goal of £200 million in savings as part of its streamlining process.
Sky News reports on the deal.
4. PWC RECEIVES RECORD FINE FROM ACCOUNTANCY REGULATOR
PwC has been fined a record £5.1 million by the Financial Reporting Council over misconduct relating to its audit of RSM Tenon Group. RSM Tenon Group was a professional service firm but went into administration in 2013 and was liquidated. Further penalties were also given to a senior PwC audit partner.
This news comes as just another penalty in the long list of fines it has faced over the past year. PwC was fined in May 2017 over its audit of Connaught and the FRC also began a probe into PwC’s aduits of BT Group in June.
Read Bloomberg’s report for more information.
5. NESTLE SUED BY ATARI
Atari has sued Nestle for allegedly copying the design of one its popular video games “Breakout” in a recent Kit Kat advertising campaign. Breakout was similar to the game “Pong” and was created in 1976 and Atari claims that the similarity of Nestlé’s rendition was “plain and blatant” making it a clear IP infringement.
Nestlé’s advert is titled “Kit Kat: Breakout” and features workers playing a similar game during their lunch break. Nestle will defend itself against the lawsuit but it has also stated that the advert ran last year and it has no plans to rerun the advert.
6. GREGGS BAKERY PLANNING TO JOIN £4 BILLION CLASS ACTION
Greggs bakery has begun talks to join a £4 billion lawsuit against a group of truck makers who were found to have fixed prices. According to Sky News, Greggs is looking to join this claim which was brought forward by the Road Haulage Association (RHA) as it owns a large fleet of trucks and may be entitled to compensation.
Five truck makers were fined over £2.7 billion last year by the European Commission for fixing prices over a 14 year period. Over 650000 trucks were purchased from these manufacturers by UK customers and the RHA believes that’s claimants should be entitled to £6000 for each truck.
For more information, read Sky News’ report.
7. UK UNEMPLOYMENT FALLS TO 4.4%
The rate of unemployment has fallen to 4.4%, the lowest level in 42 years. Despite the positive unemployment figures weekly earnings grew by 2.1%, 0.5% less than the rate of inflation. Many analysts however expect that the rate of inflation will fall as the pound regains ground against other currencies.
Read BBC News’ analysis for more information.
8. REVOLUTION BARS REJECTS MERGER OFFER
Nightclub chain Revolution Bars has rejected a merger offer from its rival Deltic Group. Deltic owns 57 clubs including clubs such as; PRYZM, Bar & Beyond and Fiction. Revolution is already in talks for a £100 million takeover from Stonegate, the owner of Slug and Lettuce but Deltic believe it could offer a more attractive opportunity.
Revolution issued a profit warning in May after months of struggling sells. Revolution shares went up by 5% in response to the news of the rejected offer.
Business Reporter looks closer at the deal.
9. RBS TO CUT 900 JOBS
It has been revealed that The Royal Bank of Scotland is planning to cut 900 IT jobs by 2020. According to the Unite Union, RBS could cut roughly 40% of its permanent IT staff.
RBS has stated that these cuts have not however been confirmed but it would be in line with the bank’s general restructuring after its government bailout in 2008. In the last decade RBS’s workforce has been cut from 226,000 in 2007 to 77000. Unite claim there will be just 950 full-time IT state by 2020.
RBS has not had a good history with IT as its recent history has been peppered with a number of technical glitches and these issues may raise questions as to why jobs are being cut in such a crucial area.
BBC News analyses this further.
10. LOVEFILM SHUTS DOWN
It has been announced that the DVD rental service Lovefilm is, unsurprisingly, shutting down. Its user numbers have dwindled for years to the extent that its existence was barely known and its closing down mirrors its ill-fated counterparts like Blockbuster.
Lovefilm was acquired by Amazon in 2011 for £200 million and arguably helped Amazon develop its now hugely successful Amazon Prime Video.