The week’s news included; HSBC fined £64m for AML failures, Warner Music buys 300 Entertainment, the label behind Megan Thee Stallion & Mary J. Blige, M&S sues Aldi for another IP infringement.
This is the last top 10 of 2021, thank you all for your support this year, see you in 2022!
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
Opinion articles of the week:
- City A.M. – Is the party over for Tesla shares after their recent losses?
- Music Business Worldwide– Could Spotify face $100m plus lawsuits over its comedy album faux pas?
- BBC News – Will Omicron stall the airline sector recovery in 2022?
- City A.M. – Believe it or not, there are still reasons to be cheerful for 2022
- Sky News – The Bank of England has raised interest rates: What will it mean for you?
1. HSBC FINED FOR AML FAILURES
HSBC has been fined £64 million for serious weaknesses in its anti-money laundering processes. The Financial Conduct Authority found that between 2010 and 2018, HSBC failed to consider a number of money laundering risks and its assessments for suspicious transactions were not carried quickly enough over the eight-year period. HSBC has since undertaken a supervised remediation programme to address failures in its anti-money laundering processes. The bank did not dispute the FCA’s findings and saw an initial fine of £91.4 million reduced by 30%. The FCA has been keen to clamp down on poor anti-money laundering practices and also recently issued a huge £265 million fine to Natwest.
2. NATIONAL EXPRESS-STAGECOACH MERGER
Coach travel rivals National Express and Stagecoach have announced plans to merge by late 2022. The combined company would be worth an estimated £1.9 billion with over 40,000 vehicles and 70,000 staff. Around £45 million of savings are expected to be realised through the merger. National Express would own 75% of the company while Stagecoach would hold just 25%. The deal is subject to regulatory approval and will undoubtedly face a huge hurdle to achieve this due to the companies’ close rivalry. In anticipation of the deal, Stagecoach offloaded three subsidiaries including Megabus, who is a close competitor of National Express.
3. UK INTEREST RATE HIKE
The Bank of England’s Monetary Policy Committee has increased interest rates from their record low of 0.1% up to 0.25%. The news came against a backdrop of rapidly rising inflation which hit 5.1% last month. The MPC voted 8-1 in favour of increasing rates. The decision to increase interest rates is designed to combat inflationary pressures and bring inflation down to the Bank’s 2% target. Many analysts have warned however, that the rise in inflation has been driven by rising supply costs rather than excess demand so increasing interest rates may not tackle inflation. Wholesale energy costs have increased by over 400% since July 2020 and have been a driving factor of inflation across the world. There are signs that the Omicron variant will cause a steep decrease in demand and take a heavy toll on the economy. Whether the interest rate hike will help stem inflation remains to be seen.
4. WARNER MUSIC AGREES TO BUY 300 ENTERTAINMENT
Warner Music has agreed to buy 300 Entertainment, the record label behind artists including Mary J. Blige and Megan Thee Stallion, for roughly $400 million. The New York based label was founded in 2012 by Kevin Liles and his former Warner Music and Def Jam colleague, Lyor Cohen. The company has grown exponentially and secured a number of big industry names such as Mary J. Blige, Young Thug, Megan Thee Stallion and Migos. Under the deal with Warner, 300 “will retain its independent identity,” and its New York headquarters. The full details of the acquisition were not disclosed but industry experts confirmed the $400 million purchase price estimate was accurate.
5. UK STRIKES TRADE DEAL WITH AUSTRALIA
The UK has formally agreed a trade deal with Australia, marking the first post-Brexit trade deal negotiated “from scratch”. The deal was agreed in principle back in June but was finally signed last week. This deal will eliminate tariffs on all UK exports to Australia and remove many restrictions for professionals and service suppliers to work in Australia. Over £10 billion of additional trade between the two nations is expected to be created and it will provide a welcome economic boost. 99% of exports from Australia to the UK will also see tariffs removed. There are concerns that the deal could harm UK farmers as they could be undercut by cheaper Australian imports. Ministers have sought to allay these concerns by highlighting that there are a number of safeguards in place. Find out more about the trade deal on the UK government website.
6. M&S SUES ALDI (AGAIN)
Marks & Spencer has sued Aldi (again) for allegedly infringing upon its protected design. This time Aldi allegedly copied M&S’s “Light Up” Christmas gin with its own “The Infusionist” gin. M&S alleges that Aldi’s gin is “strikingly similar” to its own, bearing the same bottle design along with gold flakes in the liquid, which breaches its protected design and could confuse consumers. Consequently, M&S is seeking an injunction against Aldi to oblige it to surrender or destroy its stock and pay damages and costs. Aldi has rejected M&S’s claims and will not stop selling the product. M&S already entered a legal battle with Aldi earlier this year over its “Cuthbert the Caterpillar” birthday cake. This case is currently ongoing. See our article on the issue.
7. LADBIBLE IPO
LadBible (LBG Media) made its debut on the London Stock Exchange last week and reached a market value of £411 million. LBG Media owns brands including SportBible, UNILAD and GamingBible. Founder, Alexander Solomou received £50 million from the IPO and saw his net worth soar to over £200 million. LBG Media listed on the LSE’s Alternaitve Investment Market. The company has posted revenue of £23 million for the first half of the year. LadBible’s US competitor Buzzfeed went public via a SPAC merger earlier this month but has since seen its stock price plummet nearly 40% in the first week of listing.
8. AMAZON STEPS INTO BNPL
Amazon UK has entered the buy-now-pay-later (BNPL) space after striking a deal with Barclays. The e-commerce giant will launch a new product called “Instalments” allowing customers to spread the costs of purchases over 3 to 48 months. Only Amazon purchases over £100 will be eligible for BNPL. An annual interest rate of 10.9% will be applied to purchases. The product was already operating in Germany since last year. The BNPL sphere has been growing rapidly, with over 5 million UK customers using BNPL since 2020. A growing number of companies including PayPal and Apple have launched their own products. Unlike Amazon & Barclays offering, the majority of BNPL providers offer an interest free product although these typically have shorter schedules.
9. REDDIT FILES FOR IPO
Social media site Reddit has confidentially filed for an IPO and could reach a huge $15 billion valuation. The website operates like a message board and allows users to vote, comment on and share posts. It generates most revenue from online adverts and has 52 million daily active users. Reddit posted $100 million in advertising revenue in Q2 of this year. Reddit users were the primary driver of the GameStop and AMC short seller squeeze earlier this year (see previous top 10) and this boosted the platform’s popularity. In August, Reddit’s private funding round valued it at $10 billion.
10. TFL FUNDING DEAL
Transport for London has struck a crucial funding deal with the government, allowing the network to continue to operate as normal until February 2022. TFL has been facing severe financial difficulties due to the pandemic as since 2019 it relies almost entirely on passenger fares and advertising. The network had warned that an entire tube line would need to close if additional funding was not provided. Additionally, London Mayor, Sadiq Khan, is reportedly planning to introduce an increase in council tax to help alleviate some of TFL’s financial difficulties. He has however, warned that unless the government provides long term funding solutions these financial challenges will only get worse.
