Latest deals and developments
GKN, a FTSE-100 engineering group, has been threatened with a hostile takeover from Melrose Industries – a company whose model consists of buying, improving and then selling flagging businesses. The board however, has resisted the takeover, insisting the offer is not generous enough and that it has its own plans for structural reform
UK based private-sector infrastructure provider Carillion collapsed last week – sending thousands of government contracts into doubt. The collapse has raised serious questions as to the efficiency of Private Finance Initiatives (PFIs) which successive governments have used to in provide services since the 1990s. Concerns have been raised about the monopoly power afforded to the few companies which bid for such contracts – who often offer a low price initially only to ramp up costs further down the line
The big four US retail banks saw a 20% jump in losses on credit-card debt – amounting to a $12.5 billion hit. This has raised worries as to the financial health of the American middle-class. As well as harming the balance sheets of US financial institutions, such a rise indicates potential weakness in consumer spending in the months to come. This could potentially undermine the so far robust US economy
Momentum has gathered around addressing the world’s largest tech giants – Alphabet, Apple and Amazon. Economists have been particularly concerned about the large swathes of personal data that these companies hoard – and have subsequently supported efforts to make data more accessible so as to elevate competitiveness in the market.
US agriculture business ADM has begun talks with rival Bunge about a takeover that would combine two of the world’s four largest grain trading houses. This comes after Glencore agreed a standstill on merger talks with Bunge in February. Anti-trust authorities however, are likely to take a tough approach – potentially demanding asset divestment if the merger is to go through.