Electric Business
A brief summary of business news to keep you informed on company start-ups, corporate downsizing and mergers and acquisitions. This service is free to access here or it can be emailed to you monthly. Just sign up.
Latest business news:
The Chancellor of the Exchequer, Alistair Darling, has announced that the individual personal tax allowance is to increase by £600 to £6035 for this financial year. The move is a response to the widespread criticism of the abolition of the 10p tax rate in the recent budget. The new changes mean that in September basic rate taxpayers will see a one-off increase in their monthly income of £60 and then an increase of £10 per month for the rest of the financial year. Higher rate taxpayers will be unaffected by the changes because the threshold at which an individual starts to pay tax at the higher rate is also reduced by £600. The tax changes will result in additional “red tape” for employers, who will have to update payroll software and PAYE codes in the middle of the financial year. more business news
Latest company mergers and acquisitions:
Hewlett-Packard is to purchase the IT services firm EDS for $13.9bn. Following the acquisition, HP intends to establish a new business group, to be branded EDS - an HP company. The combined entity will have an annual turnover of more than $38bn, 210,000 employees and provide IT outsourcing, business process outsourcing, applications, consulting and technology services in over 80 countries.
Cobham has agreed to purchase the radio frequency components and subsystems business of M/A-COM from Tyco Electronics for $380m.
British catering equipment manufacturer, Enodis, has agreed to be bought by the US industrial and engineering firm, Illinois Tool Works, for £1.03bn. The agreement trumps an earlier £948m offer for Enodis from another US engineering group, Manitowoc. The deal will create a global industry leader in the manufacture and marketing of food service equipment.
Saint-Gobain Building Distribution is to acquire the builders’ merchant, Gibbs and Dandy, for £43m. Gibbs & Dandy can trace its roots back to the nineteenth century and now has 11 branches across Bedfordshire, Berkshire, Cambridgeshire and Northamptonshire.
In a deal worth £1.1bn, Best Buy, the leading US consumer electronics retailer, is to acquire 50% of Carphone Warehouse's retail business. The deal includes 2,400 stores operating in nine European countries under the Carphone Warehouse and Phone House brands, as well as Carphone Warehouse's share of its existing relationships with Best Buy, the firm’s web and direct businesses, insurance operations, and airtime reselling business. Carphone Warehouse will retain 100% of its TalkTalk, AOL Broadband and Opal fixed-line telecoms businesses in the UK and will use the proceeds of the transaction to repay debt and invest in broadband customer growth and infrastructure.
Abu Dhabi National Exhibitions Company is to buy London International Exhibition Centre Holdings, the owner of ExCel London, for £178m. Situated alongside Canary Wharf and London City Airport, ExCel London is the host of the London Boat Show, the British International Motor Show, London Book Fair and the London International Wine & Spirits Fair.
Directorbank, the headhunting company that focuses on private equity firms, has acquired Hanson Green, the non-executive search & selection firm, for an undisclosed sum.
Hornby, the maker of model railways, is to buy Corgi International, best known for its model cars, for £8.3m. The purchase complements Hornby’s existing product range, which includes Scalextric racing cars, Airfix models and Humbrol paints.
PepsiCo has acquired the British vitamin water brand, V Water, for around £10m and has put in place an exclusive bottling agreement with Britvic who will manufacture, sell and distribute V Water products across the country.
Taylor Nelson Sofres plans to merge with its German counterpart GfK to form what would be the world’s second-largest market research group by revenue. The merged group would be renamed GfK-TNS with its global head office based in London and a German one in Nürnberg.
United Drug has acquired Universal Conference and Incentive Travel and Business Edge Solutions & Training for up to £14.15m.
Barclays Private Equity has funded a management buyout of A-Plan Insurance, the broker that operates from a network of high street branches.
Balfour Beatty’s specialist airport investment and development arm, Regional and City Airports, is to acquire 95% of Blackpool International Airport for £14m. Blackpool Council owns the remaining 5% of the airport, which is forecast to handle about half a million passengers in 2008.
Designed for companies that offer services and consultancy to organisations undergoing significant corporate change, M&A News offers you a fresh list, every month, of finance directors, HR directors, marketing directors and chief executives. All companies featured have been involved in M&A activity during the last month and are likely to be spending budget on consultants and advisers to deal with a raft of corporate issues thrown up by merging or acquiring new companies.
Price: £145.00
click here for Mergers and acquisitions 2006/7/8
More business news
Up to 730 jobs are at risk following Northern Foods’ decision to end a £45m contract to supply Marks & Spencer with ready meals from its Fenland Foods site in Grantham. In accordance with its strategy to only continue with parts of the business that “generate an adequate return”, the group plans to mothball the Fenland site which has been operating at break-even profitability. A representative of the GMB union says, "This tragic news takes the heart out of Grantham, the workers and their families, especially as there is very little alternative employment in the Grantham area.”
Thursday 15 May is National Work from Home Day. It is the third National Work from Home Day organised by Work Wise UK, a national not-for-profit initiative that promotes “smarter” working practices, such as flexible, remote and mobile working. The organisers hope that five million people will spend 15 May working from home.
Google has changed its rules for paid search to allow companies to bid on their rivals’ trademarked terms. For instance, this would allow Mercedes to bid on the search term BMW, with the person searching for BMW seeing an advert for Mercedes instead. The move has led to criticism from various leading brands including Auto Trader, Lastminute.com and Tesco, who are worried that they will have to pay millions of pounds a year to Google to protect their brands and keep them at the top of the search engine’s listings. Lastminute’s chief executive has threatened Google with legal action over the move. At midday on 7 May the following companies were bidding on the Lastminute.com name: Ebookers.com, Netflights.com, Directline Holidays, Ibis Hotels and GTAHotels.com.
Sound Control, the UK’s largest musical instrument retailer, has been placed into administration. The company operated from 26 stores across the country, under the brand names Sound Control, Media Tools, Turnkey and Soho Sound House, and had a turnover of £50m. The administrators have closed 10 of the group’s outlets and ended its telesales and internet sales activities, making 163 of the company’s 338 employees redundant with immediate effect. The Dunfermline-headquartered company’s directors had been trying to sell the business which was failing as a result of increased competition from the internet.
As part of its efforts to build the Aviva name as a recognised global force in financial services, Aviva is to stop using the 200-year-old Norwich Union insurance brand in the UK. Formed from the merger of Norwich Union and CGU in 2000, the group already trades as Aviva in over 20 markets across Europe, North America and Asia Pacific and now generates 60 per cent of its business outside the UK. Aviva’s chief executive, Andrew Moss, says, "By investing in a single name, we will amplify the global impact of our advertising and sponsorship spend.” The company will also abandon the Hibernian brand in Ireland but has decided to retain the specialist motoring services brand, RAC.
Royal Bank of Scotland has launched the biggest fundraising exercise in British business history with the sale of an additional £12bn worth of shares to existing shareholders. Britain’s biggest banking group has also put its insurance businesses, which include Direct Line, Churchill Insurance and Privilege, up for sale with a price tag of £4bn. The move, which has been necessitated by the global credit crunch and the bank’s recent £49bn acquisition of ABN Amro, is an embarrassing U-turn for the group chief executive of RBS, Sir Fred Goodwin, coming just three months after he had denied that a rights issue would take place. HBOS has announced that it is planning a similar move to raise £4bn of additional capital.
Logica is to cut 1,300 jobs, 500 of which will be in the UK, following a review of the business by the IT services firm’s new chief executive, Andy Green. The company expects the restructuring to save it around £80m a year from 2010 through streamlining the organisational structure, moving activities offshore, reducing property costs and rationalising IT and back office functions. Logica plans to use the cost savings to fund investment in its sales and marketing capability, increase investment in consulting and focus on high growth areas, particularly outsourcing. Green says, ‘I am confident that this plan will allow us to outperform the market and revitalise Logica, delivering sustained value for shareholders, customers and employees alike.’
Profits at sportswear retailer JJB Sports fell 28.2% in 2007/8. In common with its rivals, JJB relies heavily on the sale of replica England football kits, and sales of the new red England away shirt have been poor following the failure of the team to qualify for this summer’s Euro 2008 finals in Switzerland and Austria. The company is to close 72 unprofitable stores with the loss of 800 jobs.
Ethel Austin has been placed into administration. The value clothing retailer, which dates back to 1934, has 300 stores throughout the UK and employs around 2,800 staff.
Danish furniture retailer JYSK has opened its first two UK stores in Mansfield and Lincoln. The retailer operates 1,350 stores in 31 countries, employing 12,000 people and has big plans for what it calls “a long-term conquering of Great Britain, where there is assessed to be room for 500 stores”. In Danish, JYSK means that a person comes from the region of Denmark called Jutland and also signifies modesty, thoroughness and honesty.
Ofwat, the economic regulator of water companies, is to fine Severn Trent Water £35.8m for deliberately providing it with false information and providing a poor service to its customers. Ofwat says that Severn Trent Water’s customers received a service that was far below what the company had reported it was delivering and that its bills were higher than they should have been because the company’s performance fell below prescribed standards. Severn Trent accepts that its former management ‘was overly bureaucratic and lacked sufficient controls and procedures’ and adds that ‘those who were responsible for the customer relations mistakes are no longer with Severn Trent’.
Tesco is suing The Guardian and its editor for libel and malicious falsehood following articles in the newspaper claiming that Britain’s largest retailer used offshore joint venture partnerships to avoid paying up to £1bn of UK corporation tax on the sale of its UK properties. Tesco says that it told The Guardian on several occasions that the allegations were untrue and requested an apology, and that it is taking legal action because it cannot allow its reputation to be ‘so seriously attacked with such wilful disregard for the truth’. The Guardian has responded by accusing Tesco of ‘bullying tactics’ and trying to ‘close down the debate and discourage others from looking too closely’.