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Santander is to buy all 311 Royal Bank of Scotland branches in England and Wales and seven NatWest branches in Scotland. The deal includes 5,000 staff, 40 SME banking centres, 400 relationship managers, 40 SME banking centres and four corporate banking centres, and gives Santander around 1.8 million new retail customers, 244,000 new SME customers and 1,200 new mid-corporate customers. RBS, which is largely owned by the UK government, was forced to dispose of the branches under European Union rules on state aid. Santander already owns the Abbey, Alliance & Leicester and Bradford & Bingley brands and the chief executive of the consumer group Which?, Peter Vicary-Smith, was scathing about claims that the sale would be good for consumers, saying: “A huge opportunity has been missed to inject some much-needed competition into retail banking. Simply moving a large number of customers from one big bank to another isn’t going to improve the market for consumers. Santander consistently performs poorly in our satisfaction surveys for current and savings accounts, so today’s news doesn’t bode well for the RBS customers whose accounts are being transferred”.
A strike has been averted at BAA’s six UK airports following an agreement between the company and the Unite union on an improved pay deal, which BAA says is “fair to staff but which also reflects the difficult economic climate”.
Metro Bank has opened its first UK branch in Holborn, London. It is the first new bank to be granted a full-service banking licence for more than 100 years. Open seven days a week, the bank will focus on personalised customer service and is based on the model created by Metro Bank's founder, Vernon W. Hill, whose US banking business has grown from one office in Philadelphia in 1973 to having $50bn in assets and 500 offices throughout the east coast of America. Further branches are to open in Earl's Court, Fulham and Borehamwood over the coming weeks, with a wider network planned.
In the wake of the Deepwater Horizon disaster that killed 11 people, caused extensive environmental damage and lost the company billions of pounds, BP has parted company with its chief executive Tony Hayward by mutual consent. BP’s chairman Carl-Henric Svanberg says, “BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board”. When he steps down on 1 October Hayward will receive a year's salary of £1.045m in lieu of notice. He will be succeeded by Robert Dudley, an American who joined BP from Amoco after the merger of the two companies in 1998.
Her Majesty’s Revenue and Customs’ challenge of the validity of Portsmouth Football Club’s Company Voluntary Agreement has failed. HMRC wanted the CVA blocked as it claimed it was unfairly weighted towards football creditors ahead of non-football creditors like themselves. HMRC says it will not challenge the ruling. With no buyer forthcoming, the likely outcome is that the Championship club will remain in the ownership of Hong Kong-based businessman Balram Chainrai and shortly exit administration.
The Department for Business, Innovation and Skills has granted the higher education provider BPP university college status. This is the first time a private institution has been awarded the University College title since Buckingham University College, now the University of Buckingham, was created in 1976. BPP University College offers degrees at undergraduate and postgraduate level in business and law and becomes the only private university college in the UK.
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Latest company mergers and acquisitions:
LDC, the private equity arm of Lloyd’s Banking Group, has made a further addition to its business portfolio with the acquisition of the BSkyB-owned B2B telecommunications provider Easynet Global Services.
Digital Barriers, a specialist provider of homeland security solutions, has acquired Overtis Group for £3.2m. Overtis offers user activity management software to monitor employee actions within an organisation.
Teaching Personnel, a provider of teaching and supply staff, has completed a £45m management buy-out backed by Graphite Capital.
Meridian Bioscience, a US-based life sciences company, has acquired the UK firm Bioline for $23.3m.
The London-based investment company Salamanca Capital Investments has acquired Barcelona Marina, also known as Marina Port Vell, in Barcelona. In partnership with the Spanish Port Authority, Salamanca plans to develop the Marina into a prime destination for privately owned super yachts.
The industrial valve manufacturer Valvitalia has acquired the UK-based company Broady Flow Control.
Fairpoint Group, a consumer debt solutions business, has acquired the price comparison site Moneyextra.com with the aim of offering a wider range of financial services to its customers. In particular, Moneyextra will provide money saving options on products such as loans, mortgages and credit cards.
IDOX, a software supplier to the public sector, is to acquire Computershare Electoral Management Services, a provider of software for local authorities, for up to £4.4m. Computershare, which currently trades as Strand Business Systems, will be renamed Strand Electoral Management Services.
The international marketing communications company Aegis Group is to acquire Mitchell Communication Group, based in Australia, for £207m.
The UK-based companies Graham Engineering and Graham Spares and Service, specialists in the manufacture of label and shrink sleeving machines, have been acquired by the US firm Accraply.
The international biopharmaceutical company Shire is to acquire the Belgian firm Movetis for €428m.
Royal Bank of Scotland Group has sold 311 RBS branches and seven NatWest branches to Santander UK for £350m.
Advent International and Bain Capital have acquired RBS WorldPay, the online payment processing subsidiary of Royal Bank of Scotland Group, for £2.03 billion. RBS will retain a 19.9% stake in the company.
The American retailer Men’s Wearhouse has acquired the UK-based business Dimensions Clothing and certain assets of Alexandra, suppliers of corporate clothing and uniforms, for £61m.
YouGov, a research company that specialises in public opinion and consumer behaviour, has acquired the US-based marketing and research consultancy Harrison Group.
Chemring, a manufacturer of products for the defence industry, is to acquire the contract engineering company Roke Manor Research for £55m. The acquisition will particularly enhance Chemring’s technology offering in the homeland security, global countermeasures and counter-terrorist markets.
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.
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Fairfield Energy has postponed its proposed flotation on the London Stock Exchange “in the light of market conditions”. The British oil and gas exploration company was hoping to raise £330m by listing its shares but was unable to find sufficient numbers of interested investors. Earlier this year New Look and Merlin Entertainments were also forced to cancel initial public offerings.
The corporate clothing firm Alexandra plc has gone into administration following an announcement on 9 July that the company no longer had sufficient funding to enable it to continue to trade. Alexandra employs 484 people at UK sites including Bristol, Swindon, Edinburgh and Glasgow. The administrators hope to sell the business.
The Communication Workers Union has been forced to cancel its ballot on strike action over pay by BT workers following legal advice that “technical breaches” could see the vote overturned in court. The union and BT are to meet for further negotiations but a new strike ballot is planned if the two sides fail to reach an agreement.
Amazon.co.uk has extended the range of products it offers with the launch of its grocery store. Among the new products available from the online store will be nappies, washing powder, pasta, rice, herbs, cooking oils and spices, as well as a range of organic, kosher, gluten-free, sugar-free and vegan items. All of Amazon’s usual delivery options are available for the new products.
Chancellor of the Exchequer, George Osborne, has held his first budget. Among the changes that affect businesses are:
VAT is to go up to 20% from 17.5% from 4 January 2011.
The lifetime limit on entrepreneurs' capital gains tax relief is increased from £2M to £5M.
The statutory retirement age of 65 will be phased out from April 2011.
Corporation tax for large companies will be reduced by 1% to 27% for 2011/12. There will be further annual reductions of 1% each year until 2014 when the rate will become 24%. For companies with profits of less than £300,000, the rate will be reduced by 1% to 20% from 2011.
There will be a £2bn a year levy on the banking industry.
Tax credits promised to the video gaming industry by the Labour government have been cancelled.
Regional Development Agencies will be scrapped.
Various assets will be sold off, including the national student loan book, The Tote, air traffic control and the high speed rail link from London to the Channel Tunnel.
New businesses outside London and the South East will be exempt from paying national insurance for their first ten employees.
The employers’ national insurance threshold will rise by £21 a week from April 2011.
Ofcom has set out its proposed rules for the introduction of product placement on UK television. The communications regulator plans to permit product placement in films, dramas, television series, sports programmes and light entertainment programmes. However, it will be prohibited in children's, religious, current affairs and consumer affairs programmes. The placement of tobacco, alcohol, unhealthy foods, medicines and gambling products will not be permitted.
The owner of the brands Currys, Dixons, PC World, CurrysDigital and The TechGuys, is to abandon the name it adopted five years ago, DSG International, and is to change its name back to Dixons Retail.
Rupert Murdoch’s News Corporation is continuing its strategy of reducing its freely available content by removing its popular Sky Sports News TV channel from Freeview and making it only available to paying subscribers. Last month the company moved its Times and Sunday Times websites behind a paywall. News Corporation is in negotiations to take full control of BSkyB, in which it currently owns a 39.1% stake.
The Financial Services Authority has fined JP Morgan Securities £33.32m for failing to adequately protect its clients’ money. Under the FSA’s rules, firms are required to keep client money in separate accounts from the firm's money so that in the event of the firm's insolvency the clients’ money is not at risk of loss. However for seven years between 2002 and 2009 JPMSL failed to do this. The fine is the largest ever imposed by the FSA.
The US government has told BP that it must fund immediately the construction of six sections of barrier islands off the coast of the state of Louisiana which it hopes will stop the oil slick that is leaking from its Deepwater Horizon drilling rig in the Gulf of Mexico from entering Louisiana's marshlands. The company has set aside $435m for the project. BP has already provided $170 million to Louisiana, Alabama, Mississippi and Florida to help with their response costs and help promote their tourism to the region. The company has also paid $43 million in compensation to people and companies affected by the spill.
Facebook has bowed to public pressure and introduced new privacy settings that will allow its 500m users to more easily control who has access to the content they post. In addition users will be able to block all third-party applications and websites from accessing their accounts and personal data.
Ocado, the online grocery delivery service, has extended its exclusive agreement with Waitrose until 2020. The new deal means that Ocado is not allowed to strike similar deals with rival retailers such as Marks & Spencer, but allows Waitrose’s own home delivery service to compete directly with Ocado throughout the UK. Ocado plans to float on the London Stock Exchange later this year.
Prudential’s $35.5bn bid to buy AIA Group has fallen through, leading to calls from shareholders and commentators for Prudential’s chief executive and chairman to resign. Prudential says that the unsuccessful bid cost it £450m.
Paramount Restaurants is to sell its Caffe Uno, Il Bertorelli and Livebait chains in order to concentrate on its two core French brands, Chez Gerard and Brasserie Gerard. The company’s chairman, Sir David Michels, and chief executive, Mark Phillips, are to leave the business.
The leading US electronics goods retailer Best Buy has opened its first UK store in Thurrock in Essex. The 45,000 sq ft store’s products range from flat screen TVs to electric cars. Further stores are due to open in Aintree, Croydon, Merry Hill and Southampton later in the year, as part of a joint venture with Carphone Warehouse.
Her Majesty’s Revenue & Customs (HMRC) says that the introduction of its new National Insurance and PAYE Service number system has resulted in thousands of incorrect tax coding notices being sent out. HMRC is urging people who have received notices to check their tax code and if they think that it is wrong (or they don’t understand it) to contact their tax office or call 0845 3000 627.
The vast salaries of some FTSE chief executives are once more in the spotlight following the revelation that Bart Becht, the head of Reckitt Benckiser, was paid £90m last year. The chief executive of BG Group, Frank Chapman, also made headlines when the natural gas company’s recently published annual report disclosed that he earned £28m in pay, bonuses and share options in 2009. According to Income Data Services, the chief executives of the UK’s 100 largest companies earned 81 times the average pay of all full-time workers in 2009, up from 47 times the average wage in 2000. In a speech Richard Lambert, director general of the CBI, warned that excessive pay for the few at the top risked denting the reputation of business as well as trust in its role, saying , “If leaders of big companies seem to occupy a different galaxy from the rest of the community, they risk being treated as aliens.”
A report by Ofcom shows that 91.4 per cent of UK homes now have digital TV and that 23 million high definition-ready televisions had been sold by the end of 2009. The report also says that 21% of Sky subscribers and 23% of Virgin Media’s now receive HD broadcasts. Last month, 4.5 million homes received Freeview HD coverage for the first time, including the cities of Birmingham, Leeds and Cardiff.
AOL is to sell or close Bebo, the social networking site that it bought for $850m two years ago. Bebo has struggled to compete with rivals such as Facebook and AOL says that it will shut down the site for good unless a buyer comes forward by the end of May.
The infrastructure and facilities management company Jarvis has fallen into administration. Jarvis gained notoriety in 2002 following the fatal Potters Bar train crash, which was caused by faulty points that were maintained by the company. In the middle of that decade Jarvis built up a high level of debt which it was unable to service following the global financial downturn. The administrator says that around 1,100 workers are to be made redundant, while the future of the remaining 900 employees depends on a buyer being found for the business.
DSG International says that its megastore and combined Currys/PC World formats are proving popular with customers and has identified 70 locations in which to extend this format. In all, 25 new megastores will open during the next year, taking the total in the UK to 33, while the company also plans to develop 60 combined two-in-one Currys/PC World stores,12 Currys and PC World stand-alone superstores and 3 CurrysDigital stores during the same period. DSG is expected to face strong competition from the US electrical goods retailer Best Buy, which launches in the UK this year.
Nominet, the body that maintains the register of .uk internet domain names, is planning to release two letter, one character and other reserved .uk website domains. This would make domains such as ba.co.uk and bp.co.uk available for the first time. Until now the rules for registering .uk domain sites have not allowed the registration of single or two letter domain names for “technical and policy” reasons. The changes will cover .co.uk, .org.uk, .me.uk and .net.uk domains.
Liberty International is to demerge to form two separate businesses: Capital Shopping Centres and Capital & Counties. Capital Shopping Centres will aim to deliver income and capital growth from its regional shopping centres, which include Lakeside in Thurrock, The MetroCentre in Gateshead and Manchester’s Arndale Centre. Capital & Counties will be a central London and international-focused property company with around £1.7 bn of properties, including interests in Covent Garden, Earls Court & Olympia, California and China.
The BBC is to close half of its websites and the radio stations 6 Music and Asian Network as part of its strategy review. The changes will also see the Corporation’s commercial arm, BBC Worldwide, cease publishing magazines in the UK, and are expected to reduce the cost of running the BBC by 25%.
The European Commission is to launch an investigation into Google’s dominance of the search advertising market following complaints from competitors that Google’s search engine unfairly relegates their websites in its search results. Microsoft is believed to be one of the companies that complained to the Commission. Google denies the accusations.
According to new research from the Institute of Economic Affairs, the cost of tax collection in the UK now amounts to nearly £20bn a year, including both compliance and administration costs. The right wing think tank claims that the impact of taxation on small businesses is “particularly devastating” and its director, Mark Littlewood, says that “Merely complying with tax laws is an enormous burden on British business. Not only do we need to slash tax, we need to simplify it to allow enterprise to thrive."
The value clothing retailer Ethel Austin and its sister company the homewares chain Au Naturale have gone into administration. The administrators say that in the current economic climate there is no guarantee that buyers will be found for the businesses and that they are “unable to rule out store closures and redundancies”. There are around 300 Ethel Austin outlets in the UK. The global financial crisis has hit the retail sector particularly hard and the adverse weather conditions in early 2010 have exacerbated the situation.