TOP NEWS SUMMARY: Unilever Buys Horlicks In India From GlaxoSmithKline

LONDON (Alliance News) - The following is a summary of top news stories ...

Alliance News 3 December, 2018 | 11:13AM
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LONDON (Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Unilever said it has reached an agreement to buy GlaxoSmithKline's Indian health drink brands such as Horlicks and Boost, as part of a strategy to increase its presence in health-food categories and in high-growth emerging markets. Unilever said it will buy the health food drinks portfolio of the pharmaceutical firm in India, Bangladesh and 20 other predominantly Asian markets. The transaction includes an all-equity merger of Hindustan Unilever with the India-listed GSK Consumer Healthcare India; acquisition of an 82% stake in GSK Bangladesh; and the acquisition of other commercial operations and assets outside India. The total consideration for the deal amounts to EUR4.60 billion, of which Unilever's implied contribution through both cash and through the issue of shares in Hindustan Unilever, its listed unit in India, totals EUR3.30 billion.
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AstraZeneca said it has completed an agreement to divest the prescription medicine rights to Nexium in Europe and the global rights, excluding the US and Japan, to Vimovo to Germany's Grunenthal. AstraZeneca - which focuses on oncology, cardiovascular, renal & metabolism and respiratory medicines - will get USD700 million for Nexium and will continue to commercialise the drug in all markets outside Europe. AstraZeneca will receive USD115 million for Vimovo and will retain no ownership rights. The book value of gross assets subject to the divestments was about USD99 million at the end of 2017, AstraZeneca said. For the year ended 2017, aggregate pretax profit attributable to Nexium and Vimovo was USD203 million. Aachen, Germany-based Grunenthal is a pharmaceutical firm specialising in pain, gout and inflammation.
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Coca-Cola HBC said it intends to buy back up to 7.5 million shares, worth GBP225 million, with the majority of the shares expected to be cancelled. The soft-drinks bottling company said the purpose of the share purchase programme is to avoid dilution resulting from the issue of stock options and meet the requirements of its employee incentive scheme. Coca-Cola HBC said it will cancel the majority of repurchased shares. Those that are not cancelled will be held in treasury until either awarded to employees under the company's employee incentive scheme or a capital reduction is implemented. The share repurchase plan is anticipated to complete no later than at the end of June next year.
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US private equity firm Bain Capital confirmed it will not make an offer for FTSE 250-listed RPC Group, following discussions with RPC's board. Earlier on Monday, RPC said takeover talks with Apollo Global Management remain ongoing but it has "mutually agreed to terminate discussions" with Bain Capital. Both Apollo and Bain Capital had until 1700 GMT on Monday to either announce a firm intention to make an offer, or walk away from the deal. RPC requested an extension to the deadline for Apollo, which now has until December 21 to make a firm offer. RPC said it will make a further announcement "when appropriate" and stressed "there can be no certainty" any offer will be made, nor the terms on which an offer might be made.
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McColl's Retail Group issued a profit warning, blaming lower-than-expected conversion of sales to profit, transitional challenges, and difficult trading conditions. The convenience shop and newsagent chain said it now expects adjusted earnings before interest, taxes, depreciation and amortisation for the 52-week period ended November 25 to be around GBP35 million, down from GBP44.0 million adjusted Ebitda recorded in the comparative year-ago period. The company also predicted adjusted Ebitda for 2019 financial year to be no more than a modest improvement on financial 2018 due to continued consumer uncertainty, as well as cost pressures due to the increase in the national living wage. McColl's said it experienced significant supply-chain disruption because of the collapse of wholesaler Palmer & Harvey and was forced to accelerate the rollout of Wm Morrison Supermarkets-branded products to its 1,300 stores. The UK listed company recorded a 1.4% drop in full-year like-for-like sales. Same store sales for the final quarter of 2018 financial year were flat.
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MARKETS
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London shares were higher with miners among the blue-chip risers after the US and China reached an agreement to defer any further increases in tariffs. The pound was down as investors look ahead to a week-long debate on the Brexit deal before a final vote in parliament on Tuesday next week. Wall Street was called for a higher open with major stock indices pointed up 1.7% to 2.4%.
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FTSE 100: up 2.3% at 7,140.62
FTSE 250: up 1.4% at 18,739.05
AIM ALL-SHARE: up 1.1% at 940.78

GBP: down at USD1.2727 (USD1.2770)
EUR: firm at USD1.1346 (USD1.1319)

GOLD: up at USD1,230.84 per ounce (USD1,1218.50)
OIL (Brent): up at USD61.82 a barrel (USD58.57)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Theresa May has been warned she is on course for a "historic constitutional row" unless the government releases its full legal advice on the Brexit deal. Labour said it is ready to combine with other opposition parties to start proceedings for contempt of Parliament unless the legal opinion of Attorney General Geoffrey Cox is published in full. The DUP – which props up the Conservative government in the Commons – was said to be ready to sign a joint letter with other parties to Speaker John Bercow on Monday unless ministers back down. Meanwhile, May's chief Brexit adviser secretly warned her that the Northern Ireland "backstop" agreed in her deal with Brussels was a "bad outcome" for Britain, it has been reported. In a letter to the prime minister, Oliver Robbins said the backstop, intended to prevent the return of a hard border with the Republic, would mean the imposition of regulatory checks between the North and the rest of the UK, according to The Daily Telegraph. The disclosure will add to the pressure on May at the start of another difficult week as she battles to save her Brexit deal ahead of the crucial Commons vote on December 11.
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The US and China have agreed to a 90-day ceasefire in their trade war, giving the sides time to continue negotiations, in a move that will likely be welcomed by markets and farmers. The announcement followed talks between US President Donald Trump and Chinese leader Xi Jinping in Argentina at the close of the Group of 20 annual summit. The meeting lasted more than two hours. Trump agreed that on January 1 he would leave the recently increased tariffs on USD200 billion worth of Chinese product at 10% and not raise the rate to 25%, as he had threatened. Negotiations between the sides in the next three months will also look at intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft. The White House warned that if the sides could not reach a deal in the allotted time frame, the tariffs would go up. China will also increase its imports from the US to improve the trade balance between the countries. "China has agreed to start purchasing agricultural product from our farmers immediately," the White House said. Further down the line Beijing will also add "very substantial" amounts of agricultural, energy, industrial, and other products to its imports.
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World leaders attending the G20 summit on Saturday endorsed a "rules-based international order" in a joint final statement which also laid bare stark differences between key powers. The leaders pledged to create better jobs, tackle the sources of refugee movements and implement the "necessary reform" of the World Trade Organization - a key demand of the US. "The system is currently falling short of its objectives and there is room for improvement," the joint statement said on multilateral trade mechanisms. The document lacked any language against protectionist trade measures. The leaders were also split over climate change and migration.
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Trump said he is likely to hold a second summit with North Korean leader Kim Jong Un early next year. "I think we're going to do one fairly - into January, February, I think," he told reporters when asked about the possibility of such a meeting as he flew home from the G20 summit in Argentina. Speaking aboard Air Force One, he suggested Kim could come to the US "at some point," but said no location had yet been set for the meeting. Earlier, at the conclusion of talks between Trump and Chinese President Xi in Buenos Aires on the summit's sidelines, China said it supported a second summit.
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UK manufacturing sector expanded at the fastest pace in two months in November, exceeding economists' expectations, survey data from IHS Markit showed. The CIPS manufacturing purchasing managers index rose to 53.1 from October's 27-month low of 51.1. Economists had forecast a score of 51.7. A PMI reading above 50 suggests growth in the sector. However, the latest PMI was among the weakest registered over the past two-and-a-half years, IHS Markit said.
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Eurozone's manufacturing growth slowed less-than-expected in November, amid marginal growth in output and weak business confidence, and was the lowest since August 2016, final data from IHS Markit showed. The manufacturing purchasing managers' index fell to 51.8 from 52 in October. The flash reading was 51.5. Germany's manufacturing PMI fell to a 31-month low of 51.8, which was higher than the flash reading of 51.6.
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The manufacturing sector in China accelerated slightly in November, the latest survey from Caixin revealed with a manufacturing PMI score of 50.2. That exceeded expectations for a score of 50.1, which would have been unchanged from the October reading. It also moved slightly further above the line of 50 that separates expansion from contraction. Individually, production was unchanged for the second straight month, while input inflation softened to a seven-year low. There was a further increase in total new work, but the export trend remained subdued.
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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Unilever PLC 4,329.50 GBX -1.59
GlaxoSmithKline PLC 1,555.00 GBX -0.70
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