(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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AstraZeneca, which is finalising a vaccine against Covid-19, said Saturday it was buying US biotech firm Alexion Pharmaceuticals for USD39 billion to boost its work on immunology. "Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases," AstraZeneca Chief Executive Pascal Soriot said in a statement, announcing the year's biggest deal in the pharma sector. "We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients," he said. Both boards have agreed to the cash-and-stock deal, which values Alexion at USD175 a share, a premium of 45% to the Boston-based company's closing price on Friday in New York of USD120.98. Alexion was up 33% at USD160.72 in New York pre-market trade on Monday. Astra shares were down 6.1% in London.
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Codemasters Group Holdings said it has agreed to a GBP945 million takeover bid from Electronic Arts, withdrawing its previous recommendation of the GBP726 million offer made by Two Interactive Software. EA and Take-Two are US competitors in the video game industry. Electronic Arts has a market capitalisation of USD39.39 billion, while Take-Two is valued at USD21.88 billion. In November, Take-Two reached an agreement to buy the UK's Codemasters. However, Redwood City, California-based EA's 604 pence per share cash offer tops New York-based Take-Two's bid of 120 pence per share in cash and 365p in Take-Two shares, valuing Codemasters at 485p per share. Codemasters said its directors intend to recommend unanimously that shareholders vote in favour of the EA deal. Codemasters shares were trading above EA's offer price in London on Monday. They were up 21% at 644.00p.
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Aviva said it has agreed to sell its entire shareholding in its Vietnam unit to Manulife Financial Asia - which is part of Canadian insurance firm Manulife Financial - for an undisclosed sum. The sale of Aviva Vietnam Life Insurance Co Ltd is part of the FTSE 100 life and general insurer's strategy to focus on its strongest businesses in the UK, Ireland and Canada, while reducing its focus in Asia and Europe. On Thursday last week, Aviva announced the completion of the sale of its Hong Kong joint venture Aviva Life Insurance Co Ltd to its partner Hillhouse Capital Ltd. It had said that disposal was the fourth this year as part of its simplification strategy. In November, Aviva agreed to the sale of its 80% stake in its Italian joint venture Aviva Vita to UBI Banca for EUR400 million. Aviva did not disclose the sale price for the Vietnam unit but said the deal will increase its IFRS net asset value and Solvency II surplus by about GBP100 million.
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Rosneft Oil Co - the Russian oil company in which BP holds a 20% stake - announced the sale of a 49% stake in Krasgeonats to Norwegian energy group Equinor for USD550 million. Krasegonats holds 12 exploration and production licences in several areas of resources in Eastern Siberia, including Danilovsky, Preobrazhensky and Verkhneichersky. Under the deal, Equinor will also undertake several obligations to fund exploration campaigns on the sites, while Krasegonats continues to develop the North-Danilovskoye field. The field's output is expected to plateau at 2 million tonnes of oil per year in 2024. All other licence areas are in the exploration and appraisal stage.
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MARKETS
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News that the UK and EU have decided to extend post-Brexit trade talks past their weekend deadline helped the mood at the start of the week, with both the FTSE 100 and the pound rallying. The best performers in London were domestically-exposed names, on hopes that a no-deal Brexit can still be avoided as the end of the year looms. The pound was up by almost two US cents from late Friday. In the US, stocks are also called for a higher start, with the Dow Jones called up 0.7%, the S&P 500 up 0.6% and the Nasdaq up 0.4%.
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FTSE 100: up 0.4% at 6,575.44
FTSE 250: up 1.4% at 19,891.47
AIM ALL-SHARE: up 0.6% at 1,067.92
GBP: higher at USD1.3412 (USD1.3217)
EUR: higher at USD1.2150 (USD1.2110)
GOLD: lower at USD1,823.10 per ounce (USD1,843.56)
OIL (Brent): higher at USD50.53 a barrel (USD50.04)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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A trade deal between the UK and EU is still possible, Brussels' chief negotiator Michel Barnier has insisted. Talks were extended on Sunday after UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to continue the process despite major differences still remaining. Barnier updated diplomats from the 27 EU states about the progress which has been made before resuming negotiations with his UK counterpart David Frost. For months the talks have been deadlocked on the issues of fishing rights and the "level playing field" to ensure that neither side can unfairly compete with the other on environmental standards, workers' rights or state subsidies. Barnier confirmed that those remained the main issues, telling reporters in Brussels "two conditions are not met yet" but "this deal, it is still possible". The other issue which has dogged the negotiations – the legal mechanisms to govern any deal – was not mentioned by Barnier, suggesting those difficulties may have been resolved. Barnier on Monday signalled "some progress" in talks on a post-Brexit trade deal, EU diplomats said, but differences remain on key sticking points. "There might now be a narrow path to an agreement visible – if negotiators can clear the remaining hurdles in the next few days," an EU diplomat said after a briefing from Barnier.
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The surge in coronavirus cases across London is "deeply concerning" and requires further government action to be brought under control, Sadiq Khan has said. The Mayor of London wrote to UK Prime Minister Boris Johnson on Sunday requesting for an immediate increase in Covid-19 testing provision across the capital in response to the rising number of infections. Khan also asked for a compensation scheme to be put in place for businesses ahead of any further restrictions being imposed on the city. He warned that moving London from Tier 2 into Tier 3 would have a "catastrophic" economic impact on businesses and put "hundreds of thousands of livelihoods at stake". The government said it will review all tiers in England on December 16.
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Industrial production in the eurozone strengthened in October, figures from Eurostat showed. Production rose by 2.1% in the euro area on a month-on-month basis, far stronger than the 0.1% growth registered for September. The reading also beat expectations, according to FXStreet, of a 2.0% monthly increase. Annually, industrial production was down 3.8%, though this was an improvement on the 6.3% fall recorded in September and again beat forecasts of a 4.4% decrease. At either end of the annual changes, Ireland recorded a 16% year-on-year slump, while Belgium posted growth of 5.4%.
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German Economy Minister Peter Altmaier said he is "relatively sure" the country will not go into recession as a result of a second lockdown, which is going into effect later this week. "I am relatively sure that we will not experience a recession like the one that occurred in the spring," Altmaier told the Deutschlandfunk broadcaster. German gross domestic product shrank by 9.8% in the second quarter at the height of the first wave of the global pandemic, but grew again by a record 8.5% in the third quarter. Germany is to close all but essential shops in the coming days under a weeks-long lockdown covering the Christmas holiday period. The measures are to come into effect from Wednesday and last until January 10. These also include considerable restrictions imposed on schools and kindergartens, with most facilities to be closed or only operate to a limited extent.
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Talks on new economic relief for millions of Americans hit hard by the Covid-19 pandemic are set to continue Monday in Washington between the White House and Congress, with less than two weeks to go before a previous plan expires. US Treasury Secretary Steven Mnuchin and speaker of the House of Representatives Nancy Pelosi spoke on the phone for a half-hour on Sunday, according to a tweet by the top Democrat's spokesman Drew Hammill, and plan to speak again on Monday. Democrats and Republicans have been locked in negotiations since July on plans for supplementary financial aid to households, businesses and local communities suffering from the country's worst economic downturn since the Great Depression. Aid to the unemployed as part of a massive recovery plan of USD2.2 trillion adopted in the spring expires on Boxing Day, when millions of Americans will find themselves without income.
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