HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Shares in Carphone Warehouse Group and Dixons Retail took a hit Thursday after the companies announced a GBP3.6 billion merger that will create the UK's biggest retailer of mobile phones and electrical goods.

The new firm, which will be called Dixons Carphone PLC, will see the shareholders of both companies will have equal shares in the new operation, the two companies said.

Under the merger terms, Carphone Warehouse Chairman Charles Dunstone will become chairman of the combined company, while Dixons Chief Executive Sebastian James will become CEO. However, the equality of the deal - both companies have market capitalisations of about GBP1.8 billion - has led analysts to question who will take the driving seat in the integration process.

Merger talks have been taking place since February, less than a year after Carphone Warehouse extricated itself from a failed joint venture with Best Buy of the US. The deal comes as traditional retailers, particularly those in the electronics sector, face increasing competition from online retailers.

Both companies are trading lower early Thursday afternoon and amongst the worst three fallers on the FTSE 250, together with travel agent Thomas Cook.
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FTSE 100: down 0.02% at 6,877.08
FTSE 250: down 1.3% at 15,774.77
AIM ALL-SHARE: down 0.02% at 807.79
GBP-USD: down at 1.6758
EUR-USD: down at 1.3660
GOLD: down at USD1,302.26 an ounce
OIL (Brent): up at USD109.40 a barrel
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Key UK Corporate News
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FTSE 100:

London Stock Exchange Group said its full-year revenue rose by 50% as it continued its diversification strategy, but it said pretax profit fell due to higher operating expenses due to the acquisition of clearing house LCH.Clearnet last year, for which it unveiled more ambitious cost-savings targets. AstraZeneca announced that it will be presenting over 40 scientific abstracts to "demonstrate the rapid progression of its oncology pipeline" at the 50th Annual Meeting of the American Society of Clinical Ongology at the end of May. The Independent newspaper has reported that HSBC Holdings has stepped back from its original bonus plans for Chairman Douglas Flint, cutting it to a one-off maximum payment of GBP1.0 million. Aviva reported an increase in its main measure of sales profitability, as growing European and Asian operations offset a 22% decline in the UK, where the government has initiated a shake-up of the pensions industry. Old Mutual said its first-quarter gross sales increased by 12%, driven by its wealth arm more than offsetting currency woes for its emerging markets operations, while commenting that its wealth arm could benefit from recent pensions changes in the UK. Tullow Oil said its Ekunyuk-1 well and Twiga-2 wells have encountered further oil-bearing regions in northern Kenya. Land Securities said it does not expect any changes in the supply and demand balance in the London office market in the next two years, but warned that the costs of developing new buildings was rising and any new developments will require pre-lettings.

FTSE 250: Kier Group said its construction business was seeing more opportunities in the UK and overseas, its property unit had maintained its pipeline and won new contracts, and the business as a whole was "on course" in its current financial year. Thomas Cook narrowed its pretax loss in the first-half of the year to GBP366 million, compared with a loss of GBP394 million the prior year, but said it continues to see a negative impact on holiday bookings due to civil unrest in Egypt, with bookings to the previously popular destination down by a quarter of a million people. Premier Farnell maintained its expectations for the full-year, after it saw sales per day rise by 2.0% in its first quarter ended May 4, although the sales per day growth lagged slightly behind Jefferies' forecast for growth of 3%. Centamin said its pretax profit dropped by 71% in its first quarter as a slump in production and lower gold prices hit its revenues, while its cost of sales increased as on-going disputes with the Egyptian government over fuel costs continue. SOCO International said that its production in the first four months of the year fell in comparison to the previous year.

AIM All-Share: Staffline Group shares have jumped after, alongside a trading update, the recruitment and outsourcing company said that it has agreed to acquire Avanta Enterprise Limited, a provider of Welfare to Work and skills training training services across the UK, for GBP65.5 million. Range Resources is trading higher after the hydrocarbon exploration firm said it has secured USD12 million in financing through a subscription agreement with Abraham Ltd, a Hong Kong-based private investor. Also trading higher is Premier African Minerals; the multi-commodity natural resource company said that Circum Minerals Ltd has bought its stake in the Danakil potash project in Ethiopia for cash and shares. Kalibrate Technologies is also up after the company announced a series of business wins and contract implementations across multiple geographies in the second half of its current financial year. At the other end of the market, shares in SyQic have slumped after the mobile video content provider said pretax profit declined in its maiden set of annual results, hit by the costs of its initial public offering on AIM last December. Tavistock Investments said it has conditionally agreed to buy independent financial advisory County Life & Pensions Ltd and investment management business Blacksquare Ltd, in a reverse takeover that is set to propel the former software company into the financial services industry. Bagir Group has plummeted after the formal-wear tailoring company warned that it had been hit by an unexpected reduction in orders from its largest customer and was talking with its lenders about getting a waiver on its banking covenants.
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Top Economics And General
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The eurozone's economy expanded less than expected in the first three months of 2014, posting a growth rate of only 0.2%, data released showed. Analysts had forecast quarter-on-quarter growth of 0.4%, amid hopes that the currency bloc is finally recovering from a debilitating economic crisis. But growth rates in the eurozone's biggest economies remain sluggish. Powerhouse Germany saw its economy expand by 0.8% in the first quarter, but France's stagnated and Italy's shrunk by 0.1%, according to the new data by EU statistics agency Eurostat.
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Germany's economic growth accelerated more than expected in the first quarter, preliminary figures showed. The quarterly growth in gross domestic product doubled to 0.8% in the first quarter from 0.4% in the previous quarter, Destatis said. GDP was forecast to grow 0.7%. Destatis, however, said the factor that contributed to the strong growth at the beginning of the year was the extremely mild weather.
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The French economy remained flat in the first quarter after recovering at the end of 2013, data from the statistical office Insee showed. Gross domestic product showed nil growth from the prior quarter, while it was forecast to rise 0.1%. That follows a 0.2% expansion in the fourth quarter of 2013.
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The Japanese economy grew at an annual 5.9% in the January-to-March period thanks to last-minute purchases before the sales tax increase in April, the government said. The reading on gross domestic product was above the 4.3% growth predicted in a poll of economists by the Nikkei business daily. Consumer spending, which accounts for about 60% of gross domestic product, rose 2.1% quarter-on-quarter before the government raised the nation's sales tax in April to 8% from 5% - the first hike in 17 years.
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Anti-government protesters disrupted political talks at an air force base, after three people were killed in attacks on protest camps in Bangkok, reports said. Thousands of protesters broke into the Royal Thai Air Force Academy, despite riot police guarding the compound, Blue Sky TV reported. he station reported that the protesters forced the departure of Election Commission officials and caretaker Prime Minister Niwattumrong Boonsongpaisan, who had been scheduled to discuss the date for a fresh election.
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EU and US negotiators are to meet for a fifth time starting Monday in Washington in their efforts to create the world's largest free trade area. But questions from civil society and even some European governments about the proposed Transatlantic Trade and Investment Partnership have slowed things down. Just days before the next round of talks were to start, the EU Commission on Tuesday held a rare meeting with stakeholders, live-streamed on the internet, to explain one of the more controversial issues involving protection of foreign investors.
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The number of people killed in what could be Turkey's worst mining disaster rose to over 280, the government was reported as saying. No miners were found alive in the previous 12 hours as more bodies were recovered, said Energy Minister Taner Yildiz, according to the Anadolu news agency.
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A spate of wildfires in southern California burned at least 30 homes and forced the evacuation of the San Onofre nuclear power plant, authorities said Wednesday. The Los Angeles Times reported that non-essential employees were evacuated from the nuclear facility south of Los Angeles due to a nearby brush fire, but that there was no danger to the plant itself. The destroyed homes were in the community of Carlsbad, an affluent coastal town just north of San Diego, where more than 15,000 people were forced to evacuate.
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Afternoon Watchlist (all times British Summer Time)

14:15 US Industrial Production
14:15 US Capacity Utilisation
15:00 US NAHB Housing Market Index
15:00 US Philadelphia Fed Manufacturing Survey
15:30 US EIA Natural Gas Storage change
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Thursday's Key UK Corporate Events

Inchcape Interim Management Statement
Keller Group Interim Management Statement
Kentz Corporation Interim Management Statement
Grainger Half Year Results
SIG Interim Management Statement
Bovis Homes Group Interim Management Statement
Brammer Interim Management Statement
Intertek Group Interim Management Statement
John Menzies Interim Management Statement
Tribal Group Interim Management Statement
Headlam Group Interim Management Statement
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Thursday's Key Economic Events (all times British Summer Time)

00:00 US Fed's Yellen Speech
03:00 China FDI - Foreign Direct Investment
05:30 Japan Industrial Production
05:30 Japan Capacity Utilization
10:00 EU Trade Balance
13:30 US Building Permits
13:30 US Housing Starts
14:55 US Reuters/Michigan Consumer Sentiment Index Preliminary
16:50 US Fed's Bullard speech
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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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