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(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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Sanofi has agreed to acquire T-cell cancer therapies developer Amunix Pharmaceuticals for an initial USD1 billion. The deal supports the Paris-based drug firm's aim to expand its oncology offering. It may fork out an extra USD225 million for San Francisco, California-based Amunix, contingent on future development milestones. "Amunix's pipeline, which includes lead candidate, AMX-818, a masked HER2-directed TCE, offers a strong strategic fit with Sanofi's focus on developing potentially transformative cancer therapies in immuno-oncology," Sanofi said. Amunix's backers include BlackRock and Janus Henderson Investors.
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Asset manager Schroders has bought a stake in a renewable infrastructure investment manager. Schroders confirmed it reached agreement to acquire a 75% shareholding in Greencoat Capital Holdings for an initial GBP358 million. Last week, Schroders had said that it was in advanced talks with Greencoat Capital LLP to buy a significant stake in the business. The London-based money manager highlighted that Greencoat is one of Europe's largest renewable infrastructure managers, with GBP6.7 billion of assets under management at November 30. Schroders said the deal includes a potential earn out, payable three years after completion, which is subject to stretch revenue targets and the continued employment of the senior management team in the Greencoat business. It is capped at GBP120 million. The purchase price will be settled in cash.
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BHP said it has received regulatory and competition approvals for a planned unification under its Australian parent company. The watchdog approvals include backing from the National Treasury of South Africa, the miner said. Shareholder meetings to consider the unification will be held on January 20. The unification is expected to be completed on January 31. Back in August, BHP announced plans to unify its corporate structure under its Australian parent company. The changes move its primary listing to the Australian Securities Exchange. The move will see one of the largest components in the FTSE 100 leave the index, as London will no longer be its primary listing. BHP also will keep a secondary listing in Johannesburg and have American Depositary Shares traded in New York. The unification plan followed an agreement by BHP to merge its oil and gas portfolio with Sydney-listed Woodside Petroleum.
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The Irish government said it intends to sell part of the state's 71% stake in lender AIB through a trading plan managed by Merrill Lynch International. Minister for Finance Paschal Donohoe has instructed the US investment bank, part of Bank of America, to target a sale of up to, but no more than, 15% of the expected aggregate total trading volume in shares of AIB. The government said the total number of shares sold will depend on market conditions. The Merrill Lynch-led programme will begin in mid-January and run for six months. AIB has a market capitalisation of about EUR5.76 billion.
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Nike on Monday reported second-quarter sales and profit growth despite industry-wide supply chain disruptions. For the three months to November 30, revenue rose 1% to USD11.36 billion from USD11.24 billion a year ago. Nike's sales were flat on a currency-neutral basis as it continued to grapple with ongoing supply chain issues, it said. "Revenues in Greater China and APLA declined, largely due to lower levels of available inventory resulting from Covid-19 related factory closures. While closures had an impact across our portfolio, North America and EMEA delivered growth due to higher levels of in-transit inventory entering the second quarter," the firm said. However, net income rose 7% to USD1.34 billion from USD1.25 billion as Nike's gross margin increased to 45.9% from 43.1% year-on-year. Diluted earnings per share rose to USD0.83 from USD0.78.
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Micron Technology reports revenue of USD7.69 billion for first quarter which ended December 2, up from USD5.77 billion year-on-year. Net income jumps to USD2.31 billion from just USD803 million a year ago, and diluted earnings per share surge to USD2.04 from USD0.71. For the second quarter, revenue is seen around USD7.5 billion and diluted EPS around USD1.83. "Micron delivered solid fiscal first quarter results led by strong product portfolio momentum," says President & Chief Executive Sanjay Mehrotra.
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The US state of California announced Monday it is suing Walmart, alleging the retail giant unlawfully disposes of millions of toxic waste items. The state said it had conducted 58 inspections of trash compactors at Walmart stores between 2015 and 2021 and found items that require special handling when they are thrown out, such as batteries, insect killers, cleaning supplies, electronic waste and confidential customer information. "When one person throws out a battery or half-empty hairspray bottle, we may think that it's no big deal," California Attorney General Rob Bonta said in a statement. "But when we're talking about tens of thousands of batteries, cleaning supplies, and other hazardous waste, the impact to our environment and our communities can be huge." Based on Walmart's records, the state said the store illegally disposes of 159,600 pounds of toxic waste each year amounting to a million items.
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Swiss bank UBS on Monday filed an appeal with France's top court over EUR1.8 billion in penalties it was ordered to pay for helping French residents evade tax. The Paris appeals court last week imposed the penalties upon UBS for its role in helping French residents commit tax fraud between 2004 and 2012. "UBS has filed an appeal with the French Supreme Court regarding the decision of the Court of Appeal, including a fine of EUR3.8 million, the confiscation of EUR 1 billion, and civil damages of EUR800 million," read a company statement. UBS said it filed the appeal within a statutory five-day notice period to "thoroughly assess the verdict of the Court of Appeal and determine next steps in the best interest of its stakeholders". The Paris appeals court found UBS guilty of concealing serious tax fraud and illegal banking activities in France between 2004 and 2012, when it sent Swiss bankers to court well-heeled French clients.
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Qatar Airways said it had launched legal proceedings against Airbus in the High Court in London, following a dispute with the aircraft manufacturer over degradation of the exterior fuselage surfaces. The issue has led the airline, one of the Gulf region's "big three" carriers, to ground some of its A350 planes and not accept further deliveries of the wide-body aircraft from the European firm until the problem is resolved. "We have sadly failed in all our attempts to reach a constructive solution with Airbus in relation to the accelerated surface degradation condition adversely impacting the Airbus A350 aircraft," Qatar Airways said in a statement.
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MARKETS
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Stocks were rebounding on Tuesday from Monday's sell-off, as both the US and UK appeared likely to avoid a pre-Christmas lockdowns. Meanwhile, drug makers continued to report effectiveness against the Omicron variant for their Covid-19 booster shots. Among companies making news, Sanofi was up 0.3% in Paris, while Schroders was up 2.5% in London.
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CAC 40: up 0.5% at 6,904.89
DAX 40: up 0.7% at 15,348.74
FTSE 100: up 0.8% at 7,256.70
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Hang Seng: closed up 1.0% at 22,971.33
Nikkei 225: closed up 2.1% at 28,517.59
S&P/ASX 200: closed up 0.9% at 7,355.00
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DJIA: called up 0.7%
S&P 500: called up 0.7%
Nasdaq Composite: called up 0.8%
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EUR: soft at USD1.1294 (USD1.1299)
GBP: up at USD1.3250 (USD1.3221)
USD: up at JPY113.70 (JPY113.41)
Gold: up at USD1,796.10 per ounce (USD1,793.80)
Oil (Brent): up at USD72.14 a barrel (USD69.78)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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US President Joe Biden does not plan on "locking the country down" in response to a surge in coronavirus cases, the White House said Monday. Biden, in a speech he is to deliver on Tuesday, will stress the benefits of vaccination against Covid-19, White House Press Secretary Jen Psaki said. "This is not a speech about locking the country down," Psaki told reporters. "This is a speech outlining and being direct and clear with the American people about the benefits of being vaccinated, the steps we're going to take to increase access and to increase testing."
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Biden is raising mileage standards for cars and trucks sold in the US in a bid to limit emissions, as the spending bill he counted on to fund the fight against climate change appears to be on life support. The new regulations announced by the Environmental Protection Agency on Monday reverse more lax fuel standards under Donald Trump, and show how Biden's White House is using regulatory power to curb emissions. The announcement comes as the president's Build Back Better social spending plan may have suffered a mortal blow after a crucial Democratic senator said he would not support the USD1.75 trillion proposal. "We followed the science, we listened to stakeholders and we are setting robust and rigorous standards that will aggressively reduce the pollution that is harming people and our planet – and save families money at the same time," Environmental Protection Agency Administrator Michael Regan said when announcing the standards.
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New restrictions are unlikely to stop Christmas celebrations in the UK this week but Prime Minister Boris Johnson has urged caution amid speculation further measures will be needed to halt the spread of the Omicron variant. But as Johnson promised to keep the data under constant review, the Queen abandoned her Christmas at Sandringham and London Mayor Sadiq Khan cancelled the capital's New Year's Eve celebrations. After a special two-hour meeting of the Cabinet on Monday, the prime minister said the government needs to be clearer about the rate of hospital admissions associated with Omicron, and the effectiveness of vaccines against it, before imposing additional measures in England to prevent the spread of the virus. But Johnson said the government will "reserve the possibility" of implementing new restrictions.
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UK government borrowing declined in November, the latest figures from the Office for National Statistics showed, though the figures came amid new calls for government support of people and industries hurt by recently imposed restrictions to combat the Omicron variant of Covid-19. UK public sector net borrowing - excluding public sector banks - was estimated to have been GBP17.4 billion in November, falling 7.4% from GBP18.8 billion in October. The figure was higher than the market forecast of GBP16 billion and was the second-highest November borrowing since monthly records began in 1993.
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As the prospect of a severe fifth wave of the coronavirus driven by the Omicron variant looms over Germany, heads of both the country's federal and state governments will meet on Tuesday afternoon to discuss stricter restrictions for January. The focus of the video conference between Germany's 16 state premiers and Chancellor Olaf Scholz is to be how best to reduce social contacts for the entire population, including those who are fully vaccinated and those who have recovered from Covid-19. Closures of clubs and discos are also being discussed and appear likely.
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Germany's consumer confidence has fallen as 2021 draws to a close, with a rise in Covid-19 cases knocking sentiment, figures from research house Growth for Knowledge showed. GfK consumer sentiment tracker will fall to minus 6.8 points in January, according to estimates, from minus 1.8 points in December. The figure would represent the worst monthly tally since June's minus 6.9 points.
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Switzerland's trade surplus narrowed slightly in November, according to figures from the Federal Customs Administration. Switzerland's trade surplus slimmed to CHF4.22 billion, around USD4.59 billion, in November from CHF4.31 billion in October. Exports rose 4.0% monthly to CHF21.80 billion in November, from CHF20.95 billion in October. Imports increased 5.6% to CHF17.58 billion from CHF16.65 billion.
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Producer prices in Italy grew at a slower pace monthly in November, data from national statistics office Istat showed, though annual growth accelerated. On a monthly basis, producer prices growth slowed to 1.2% in November, following a 7.1% increase in October. October's figure was the highest monthly surge since the series started, according to Istat. On an annual basis, producer prices in Italy surged by 22% in November, accelerating from a 20% gain in October.
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Australia's central bank believes the emergence of the Omicron Covid-19 variant can create uncertainty, though it is not likely to "derail" the nation's economic recovery, minutes from the latest monetary policy meeting showed. At the December 7 meeting, the Reserve Bank of Australia's cash rate target was held at 10 basis points, or 0.10%. It said it would continue to buy government securities at the rate of AUD4 billion a week until at least mid-February. It would then "consider" the bond-buying programme. According to the minutes, the RBA discussed three possible moves for its bond purchase programme. One would have seen it tapered from mid-February with an end in May in mind. Another was to reduce the pace of purchases and review it in May. The third option was to end purchases altogether in February.
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By Tom Waite; thomaslwaite@alliancenews.com
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