Weekly Economic Round Up

                                                              10th September- 16th September



 Monday 10th September

Australia's Investa has set September the 17th as the deciding date for Blackstone Bid

Investa has September 17th as the date for which its shareholders vote on Blackstone’s Groups $2.4 billion bid. Blackstone had raised its per share price to A$5.52. After its rival Canada’s Oxford Properties Group (who already has a 10% share in Investa) also submitted a bid of A$5.50 per share.

Goldman Sachs selected as the adviser for SABIC stake sale

Saudi Arabia’s, Public Investment Fund, has selected Goldman Sachs to be its advisor for the sale of its stake in petrochemicals firm SABIC to state oil company Saudi Aramco. Citi has won the mandate to advise SABIC on the transaction. Aramco plans to buy a controlling stake in SABIC, with the possibility of it taking the entire 70 percent holding owned by PIF, the kingdom’s sovereign wealth fund. This is Saudi's biggest ever M&A deal. 

Tuesday 11th September

German department stores chains Kaufhof and Karstadt to merge   

Signa Holding and Hudson’s Bay Company have agreed to merge Germany’s two major department store chains, Galeria Kaufhof and Karstadt, to tackle the competition from ecommerce (buying and selling online.) The deal will combine the retail operations with annual sales of around 5.4 billion euros. The merge will be 49.99 percent owned by Canadian retail giant Hudson’s Bay, while Austrian Karstadt owner Signa will hold the remainder. The deal also comprises of the sale of stakes in HBC’s European real estate assets to Signa and will result in net proceeds of 411 million euros for HBC.Signa will be involved in the day to day operations of the combined business.

After investor backlash, Elementis to pay less for Mondo

British chemicals company Elementis has struck a deal $100 million less than initially agreed following backlash from its investors over the price. Elementis said on Tuesday that is has agreed to pay $500 million for Mondo Minerals, down from $600 million previously offered. Elementis was buying Mondo Minerals to expand into talc additives used in a range of products from plastics to cosmetics. Elementis said that the acquisition would be funded by a rights issue of about $230 million and from debt facilities.

Network Rail sells its property portfolio to fund railway improvements

Britain’s Network Rail agreed to sell its commercial property portfolio to property outsourcing firm Telereal Trillium and a Blackstone Group affiliate for 1.46 billion pounds. Network rail said that the sale consisted of about 5200 properties. This comes after the company looks to improve London’s commuter railway lines after coming under pressure from regulators and lawmakers for its poor management. Telereal and Blackstone Property Partners will be equal stakeholders and intend to be long term owners of the estate. Telereal will oversee the day-to-day property management of the portfolio, as the company have managed real estate occupied by local and central government departments, including Royal Mail and the Department of Work and Pensions.

Wednesday 12th September  

Sterling down as rumours about leadership challenge to May circulate

The Sterling fell today, after reports of a potential leadership challenge to Theresa May. The pound fell a quarter of a percent to as low as $1.2994 against the dollar after the BBC reported a group of about 50 lawmakers in May’s government had met to discuss how and when they could force her out of her job. After concerns about her decision to remain in a free trade zone for goods with the EU. The pound has jumped up and down after every Brexit related news, with investors trying to work out the type of deal being reached.

Trade War sends Chinese Stocks into disarray 

The trade war only began 6 months ago and has already sent the Chinese stocks stumbling into the same league as debilitated emerging markets such as Turkey, Argentina and Venezuela. China's stock has fallen 20% in 2018, joining the worst performing trio of the already mentioned countries. On the other hand, the American Nasdaq is one of the world’s biggest gainers, rising by 15.5%. Chinas currency has also fallen and share transaction volumes have shrunk.

Thursday 13th September 

Takeda considering selling Shire's eye care business to cut debt

Japans Takeda Pharmaceuticals is considering to sells its Shire eye care business once it closes its $62 billion purchase of the company, to cut some of the debt raised when needed to buy the company. Takeda's purchase of Shire was the largest overseas purchase by a Japanese company.  If Takeda chose to sell of Shire's Xiidra drug which treats dry eye, as well as its Natpara medicine used to control low blood calcium levels, it could help to raise between $4 billion and $5 billion. 

Oxford raises Blackstone Bid for Australians Investa 

Canadian Oxford Properties Group has raised its bid for Australian office owner Investa Office Fund to A$5.60 per share compared to Blackstone’s most recent offer of $5.52 escalating a bidding war with private equity giant Blackstone Group. This comes just after recent news on Monday, that Australia’s Investa had set September 17th as the data for which its investors vote on Blackstone’s bid.

Friday 14th September  

China approves Takeda's takeover of Shire

Takeda announced today, that China has approved its $62 billion takeover of Shire. This acquisition will be Japans largest oversea purchase ever. It has already received approval from Brazil, USA and is currently waiting responses from Japan and the European Union. Takeda's stocks are 15% down, since the company first said it was considering a bid for Shire, with investors concerned about the heavy debt burden the deal will impose on the drug maker. 

Walmart acquires Mexican food company app Cornershop for $225 million

Walmart has purchased Latin American food delivery service Cornershop for $225 million, in a move to increase its online grocery business in Mexico and Chile. This deal follows Walmart’s recent acquisitions as it aims to compete with Amazon.com Inc, the world’s largest online retailer. The acquisition of Cornershop which offers its service through a mobile app, will help it quicken deliveries for its Walmart, Superama and Sam’s Club stores in Mexico. The aim for Walmart is deliver food to more than 40 percent of U.S. households by year’s end using delivery companies like Uber and already has started in Canada by teaming up with start-up Instacart for on-demand grocery deliveries.



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