Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura
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Updated 16 September 2021

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura
  • Chief Executive said the acquisition of Vectura was a critical part of his strategy to move the company "Beyond Nicotine"
  • Asthma UK and the British Lung Foundation said they have sent a letter urging the UK government to look into any conflict of interest issues

LONDON: Cigarette maker Philip Morris (PMI) clinched its £1.1 billion ($1.5 billion) takeover of asthma inhaler maker Vectura on Thursday, as part of the company’s long term plan to develop “smoke-free” products and switch to being a “broader healthcare and wellness” company.

The deal won the support of the British company’s shareholders who decided to take the 165 pence-per-share offer from PMI, with nearly 75 percent backing the deal but angered health groups such as Asthma UK and the British Lung Foundation that have questioned whether a tobacco group should own a company that cures the very respiratory illnesses cigarettes cause.

PMI Chief Executive Jacek Olczak has argued that acquiring Vectura is a critical part of his strategy to move the company “Beyond Nicotine.”

He told the Telegraph last month that opponents of the deal were “not interested in progress” and accused them of “settling old scores” with the tobacco industry.

Olczak said PMI would provide Vectura’s scientists with the resources and expertise to reach its goal of generating at least $1 billion in net revenue from “Beyond Nicotine” products by 2025.

In the meantime, Asthma UK and the British Lung Foundation said they have sent a letter urging the UK government to look into any conflict of interest issues.

The letter was co-signed by 35 charities, public health experts and clinicians.

“There’s now a very real risk that Vectura's deal with big tobacco will lead to the cigarette industry wielding undue influence on UK health policy,” said Sarah Woolnough, Chief Executive of Asthma UK and the British Lung Foundation.

PMI has received regulatory clearances for the deal and following the public tender process, its offer cannot now be withdrawn.

While the company received the 50 percent threshold to make its offer unconditional, it has not yet reached the 75 percent of shares it needs to delist Vectura.

PMI said it was extending its offer to Sept. 30, to give Vectura shareholders time to accept its proposal.


Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins
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Updated 26 sec ago

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins
  • Sony ekes out 1% Q2 profit rise as PS5 costs squeeze margins

Japan's Sony Group Corp on Thursday squeezed out a surprise 1 percent rise in operating profit for its second quarter though costs from growing sales of its PlayStation 5 (PS5) console pressed on margins.


Weaker profitability in the key games segment could also not stop the group hiking its full-year operating forecast by 6 percent to 1 trillion yen ($8.81 billion) from its August forecast, driven by expected profit growth in areas including movies, music and electronics.


Sony said it has sold a cumulative 13.4 million units PS5 units since launch last November. That contributed to a 27 percent year-on-year jump in sales at its gaming unit, though profit was less robust as the conglomerate sold hardware below cost.


Game console makers frequently sell new devices below manufacturing cost as they build an install base for software sales. Sony said sales of first-party titles fell, though sales from other developers grew.


Sony aims to sell 14.8 million PS5 consoles this financial year - a target that takes into account the global semiconductor shortage.


Sony reported group profit of 318.5 billion yen for July-September. That compared with the 222 billion yen average of six analyst estimates compiled by Refinitiv.


The conglomerate - spanning areas such as entertainment, sensors and financial services - switched to IFRS accounting standards from U.S. GAAP in the current financial year.


Sony also said it is considering partnering Taiwan Semiconductor Manufacturing Co Ltd in its plans to build a chip plant in Japan, amid a corporate scramble to secure long-term stable semiconductor supply.


Across its business, Sony is enmeshed in a global battle for consumer attention as entertainment giants look beyond the United States for growth and mine non-English-language creators for content.


In a blow to Sony's pop culture credentials, South Korea's top cultural export, boy band BTS, said last week it has dropped its Columbia Records label for a deal with Universal Music Group NV.


Other challenges include an investor attempt to oust the management of India's Zee Entertainment Enterprises Ltd , casting a shadow over merger talks with Sony's local unit.


Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000
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Updated 9 min 45 sec ago

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000

Stellantis Q3 sales down 14% as chip crisis cuts output by 600,000
  • Shipments fell 27 percent year on year on a pro-forma basis in the third quarter to 1.131 million units

Stellantis, the world's fourth largest automaker, on Thursday reported a 14 percent fall in third-quarter revenue on a pro-forma basis after semiconductor shortages cut planned quarterly production by 30 percent or 600,000 vehicles.


Revenue amounted to 32.551 billion euros ($37.8 billion), short of analyst expectations of 33.02 billion euros in a Reuters poll.


"The level of chip shortage was probably slightly higher that what we had expected when we last spoke to the market in August," Chief Financial Officer Richard Palmer said, adding the full-year total toll of lost production would top a previous forecast of 1.4 million units.


Palmer however said the company was seeing a "moderate" improvement in chip supply in October and expected that trend to continue through the fourth quarter.


"Visibility on semiconductors continues to be a difficult subject for the industry," Palmer added.


Shipments fell 27 percent year on year on a pro-forma basis in the third quarter to 1.131 million units.


Lower volumes more than offset an improved vehicle mix and positive net pricing following recent vehicle launches, including new electrified vehicles, the company said.


Palmer said Stellantis forecasts a moderate improvement in shipments in the final quarter of this year.


"We see positive pricing across all regions," the CFO said, adding he saw good progress on post-merger synergies and cost management.


The carmaker, formed at the beginning of this year through the merger of Fiat Chrysler and France's PSA, confirmed its full-year target for an adjusted operating profit margin of around 10 percent.


The forecast, which was raised in August, assumes no further deterioration in semiconductor supply and no further significant lockdowns in Europe or the United States.


Stellantis, however, revised its full-year industry growth outlook for some regions, lowering them for North America, South America and the enlarged Europe area, while improving them for the Middle East and Africa region. It kept them unchanged for India, the Asia Pacific and China.


Gold demand drops 7% annually as ETF outflows gain traction

Gold demand drops 7% annually as ETF outflows gain traction
Updated 28 October 2021

Gold demand drops 7% annually as ETF outflows gain traction

Gold demand drops 7% annually as ETF outflows gain traction
  • Net sales for gold ETF placed overall gold demand into a year-on-year decline, despite demand increasing in all other sectors

Demand for gold drops 7 percent annually in the third quarter of 2021 as outflows from gold-backed exchange-traded funds (gold ETFs), according to the World Gold Council’s latest Gold Demand Trends report. 

Net sales for gold ETF placed overall gold demand into a year-on-year decline, despite demand increasing in all other sectors, the report showed. 

Consumer purchases of gold jewellery increased 300 percent year-on-year to 443 tonnes.

Meanwhile bars and coins, which are famous for retail investors, saw a fifth consecutive quarter of year-on-year gains in the same period.

Gold used in technology grew 9 percent year-on-year, and central banks added 69 tonnes to their reserves. 

“The relatively modest outflows from gold ETFs have had a disproportionate effect on this year’s figures, outweighing positivity almost everywhere else across the board,” Louise Street, senior markets analyst at the World Gold Council said. 

Street expects the demand will be the same for the rest of the year, “strong consumer and central bank will mitigate losses from ETFs.”

“Jewellery demand will continue to exceed last year’s levels, but investment demand in total will be weaker in 2021, despite healthy bar and coin demand,” he added.


AS IT HAPPENED: Future Investment Initiative 2021, Day Three

AS IT HAPPENED: Future Investment Initiative 2021, Day Three
Updated 4 min 7 sec ago

AS IT HAPPENED: Future Investment Initiative 2021, Day Three

AS IT HAPPENED: Future Investment Initiative 2021, Day Three

DUBAI: The Future Investment Initiative holds it final day in Riyadh with discussions ranging from venture capitalism, digital finance, fashion to investments in medical innovations.

The opening plenary will talk about how young companies could thrive with the torrent of venture investment into private markets from non-traditional sources, including hedge funds, sovereign wealth funds and family offices.

Watch the livestream of FII 2021’s third day:

(All times in GMT)

07:16 – Saudi Aramco’s Al-Khowaiter says “blue hydrogen is ready today to scale.”

07:13 – On carbon capture, Saudi Aramco’s Ahmad Al-Khowaiter says “the question of technology feasibility is not there, the technology is at scale today.”

07:08 – The most optimal production of hydrogen is the combination of blue and green – it’s never going to be one or the other, Aramco’s Ahmad Al-Khowaiter says.

07:04 – Ahmad Al-Khowaiter: “We are looking at $1.5 to $2 a kilogram for low carbon hydrogen, but the biggest challenge is transport, it will take some time to be cost competitive.”

06:45 – A parallel session, which includes Saudi Aramco’s chief technology officer Ahmad Al-Khowaiter, is also being held to explore investing in hydrogen and scaling technology.

06:10 – The scheduled speakers for the opening plenary, John R. Selby, managing director of Thiel Capital; Fadi Ali Ghandour, executive chairman of WAMDA; Ronaldo Mouchawarm, vice president of Amazon MENA; Akash Shah, chief growth officer at The Bank of New York Mellon; Dr. Hani Enaya, the head of private investments at Sanabil Investments, will try to answer how changes are playing out across different markets around the world, and how should founders navigate these new opportunities while continuing to grow and scale.


SABIC turns to net profit in first nine months of 2021

SABIC turns to net profit in first nine months of 2021
Updated 28 October 2021

SABIC turns to net profit in first nine months of 2021

SABIC turns to net profit in first nine months of 2021

Saudi Basic Industries Corp. (SABIC) made SR18 billion in net profits in the first nine months of 2021, compared to a net loss of SR2.6 billion in the same period last year.

The company attributed the rise to higher average selling prices, it said in a bourse filing.