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PMI has received regulatory clearances for the deal and following the public tender process, its offer cannot now be withdrawn.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


Petrochemical shares lead TASI decline by 0.33%: Market wrap

Petrochemical shares lead TASI decline by 0.33%: Market wrap
Updated 34 sec ago

Petrochemical shares lead TASI decline by 0.33%: Market wrap

Petrochemical shares lead TASI decline by 0.33%: Market wrap

RIYADH: Falling petrochemical shares saw the Tadawul All-Share Index finish down by 39 points on Wednesday, or 0.33 percent, closing at 11,807 points.

The market's decline was led by SABIC, which fell by 1.2 percent. 170 company shares in total were down, led by Petro Rabigh, after it fell to the minimum. This coincided with the company's announcement of profits of SR221 million.

174.4 million of shares changed hands in 298.000 deals, with heavy trading in Saudi Aramco, AlRajhi Bank, National Industrialization Co. 27 company shares rose during today's session, led by Banque Saudi Fransi, and Herfy's share, which rose by 2.8 percent.

Atheeb Telecom recorded its lowest close since last February, after the stock fell today by 9.1 percent. Also, Riyad Bank's profits increased to SR4408 million or 15 percent by the end of September. Saudi Aramco recorded a gain of 0.8 percent, which is the highest closing since December 2019. 

Arab Sea recorded the highest closing since its debut at SR171 amid trading of about 540,000 shares. Among the other risers, Banque Saudi Fransi's shares were up by 4 percent after it announced profits in the third quarter grew 172 percent to reach SR907 million.

The parallel market index Nomu ended the day down 39.01 points, or 0.16 percent. It closed at 23,912.22 points, after 1,114 trades.


UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap
Updated 2 min 41 sec ago

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

RIYADH: Britain’s economy is expected to grow by 6.5 percent in 2021, the country’s Chancellor of the Exchequer, Rishi Sunak, said in his Budget speech to parliament on Wednesday. This is a considerable revision from March’s forecast of 4 percent.

As for 2022, the economy is predicted to expand by a slightly lower 6 percent, the Chancellor added. 

The country’s inflation rate is also expected to average at 4 percent for the next year, up from the current 3.1 percent. This is driven by rising energy costs and supply shortfalls.

Moreover, Sunak announced that around £6 billion ($8.2 billion) will be delivered to the National Health Service as it struggles with the mounting number of Covid-19 patients in the country.

Germany’s economy forecasts

Meanwhile, Germany's economic growth forecast was sharply cut to 2.6 percent for 2021, down from April’s prediction of 3.5 percent, the German government said. 

This was mainly driven by distortions in the supply chain as well as hikes in energy prices.

However, the forecast for next year was favorably altered to 4.1 percent up from the former expectation of 3.6 percent, the government added.

The economy ministry also said in a statement that inflation is forecast to reach 3 percent in 2021 but will taper off in the coming years. This will be the highest level since 1993. Inflationary pressures in global energy prices and supply disruptions contributed to the rise in consumer prices.

Price inflation is expected to be 2.2 percent in 2022 and 1.7 percent in 2023.

US Senate introduces 'billionaires tax'

American billionaires are set to pay taxes on unrealized gains from their assets in order to finance Joe Biden’s social policy and climate change legislation, according to the top Senate Democrat for tax policy. 

The legislation is expected to cost about $1.5-2 trillion.

The so-called “billionaires tax” is a part of a wider plan that also includes an anticipated 15 percent minimum corporate tax rate on the country’s most profitable companies.

Canada’s interest rate decision

Canada’s central bank held its interest rate at 0.25 percent. This comes at a time when the country grapples with the highest inflation rate since February 2003. The annual rise in consumer prices sat at 4.4 percent in September.

Morocco enters the global debt market

To provide around 20 percent of Morocco’s financing needs in its 2022 budget, its government plans to enter the global debt markets, Asharq reported citing Morocco’s Minister of Economy and Finance.

Based on the 2022 pre-budget statement, the country needs around MAD105 billion ($11.6 billion) in financing. It also needs to petition the parliament in order to increase the government's external debt ceiling to MAD40 billion ($4.4 billion).

Meanwhile, the pre-budget statement also expects a rise in total public spending by 9 percent to reach MAD519 billion ($57.2 billion). Additionally, the budget deficit is predicted to slip next year to 5.9 percent of GDP from the 6.2 percent expected for this year, the government said last week.

Mexico’s trade deficit

The trade deficit in Mexico was $2.4 billion in September, falling from a surplus of $4.4 billion in the same month from last year, according to the country’s official statistics agency.

Imports to the country leaped by 29.1 percent to $44.1 billion, driven by purchases of intermediate goods and consumer goods which grew by 28.6 percent and 35.9 percent respectively.

This was accompanied by a lower growth in exports which rose by 8.2 percent only to reach $41.7 billion. The increase was largely accounted for by a 5.9 percent jump in non-oil exports as well as a 6.1 percent rise in exports of manufactured products.

Brazil’s unemployment

Brazil's unemployment rate fell to 13.2 percent in the three months ending in August, down from 13.7 percent in May-July, official data revealed. This is the lowest unemployment level since May 2020.

In addition, the country’s participation rate rose to 58.6 percent.


ACWA Power-led consortium closes financing $12 billion Jazan IGCC project

ACWA Power-led consortium closes financing $12 billion Jazan IGCC project
Updated 30 min 50 sec ago

ACWA Power-led consortium closes financing $12 billion Jazan IGCC project

ACWA Power-led consortium closes financing $12 billion Jazan IGCC project

RIYADH: PIF-owned ACWA Power, today announced the financial close and completion of the acquisition of the first group of assets for the Jazan integrated gasification combined cycle (IGCC) project.

The JV will complete the commissioning and testing and commence operating, and maintaining the plant to supply power, steam, hydrogen, and other utilities for Aramco’s Jazan refinery, under a 25-year contract with Aramco, it said in a statement.


Fashion turns heads at FII

Fashion turns heads at FII
Updated 28 min 27 sec ago

Fashion turns heads at FII

Fashion turns heads at FII

RIYADH: The coronavirus pandemic forced most organizers around the world to hold several key summits and events online thus depriving participants of the chance to meet others in person. 

High-profile events such as the Future Investment Initiative not only offer a platform to discuss global and regional issues but also provide an opportunity for the attendees to try to look their best. 

The pre-event to-do list not only includes finalizing keynote speeches or presentations but also the most suitable attire to don at the event.

Despite all the seriousness of the issues being discussed at this year’s FII, one cannot ignore the style and fashion tastes of the participants. Colorful abayas, suits, dresses, and special accessories tell stories of their own.

Colin Rhys, chief executive officer of KARAVAN, a nomadic hospitality brand looking to expand into the Kingdom, turned heads with his unique fedora with a piece of Shemagh (Saudi headgear) tied to it. 

He told Arab News that the idea of the hat came up five years ago in AlUla when the original black band that went around it broke off. “I was with a Saudi friend who tied this (Shemagh material) to the hat,” Rhys said.

“I wore it to every FII, every single event, every year, everywhere,” he said. “It has become a part of me.”

He added: “We’re really excited to be here at the FII. I think we see the huge opportunity that the Crown Prince has laid out for us, and we’re excited to be part of the journey moving toward (Vision) 2030.”

Asma Arkubi, Saudi client adviser at the Red Sea Development Co. said she saw some of the most beautiful abayas at the FII.

“I really liked how these women walked in with something cultural and extremely fashionable at the same time, it was like a mini fashion show for me,” she told Arab News.

“Combining modern chic designs with culture is something I’ve always been a fan of,” she added.

John Pagano, CEO of the Red Sea Development Co. and Amaala, said it is his third time attending the FII, and highlighted that attendees are eager to come back to in-person events.

“I think this is almost probably the best FII for a whole variety of reasons, not least because it's the first one after the pandemic and it just shows how much people want to come and meet face to face something we had been missing for over the last two years,” Pagano told Arab News.

“But I also think, and I’m really pleased of the fact that it’s really cemented Saudi Arabia’s reputation for the Future Investment Initiative. It is now a global event, and it’s attended by the brightest people in the world, and I’m pleased to be part of that,” he added.

Mimoun Assraoui, CEO of RIF Trust and vice-chairman of Latitude, who was also present at the FII, said: “I’m very happy to be here because I missed it last year. We did it virtually last year and this year I’m amazed by the contents, the people, and the high-level of experience, and seeing people happy again to connect with each other.”


Newcastle deal a sign of UK-Saudi business partnership, says British envoy

Newcastle deal a sign of UK-Saudi business partnership, says British envoy
Updated 27 October 2021

Newcastle deal a sign of UK-Saudi business partnership, says British envoy

Newcastle deal a sign of UK-Saudi business partnership, says British envoy
  • Ken Costa says new Alvarium Tiedmann group is looking at Riyadh as a possible location for a regional headquarters

RIYADH: One of the leading advocates of stronger relations between Saudi Arabia and Britain believes the opposition expressed in some parts of the UK over the takeover of Newcastle United Football Club is just  “noise.”

Ken Costa, the former investment banker who has been Prime Minister Boris Johnson’s special envoy for the past three years, told Arab News: “It’s a competitive world. You see a strong player coming into your market, what do you want to do? You want to create noise. A lot of it is noise, a lot of it is trying to find reasons why it (the takeover) couldn’t happen, but it has happened.”

Costa was speaking on the sidelines of the FII forum in Riyadh, which he was attending as part of the British delegation. He said that the Newcastle deal — by a consortium 80 percent controlled by the Saudi sovereign wealth fund, the PIF, was a good thing for the economy of the northeast of England.

“There is a very real possibility of welcoming Saudi investment into a part of the UK to create jobs to be able to be working in and around something where people can really identify with, which is football and the football club. It’s a positive thing for the fans and for football generally,” he added.

Costa was a high-profile investment banker in London for decades, but since leaving the chairmanship of Lazards he has been focusing on investment management for high net worth individuals, most recently as co-chairman of Alvarium Investments, which has just merged with the Tiedmann group to form a $1.4 billion investment management group.

In 2018, he was appointed as special envoy to Saudi Arabia when the current prime minister was foreign secretary,  and has been involved in some of the big recent transactions between the Kingdom and the UK.

“I have been the special representative of the prime minister for the last three years and, coming to the end of that, I have been able to see the extraordinary depth of the commitment between the two countries.

“With Invesment Minister Lord Grimstone leading the initiatives here we have got a real opportunity of being able to see capital flowing — intellectual capital but also real capital, coming from the Kingdom into the UK and vice versa,” he said.

Costa cited the £20 billion investment by PIF into Britain as an example of the kind of transaction that is likely to come from a new spirit of partnership between the two countries. 

“It’s very good at the moment and of course there is a long history of good personal relationships between the people of the Kingdom and Britain,” he added.

Costa was active in the campaign to get Saudi Aramco to list on the London Stock Exchange, which was eventually dropped when the Saudi oil company decided to go for a purely domestic listing. But, with suggestions that more shares might be sold, he still believes the UK capital is the natural place, despite concerns by some investors about backing hydrocarbon-based businesses.

“I think that there is an investment case and London is the obvious place. It is the deepest capital market and it is the global capital market. So let’s hope for that,”

The new Alvarium Tiedmann group will list on a public stock market some time soon, Costa said. He is considering whether to set up a permanent office in the Middle East, and is looking at Riyadh as a possible location for a regional headquarters.

Costa is looking to tap into the huge funds which will change hands between generations in the next few years, which some experts believe will amount to $100 trillion worth of wealth in the US alone over the next decade.

“That’s very exciting because this next generation has really got their values clearly focused on being environmentally friendly and in particular inclusive capitalism and that makes a difference.

“This is a generation that not only sees these values but has actually got the financial capital to be able to affect these changes.”