Sainsbury’s-Asda merger in doubt over ‘extensive competition concerns’. Supermarkets will continue to press case after ‘fundamentally flawed’ CMA analysis. The merger between Sainsbury (J) (SBRY) and Asda has been thrown into serious doubt after Britain’s competition watchdog raised a catalogue of concerns, including higher prices and reduced quality and choice for customers. In a provisional verdict on the planned £10bn merger, the Competition and Markets Authority (CMA) said it had found “extensive competition concerns” as part of its investigation into the proposed deal. In a strongly worded statement, the CMA said the merger would create a “substantial lessening of competition at both a national and local level”. Its findings sent shares in Sainsbury’s down by 15%, to 245p and dragged down other grocers, with Morrisons dropping 4.6%. Asda is owned by the US retail giant Walmart.
A former Barclays (BARC) chairman has said he was unaware of documents detailing £280m worth of payments to the bank’s Qatari investors in 2008 that is at the centre of a fraud trial in London. Lead prosecutors for the Serious Fraud Office (SFO) questioned Marcus Agius over his knowledge of a key document from 31 October that year, detailing the payment terms of an advisory services agreement that would result in the bank paying £280m to the Qataris. “Absolutely not … I saw this document for the first time some years afterward,” Agius told a jury at Southwark crown court on Wednesday. “Not only did I not see this document, I was not aware of its existence.” The SFO’s lead prosecutor, Edward Brown QC, went on to ask whether the former chairman was aware of how it was negotiated or how the figure was arrived at. To both questions, Agius answered “no”.
Glencore to limit coal production after pressure from investors. Church of England among shareholders who pushed for environmental decision. The commodities trader Glencore has bowed to pressure from shareholders, including the Church of England, to limit coal production for environmental reasons – days after reporting that it produced nearly 130m tonnes of the fossil fuel last year. The Switzerland-based firm, whose oil-trading operation is based in London, laid out plans to improve its environmental record, including a review of its membership of trade bodies it fears may be undermining the international Paris climate agreement. Glencore, which is Australia’s biggest miner of coal, said it was responding to concern within the investment community. The Church of England, which is understood to have a stake worth just under £10m in the group, welcomed the announcement.
Lloyds bullish over Brexit as £4bn payout to investors unveiled. Bank set aside £750m in 2018 for further PPI claims, taking total provision pot to £19.4bn. Lloyds Banking Group (LLOY) has shrugged off growing fears over Brexit as it unveiled a £4bn payout to shareholders, despite reporting smaller-than-expected annual profits. Britain’s biggest high street bank, which operates one out of five of the country’s branches, reported a 24% rise in net profits to £4.4bn for 2018, below the £4.6bn forecast by analysts. Statutory profit before tax was up 13% to £6bn. Its chief financial officer, George Culmer, denied the bank was being complacent about economic conditions, as it lifted its dividend by 5% to 3.21p a share and announced a share buyback of up to £1.75bn, taking the total payout to £4bn.
Fear of Barclays executive pay cuts prompted Qatari deal, court hears. Former chairman says ability to offer board ‘competitive rates’ would have been compromised by UK bailout. Barclays (BARC) board worried that executive pay would be cut if the lender failed to raise private funds and succumbed to a government bailout at the height of the 2008 crash, the lender’s former chairman told a court on Tuesday. Marcus Agius is the first senior Barclays board member to be questioned during the trial at Southwark crown court in central London. Agius, wearing a dark grey suit and blue tie, was questioned by the Serious Fraud Office’s lead prosecutors for nearly five hours over the bank’s £11bn emergency fundraising in 2008. Lead prosecutor Edward Brown QC asked the former chairman to provide details about a board meeting held in early October that year, just as the UK government was preparing to bail out Barclays’ high street peers Royal Bank of Scotland and Lloyds TSB.
Success of vegan sausage roll gives Greggs (GRG) surge in sales. Bakery chain upgrades profit expectations for third time in three months. Greggs has credited the fanfare of publicity around its vegan sausage rolls for a surge in sales that has sent the value of the company to an all-time high. The UK’s biggest bakery chain said it had made “an exceptionally strong start to 2019” with sales climbing nearly 10% in the seven weeks to 16 February. The Quorn-filled vegan alternative to the traditional meat pastry – which was developed after 20,000 people signed an online petition organised by animal welfare group Peta that called on the baker to produce a vegan version of its bestselling item – went on sale on 3 January. It had taken more than a year to perfect and its launch coincided with Veganuary, a growing movement that encourages people to try plant-based diets during January.
HSBC warns of weak global economic outlook. Bank’s revenue down 8% as CEO blames Chinese slowdown, trade tensions and Brexit. HSBC Holdings (HSBA) has warned about a weaker global economic outlook, as the slowdown in China, trade tensions and fears around Brexit hit its revenues towards the end of the year. Europe’s biggest bank reported a 16% rise in 2018 profits to $19.9bn (£15.4bn), disappointing the City, where analysts had been expecting nearer $22bn. Revenues in the fourth quarter, which was marked by turmoil in global financial markets, fell 8% from the previous quarter. In Asia, profits grew 16% to $17.8bn – nearly 90% of the total. HSBC said it had increased its impairment provision by $165m to cover credit losses related to the economic uncertainty around Brexit. Its chief financial officer, Ewen Stevenson, said this reflected the increased risk of a hard Brexit, and that government contracting, high street retailers and some restaurant chains were particularly vulnerable to the UK crashing of the EU without a deal.
