icon-cookie
The website uses cookies to optimize your user experience. Using this website grants us the permission to collect certain information essential to the provision of our services to you, but you may change the cookie settings within your browser any time you wish. Learn more
I agree
blank_error__heading
blank_error__body
Text direction?

Business this week

Having sweetened its offer, British American Tobacco secured a deal to gain full control of Reynolds for $49bn, creating the world’s biggest listed cigarette company. Reynolds is based in the American market, which is again looking alluring after years of costly litigation and falling demand. The volume of cigarettes sold in America has fallen sharply in the past decade, but overall retail sales in the industry have risen thanks to population growth and new products, such as e-cigarettes. See article

That vision thing

Get our daily newsletter

Upgrade your inbox and get our Daily Dispatch and Editor's Picks.

Luxottica, an Italian maker of fashionable eyeware, agreed to merge with Essilor, a French company that produces lenses. The €46bn ($49bn) transaction is one of the biggest cross-border deals in the EU to date. The merger had long been resisted by Luxottica’s founder, Leonardo Del Vecchio, who built his firm up into a global behemoth that owns the Oakley and Ray-Ban brands and supplies designer frames for Chanel, Prada and others. See article

In a vindication of the strategy pursued by Britain’s Serious Fraud Office, Rolls-Royce settled claims dating from 1989 to 2013 that it had bribed officials in various countries in order to win contracts. The engineering company will pay penalties totalling £671m ($809m) to regulators in America, Brazil and Britain. Most of that goes to the SFO, which pushed for a deferred prosecution agreement, still a novel concept under British law. See article

Fiat Chrysler Automobiles’ share price was left bruised by an allegation from America’s Environmental Protection Agency that it had used software in 104,000 diesel cars to let them exceed legal limits on nitrogen-oxide emissions. The EPA did not go as far as to say that FCA had cheated in emissions tests; that transgression has cost Volkswagen billions in fines. FCA strongly denied the claim; its boss, Sergio Marchionne, said “We don’t belong to a class of criminals.”

Consumer prices in Britain rose by 1.6% in December, a big bounce from 1.2% in November and the highest figure for two years. Costlier transport contributed to the spike. Rising inflation is an unwelcome conundrum for the Bank of England. Its governor, Mark Carney, noted that higher prices could dampen consumer spending and slow economic growth, meaning future interest-rate decisions might move “in either direction”.

In South Korea a court rejected prosecutors’ request to arrest Lee Jae-yong, the vice-chairman of Samsung Electronics, on allegations of bribery related to an influence-peddling scandal that has rocked the country. Prosecutors allege that money paid by Mr Lee to a friend of South Korea’s president was intended as a bribe to help win a merger of two Samsung affiliates. Mr Lee denies that. The prosecutors are still pressing their case. See article

America’s Federal Trade Commission lodged an antitrust lawsuit against Qualcomm, accusing it of abusing its commanding position in the semiconductor market to impose stringent licensing terms on patents for chips in mobile phones.

Another profit warning from Pearson caused itsshare price to plunge by 30%. The academic publisher is facing a decline in demand for its textbooks in America, partly because of the rise of services that let students rent the books.

A surge in trading after the election of Donald Trump helped America’s big banks reap big profits in the fourth quarter. Many investors adjusted their portfolios when Mr Trump’s victory heightened expectations of interest-rate rise and of cuts in regulations and taxes.

SpaceX sent its first rocket into orbit since an explosion on a launch pad last September grounded its fleet. The government has accepted the company’s report on the accident, allowing it to start clearing its backlog of satellite launches for fee-paying customers and cargo missions to the International Space Station.

Reversal of fortunes

ExxonMobil agreed to pay $6.6bn for several oil firms owned by the Bass family in Fort Worth, the latest in a flurry of deals to snap up energy assets in Texas as oil prices rebound. Meanwhile, Saudi Arabia said it would soon start accepting tenders for an expansion of solar and wind power in the country that will cost up to $50bn. The collapse of the oil price two years ago tore a hole in the kingdom’s finances. It now hopes to get 30% of its power from renewables by 2030.

China’s footballing authorities capped the number of foreign players that clubs can field in a match to three per team, down from five, as part of a series of measures to foster the development of local Chinese talent. The news came as Xi Jinping, China’s president, extolled the virtues of globalisation at the annual gabfest at Davos.

Measure
Measure
Related Notes
Get a free MyMarkup account to save this article and view it later on any device.
Create account

End User License Agreement