China approves Shell/BG merger
London's top flight index is seen starting five points lower than Friday’s close at 5,948.
Stocks to watch
Royal Dutch Shell said its planned £55bn merger with BG Group has received unconditional merger clearance from the Chinese Ministry of Commerce (“MOFCOM”).
The green light comes after similar approvals in Brazil, the EU and Australia. MOFCOM clearance marks the final pre-conditional approval required for the combination.
“We’re grateful to MOFCOM for its thorough and professional review of the recommended combination, and I am delighted we now have all the pre-conditional approvals needed to move to the next important phase,” said Shell CEO Ben van Beurden.
“This is a strategic deal that will make Shell a more profitable and resilient company in a world where oil and gas prices could remain lower for some time. We will now seek approval from both sets of shareholders as we move towards deal completion in early 2016.
Diageo has appointed Guinness Nigeria as its exclusive distributor of its international premium spirits brands.
The FTSE 100 drinks company announced on Monday that Guinness Nigeria, in which Diageo has a 54.3% shareholding, will become the exclusive distributor of its international premium spirits brands from 1 January 2016.
In the year ended 30 June 2015, Diageo's international premium spirits net sales in Nigeria were £20m.
Media company WPP has agreed to merge its Australian and New Zealand businesses with STW Communications Group and increase its shareholding from 23.6% to 61.5%.
The transaction will be structured through a contribution of WPP's Australian and New Zealand businesses into STW, for an enterprise value of A$512m, with consideration consisting of the issue to WPP of new STW shares and a shareholder loan.
In the press
Nationalising Rolls-Royce’s nuclear submarine business, which powers the UK’s Trident deterrent, is one option under consideration by the government should the crisis at Britain’s premier engineering group deepen. David Cameron’s office has had plans drawn up to protect UK interests as Rolls-Royce seeks to recover from five profit warnings in less than two years. Other scenarios include a merger of all or part of Rolls-Royce with BAE Systems, the UK’s biggest defence group. – Financial Times
Royal Bank of Scotland has become embroiled in another scandal after admitting that it was wrong to deny sitting on almost quarter of a million pounds of customer money. The troubled lender said it had now agreed to return cash to as many as 4,500 customers after apologising to them for the mistake. The controversy is a major blow to chief executive Ross McEwan, who has promised to return customer trust to the largely state-owned bank after a series of mis-selling scandals following on from a financial bailout in 2008. – Guardian
The beleaguered education giant Pearson faces a crisis in its British universities business after it imposed steep price rises on academic libraries. A string of leading universities have stopped buying the FTSE 100 company’s teaching materials in a row over charges for ebooks, The Daily Telegraph has learned. – Telegraph
US close
Stocks fell sharply as the slightest of hints from China that it might loosen the link between its currency and the US dollar sent oil crashing lower, weighing on the main equity benchmarks, emerging markets and high-yield US debt.
The Dow Jones Industrials slid 1.76% to 17,726.21, the S&P 500 by another 1.94% to hit 2012.37 and the Nasdaq Composite by 2.21% to 4,933.47.
MSCI´s Emerging Markets Index ended 5% lower for the week, the S&P 500 off by 3.8% - its worst week since last August - and the US Dollar Index advanced 2.3%.