FTSE 100 movers: Glaxo rallies on Pfizer tie-up; Royal Mail retreats
London's FTSE 100 was up 0.7% at 6,748.31 in afternoon trade on Wednesday as investors eyed the latest Fed policy announcement.
GlaxoSmithKline was the standout gainer after agreeing a deal with Pfizer to combine their consumer health businesses into a joint venture generating £10bn of annual sales, before spinning it off as a separately listed company within three years.
GSK, which will have controlling stake of 68%, said the combination of the two businesses is expected to generate annual cost savings of £0.5bn by 2022 at a cash cost of £0.9bn and non-cash costs of £0.3bn.
Housebuilder Berkeley Group was also on the rise, recovering from recent weakness in the sector.
Sports betting and gaming group GVC Holdings pushed higher as the government’s £2 limit on fixed-odds betting terminals kicked in, meaning it avoids a £676m payment over its takeover of Ladbrokes Coral.
On the downside, Royal Mail retreated after US parcel delivery company FedEx downgraded its outlook for the full year and warned that global trade has slowed in recent months, with leading indicators pointing to ongoing deceleration in global trade in the near term.
Direct Line was also in the red following a report that it is mulling a £400m move on Legal & General's general insurance arm. According to Sky News, Direct Line's interest is at an early stage and a number of other insurance and investment firms are considering a possible bid.
FTSE 100 - Risers
GlaxoSmithKline (GSK) 1,532.40p 5.81%
Melrose Industries (MRO) 162.00p 3.95%
Evraz (EVR) 477.90p 3.44%
Berkeley Group Holdings (The) (BKG) 3,424.00p 2.45%
Just Eat (JE.) 591.40p 2.32%
WPP (WPP) 888.80p 2.09%
Croda International (CRDA) 4,700.00p 2.02%
Rio Tinto (RIO) 3,804.82p 1.95%
National Grid (NG.) 773.50p 1.95%
GVC Holdings (GVC) 709.00p 1.94%
FTSE 100 - Fallers
Smurfit Kappa Group (SKG) 1,976.00p -2.76%
Randgold Resources Ltd. (RRS) 6,728.00p -2.29%
Royal Mail (RMG) 280.80p -2.09%
Direct Line Insurance Group (DLG) 302.80p -0.95%
Aviva (AV.) 367.30p -0.92%
Smiths Group (SMIN) 1,396.00p -0.85%
Associated British Foods (ABF) 2,107.00p -0.85%
British American Tobacco (BATS) 2,553.00p -0.82%
BAE Systems (BA.) 454.30p -0.79%
Smith (DS) (SMDS) 299.35p -0.75%