🧐 Vodafone x Three merger under fire

Good morning. In today’s update - the telecoms mega-merger between Vodafone and Three is scrutinised by MPs, Aston Martin penned a “game-changing” deal with Lucid, Carnival shares tanked over surging costs and KPMG announced a 5% cut to its workforce.

Markets

• London stocks edged lower again on Monday as investors digested the aftermath of the weekend’s drama in Russia.

  • The FTSE 100 and FTSE 250 closed down 0.1% and 0.5% respectively.

• JP Morgan downgraded Lloyds (-0.9%), saying the bank was on the “frontline” of a hard landing in the UK.

• Defence giant BAE Systems (-2.1%) was also dragged lower by the short-lived coup in Russia.

Corporate News

Carnival shares tanked 12% on Monday after warning of increased costs driven by marketing and labour expenses; however, the cruise company also lowered its forecasted loss for the year as robust demand continued, even with higher ticket prices. (Link, Carnival)

HSBC is migrating from its iconic offices in Canary Wharf to a smaller space in the City, helping to reach its net zero commitments and providing more opportunities for flexible working; the bank’s preferred option is to take over a former BT office near St Paul’s Cathedral. (Link)

Shares in Bramaer dived 17% after it announced full-year results would be delayed due to an investigation into historic payments; the shipping company said BDO had been looking into £3m in payments between 2013 to 2017 and that shares would be suspended on July 3. (Link)

Cornish Lithium - one of a small number of companies looking to produce the metal in the UK - warned it requires £10m in funding by next month or it could be lights out; Chairman Ian Cockerill scathed at non-existent government support, despite a lack of local producers for the critical metal. (FT)

Deals

Vodafone’s £18bn merger with Three faced heavy scrutiny from MPs and trade unions over potential security risks relating to Hong Kong-based Hutchinson’s links to China; Robert Finnegan - CEO of Three - brushed off concerns by saying the business already operated in the UK. (Link)

Aston Martin ditched Mercedes in favour of Lucid Motors as the supplier of critical components for its electric vehicles; the £182m deal includes £79m in equity, with executive Chairman Lawrence Stroll calling the tie-up a “game changer” for the British carmaker. (Link)

In today’s VC update:

• TreasurySpring - an investment platform helping firms put excess cash to use - raised a £23m Series B funding round led by Balderton Capital. (Link)

• Actimed Therapeutics - a clinical-stage pharmaceutical company focussed on cancer cachexia - raised a £5m Series A round, with plans to raise a Series B later this year. (Link)

Economy / General

Jeremy Hunt threatened banks with an FCA-led regulatory crackdown should they fail to pass on increased interest rates to savers; the chancellor argued banks were taking “too long” to increase savings rates, despite hiking mortgage costs. (FT)

Below-average spending on the NHS has led to underperformance compared to other comparable nations, according to a study; the King’s Fund found that people in the UK are less likely to survive treatable conditions, potentially due to fewer staff and less equipment. (Link)

🌎 Global Snapshot

News

KPMG is set to slash 5% of its US workforce, just months after announcing job cuts to its advisory business; the new cost-cutting will include all areas of the business. US CEO Paul Knopp noted that whilst the pipeline was “strong”, the business faced economic headwinds “not unique” to the firm. (Link, FT)

Ryan Reynolds teamed up with private equity firm Redbird Capital and other investors to take a €200m stake in the Alpine Formula 1 team; the capital injection values the team at €900m and included participation from Otro Capital, Michael B. Jordan and writer (+ fellow Wrexham investor) Rob McElhenney. (Link)

US enterprise software firm Databricks sealed a $1.3bn deal for OpenAI competitor MosaicML; the San Francisco-based firm has developed a platform for organisations to train large language models, which Databricks will combine with its multi-cloud offerings. (Link)

Japanese semiconductor firm JSR has agreed to be acquired by a state-owned investment fund, signalling Japan’s intention to protect the key industry; Japan Investment Corporation’s bid values the firm at around $6.4bn - a healthy 36% premium to Friday’s closing price. (Link)

Markets

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