Heineken wins support of Thai billionaire for Tiger bid

Dutch brewer Heineken has ended the stand-off over control of the maker of Tiger beer, by garnering the support of a Thai billionaire.

Charoen Sirivadhanabhakdi's ThaiBev and TCC Assets have agreed to back the sale of Singapore-based Fraser and Neave's (F&N) stake in Asia Pacific Breweries (APB) to Heineken.

Heineken has offered 5.6bn Singapore dollars ($4.6bn; £2.8bn).

Analysts said chances of Heineken's bid being accepted by F&N were now higher.

The news sent Heineken's shares as much as 5.4% higher in morning trading.

"Thai tycoon Charoen has backed down and handed Heineken a free passage to takeover APB," said Justin Harper from IG Markets in Singapore in a note to clients.

"While he pursues the acquisition of its joint parent company Fraser & Neave."

Last week, Mr Sirivadhanabhakdi, whose companies own about 30% of F&N, made an offer to acquire the rest for almost S$9bn.

It was the latest escalation after months of a bidding war for the assets.

In a joint statement Tuesday, the companies said Heineken will not make an offer for shares in F&N.

Analysts said the two parties appeared to have reached a settlement to prevent the deals costing more for both.

"It could be a win-win for everyone involved. Heineken gets its prized asset of APB, the Thais get a good price which will help fund their takeover of F&N," said Mr Harper.

The board of F&N has already given its approval for the Heineken bid. The shareholders will meet to vote on 28 September

EADS-BAE merger faces major hurdles

During times of economic hardship, mergers between major companies are often motivated by a desire to cut costs.

Not so the proposed merger between European aerospace firm EADS and UK defence contractor BAE Systems.

Both firms are anchored firmly in Europe's industrial landscape, where between them they employ some 220,000 people, often in highly skilled jobs.

Hence, their roles as economic contributors and drivers of technological innovation are often hailed by politicians.

Safeguarding jobs

The fact there are relatively few overlaps between the two companies should make a merger palatable for voters, and thus to politicians scrutinising the implications.

Industry analysts say rather than posing a major threat to European jobs and investment, a merger would have the potential to safeguard many jobs

At a time when the defence industry is coming under increasing pressure, as ever more countries cut their defence budgets, the boom in commercial aviation enjoyed by EADS's dominant Airbus division could help balance the business.

As such, a combined EADS-BAE would tower over the competition as the world's largest aerospace and defence company, carefully balanced with one leg in each cyclical sector.

"A merger would allow EADS to achieve its aim of balancing civil aerospace... with non-Airbus activities," according to Citigroup analysts.

US market access

In a similar balancing act, a return to civil aviation might be an appealing prospect for BAE.

But for EADS, there is an even more persuasive reason why a tie-up could prove advantageous.

As the world's fourth largest defence firm, BAE has built up a notable presence in the US in recent years, much of it through the acquisition of smaller US defence firms, though it has also used the so-called "special relationship" between the US and the UK to full effect.

Efforts by EADS to do the same have come to little, so a deal with BAE could offer instant access to the US market for defence spending

EADS boss says serious work needed to pass BAE deal

The chief executive of EADS has said its proposed tie-up with BAE Systems represents a "perfect fit" but that there is "serious work" ahead to convince investors of its value.

Tom Enders' thoughts were given in a letter to 136,000 EADS employees, including 17,000 in the UK.

Politicians are also looking closely at the planned merger, which would create the world's largest defence company.

On Monday, France's finance minister said the idea needed close scrutiny.

Pierre Moscovici said the tie-up raised a lot of questions over strategic interests and "industrial effects".

In his letter, Mr Enders said that "governance and national security interests are currently the focus of our work".

"We are currently in constructive and advanced discussions with all relevant governments and are trying to accommodate their concerns and national security interests..."

Struggle

But Mr Enders acknowledged there may be a struggle ahead to get support for the deal: "No doubt, we have some serious work to do - and that goes particularly for our investor relations teams - to convince shareholders and investors that we are on track to build a stronger growth platform."

He said the discussions with BAE Systems were "not the result of top management gone haywire".

The announcement of the deal sparked a rise in BAE's share price but a fall in EADS's.

Mr Enders said this was simply because investors had been "taken by surprise".

The letter said the proposal would enable the firm to reach its goals seven years earlier than planned.

One of these is to increase its global markets.

But he implied there were unlikely to be job losses as a result of a successful tie-up.

In terms of the impact on staff and sites he said the two companies were "largely complimentary and have very little overlap".

But he said that in the defence industry, internationalisation "is a must", something that combining with BAE Systems - which he called the world's most international defence company - would provide.

He finished by saying that while there had been some critical reactions to the deal "word will soon go around, that this deal makes good business sense".

Under the code of the UK's Takeover Panel, the deadline to finalise the details of the deal is 17:00 BST on 10 October

Barclays scandal: Key players

The Barclays rate-fixing scandal has forced a number of high-level resignations and questions are now being asked about how widespread the practice was, and whether the Bank of England and senior Whitehall figures knew what was happening.

Key players
Name	Most recent job/position	Connection to rate-fixing scandal
Bob Diamond	Chief executive, Barclays	Mr Diamond said he was stepping down because external pressure on the bank risked "damaging the franchise". Barclays released Mr Diamond's note of a conversation at the end of October 2008 with the Bank of England's Paul Tucker, after which the bank's Libor postings fell. He has been succeeded as chief executive by Antony Jenkins.
Marcus Agius	Chairman, Barclays	Mr Agius said the bank's behaviour was unacceptable, but as chairman the buck stopped with him and he should stand aside. He has been replaced by Sir David Walker, a respected banker who led the 2009 government inquiry into the rules governing how banks are run.
Jerry del Missier	Chief operating officer, Barclays	One of the most senior executives at Barclays who gave instructions to lower Libor rates after being told of the phone call between Mr Diamond and Paul Tucker. Told MPs he was only acting on instructions. Resigned after Barclays revealed his role.
Paul Tucker	Deputy governor, Bank of England	Mr Diamond's notes show Mr Tucker called him to say "senior Whitehall figures" were asking why Barclays was always towards the top end of Libor pricing. When told not all banks were providing accurate quotes, Mr Tucker is said to have replied: "Oh, that would be worse". Says he did not lean on Barclays to reduce its rates and was not asked by the government to do so.
Sir Jeremy Heywood	Cabinet secretary	Paul Tucker told the Treasury Select Committee that one of the senior Whitehall officials was Sir Jeremy Heywood. The two exchanged emails at the height of the financial crisis in October 2008, in which Sir Jeremy expressed government concern about why Barclays' Libor rates were so high.
Lord Turner	Chairman, Financial Services Authority (FSA)	The Financial Services Authority investigated the Libor manipulation at Barclays and continues to look into what happened at other banks. Barclays staff contacted the FSA in 2007 and 2008 to tell them the bank's Libor submissions were wrong. As a result, the regulator is accused of being "asleep at the wheel".
Sir Mervyn King	Governor, Bank of England	Sir Mervyn faces accusations of ignoring warnings from the New York Federal Reserve back in 2008 about problems with Libor. Sir Mervyn says there was no evidence of wrongdoing at the time. After the scandal broke, he and Lord Turner made it clear to Barclays that Bob Diamond should stand down, not Mr Agius.
David Green QC	Director, Serious Fraud Office	The SFO is considering whether to bring criminal charges against individuals who tried to manipulate Libor. Mr Green is under pressure to bring successful criminal prosecutions, especially given criticism of the SFO's conviction rates and concerns that fines from regulators do not go far enough.

FSA: Bob Diamond concerns raised with Barclays in 2010

The UK's financial regulator has said it warned Barclays two years ago that Bob Diamond could prove unsuitable to become chief executive of the bank.

Newly-published letters reveal that the Financial Services Authority felt its Libor rate-rigging investigation could affect the appointment.

The FSA said it could not prejudge the appointment, but reserved the right to "reassess his suitability".

Mr Diamond resigned in July over claims Barclays' traders tried to rig Libor.

The letters were disclosed by the Commons' Treasury Committee, which has taken evidence on the Libor affair from Barclays, the FSA and the Bank of England.

According to a FSA file note, there was a meeting on 15 September 2010 between the regulator's chief, Hector Sants, and Barclays' then chairman, Marcus Agius.

At this meeting, the FSA says it told Mr Agius that the continuing Libor investigation could have a bearing on the bank's decision to appoint Mr Diamond.

However, Mr Diamond had already been named chief executive of the bank and took up the post in January 2011.

In a letter sent to committee chairman Andrew Tyrie on 20 August 2012, Mr Sants writes: "The FSA was fully aware that the ongoing investigation might come to conclusions which would be relevant to Mr Diamond's suitability.

"However, at the time, since the investigation was not concluded, it would not have been appropriate to prejudge its outcome."

Referring to the meeting with Mr Agius, Mr Sants continues: "I specifically made clear that we reserved the right to re-assess his [Mr Diamond] suitability in the light of the conclusions reached by this investigation and requested he make this clear to Mr Diamond.

'At variance'

"Secondly, I would like to record that in that conversation, I made clear that our concerns about Barclays' culture were not some generic observation but specific to Barclays, and asked that these concerns be communicated by Mr Agius to Mr Diamond. Mr Agius confirmed that he would do this."

The information appears to be at odds with comments by Mr Agius, who has said that the FSA did not cast doubt on Mr Diamond's appointment during the meeting.

In his reply to Mr Sants' letter, Mr Tyrie notes that FSA worries that Barclays' culture problems were "specific" not "generic" was also "at variance with the impression we received from Mr Agius".

Mr Diamond resigned after Barclays was fined more than £290m for rigging Libor benchmark interest rates