Tesla, UAE deal, Deliveroo: your commercial news round-up
updated on 25 March 2021
Commercial awareness isn’t just about reading the news. It’s about picking out a story that is interesting to you, whether that’s an acquisition, a business merger or perhaps a restructuring, and following it through from start to finish. Pick the story apart and analyse it – understanding why two businesses have merged, for example, is crucial to your commercial acumen. Good luck!
- Bitcoin can now be used to buy Tesla cars, the company’s chief Elon Musk revealed in a tweet on Wednesday. The electric car giant has bought £1.1 billion worth of Bitcoin, which saw the cryptocurrency’s value soar to a record high, with Musk’s announcement on Wednesday also bumping its price. Musk explained: "Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat [government-controlled] currency".
- An investment deal potentially worth £5 billion has been signed by the UK and the United Arab Emirates (UAE), initially committing the gulf nation to spend £800 million in British life sciences. An additional £200 million will be invested by the UK government to bring the total initial investment to £1 billion. Other UK industries are likely to benefit from the deal, which will include similar investments up until 2026. The UK and UAE are yet to disclose the agreement’s total value.
- An “enhanced trade deal” between the UK and Canada is due to be announced, following the recent ratification of a post-Brexit trade agreement by the two nations, according to Trade Secretary Liz Truss. The UK is also currently in talks with New Zealand and the US regarding “enhanced trade deals”.
- Meanwhile, tougher restrictions on covid-19 vaccine shipments to the UK have been developed by the EU and will be put before EU leaders today. Ursula Von der Leyen, the European Commission president, explained that the shipment of vaccines to the UK will now be on a “reciprocity and proportionality” basis.
- In retail news, department store John Lewis has revealed its intentions to permanently close another eight stores, putting nearly 1,500 jobs at risk. The decision comes after the partnership, including Waitrose supermarkets, reported an annual loss of £517 million. Tour operator TUI is also set to close 48 additional UK-based retail stores. The 273 members of staff affected by the decision will be offered alternative roles in other stores.
- Deliveroo is aiming for a market capitalisation of around £9 billion via its initial public offering and has set its share price between £3.90 to £4.60. The online food delivery service has experienced high demand during lockdown, with continued strong performance reported for January and February 2021 as order values more than doubled. Meanwhile, Amazon has revealed that it will reduce its shares in Deliveroo by 5% when the company goes public. After selling 23.3 million shares, Amazon’s holding in the delivery giant will have reduced from 15.8% to 11.5%, which remains a significant stake.
- Grenade, a UK sports nutrition brand, is set to be acquired by US snacks maker Mondelez as it aims to broaden its offering with a focus on nutritious eating. Confectionary giant Cadbury’s also sits as a subsidiary under Mondelez, as well as Oreo, Ritz crackers and Toblerone. Mondelez’s move to acquire more nutritious snack brands comes as “Performance nutrition and low sugar options are becoming mainstream”, according to Clive Jones, president for northern Europe at Mondelez.
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