AT&T's Time Warner Deal Overcomes Final Hurdle, Spotify Launches In India, Fiscal Deficit Breaches Full-Year Target by 21.5% in 10 Months et al.

AT&T’s Time Warner deal overcomes final hurdle. Spotify officially launches In India. Fiscal deficit breaches full-year target by 21.5% in 10 months. RBI tightens compensation norms for private and foreign banks. Removes Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from PCA framework.

 

Now to Today's Top Business News Stories in Our End Of Day Wrap Up:

 

COMPANIES

 

Private equity firm True North in talks to buy 51% stake in Max Bupa from Max India. Investment Bank Wolet Capital sues Flipkart.

 

Changing Hands: Private equity firm True North is set to acquire Max India’s entire 51% stake in Max Bupa Health Insurance for over INR510cr. 

 

The proposed transaction is an all-cash deal, valuing Max Bupa at an enterprise value of INR1,001 cr. Britain-based Bupa, the joint venture partner in Max Bupa, will remain invested in the insurer.

 

Taken to Court: Wolet Capital, an investment bank specializing in US-India cross-border deals, has sued Flipkart, and its owner Walmart for failure to pay for its advisory services in the acquisition of Israel-based startup Upstream Commerce.

 

Wolet Capital has alleged breach of contract, unjust enrichment and other claims and has sought $800,000 in damages and costs.

 

Broken Promises: The suit states, Wolet Capital not only identified Israeli analytics startup Upstream as a potential acquisition target but also worked on the acquisition for several months based on express promises that it would be paid for its services if a transaction closed.

 

MACRO

Fiscal deficit breaches full-year target by 21.5% in 10 months. RBI tightens compensation norms for private and foreign banks. Removes Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from PCA framework.

 

Worse Than Expected: According to the data released by the Controller General of Accounts (CGA), the government’s fiscal deficit at the end of January stood at INR7.7tr - 21.5% more than the revised target of INR6.34tr on back of sluggish indirect tax collections. 

 

Failed Plans: The government had earlier pegged the deficit at INR6.24tr for FY2018-19 (3.3% of GDP), which was later revised upwards to INR6.34tr (3.4% of GDP) in the Interim Budget.

 

New Rules: The RBI has proposed a new set of rules around the compensation norms for senior officials of private and foreign banks, including whole time Directors and Chief Executive Officers. As per RBI’s discussion paper

  • Substantial portion of compensation i.e. at least 50%, should be variable (no threshold was prescribed earlier)
  • ESOPs to be included as a component of Variable Pay (excluded earlier)
  • Variable Pay is to be capped at 200 % of Fixed Pay (Earlier Variable Pay was capped at 70% of Fixed Pay but did not include ESOPs)

 

Banker Salaries: Is RBI being prudent or prescriptive? Read this article to know what the experts are saying. 

 

Out of the DoghouseFollowing an improvement in their financial ratios the RBI has decided to remove Allahabad Bank, Corporation Bank and Dhanlaxmi Bank out of Prompt Corrective Action (PCA) framework.

 

On the Rise: On the back of this move, shares of Dhanlaxmi Bank were up c. 10% to INR15.30, Allahabad Bank rose c. 6% to INR46.80 while Corporation Bank closed c. 4% higher at INR30.65.

 

ENTERTAINMENT

 

AT&T’s Time Warner deal overcomes final hurdle. Spotify officially launches In India.

 

Clear SkiesUS appeals court has rejected the Justice Department’s antitrust pleas against AT&T’s $80bn plus deal for Time Warner, citing that AT&T-Time Warner combination was unlikely to harm competition.

 

Fears: The government had earlier argued that even though AT&T and Time Warner weren’t direct rivals, their combination would form an integrated giant with the power to force higher pay-television prices.

 

New Market: Spotify, the world’s largest music streaming service, has launched its operations in India where it will compete against the likes of Gaana, JioSaavn, Airtel’s Wynk music and Apple Music in a bid to tap into the increasing number of online users in India. 

 

While Spotify can be used for streaming music for free, the company also offers a premium (ad-free) subscription for INR119 per month.

 

TELECOM

 

Telecom operators may join forces to take on Jio in optical fiber space.  Mukesh Ambani emerges as the 10th richest in the world. Sunil Mittal pushes for early rollout of 5G.

 

Looking for Partners: In a bid to take on Reliance Jio, Bharti Airtel has invited Vodafone Idea to partner in the independent optical fiber firm that it is putting in place.

 

The proposal, if accepted, would lead to the creation of the largest independent fiber company in the country.

 

Copy Cat: The proposal is designed on the same lines as Indus Towers where Vodafone and Idea Cellular have stakes.

 

Just Made It: Hurun Global Rich List 2019 has ranked Mukesh Ambani as the 10th richest person in the world with net worth of $54bn.

 

Wise Words: Bharti Airtel Chairman Sunil Mittal said that the government must facilitate early rollout of 5G in the country by pricing the spectrum at reasonable levels and lowering various levies.

 

GLOBAL

 

Theresa May offers MPs Brexit delay vote. House of Representatives votes to revoke Trump's border emergency

 

U-TurnBritish Prime Minister Theresa May on Tuesday told the MPs that they would get the last word on whether the UK leaves the EU without a deal, in case her agreement with the EU is rejected by parliament for a second time.

 

This move was widely interpreted as making it less likely that the UK would crash out of the bloc without a deal.

 

Key Dates: 

  • March 12, 2019: By March 12, UK lawmakers vote again on a new deal outlining the terms of the UK’s exit from the EU.
  •  March 13, 2019: If that Brexit bill is rejected, lawmakers vote on whether to leave the EU without an agreement.
  • March 14, 2019: If lawmakers reject a so-called no-deal Brexit, they will vote on whether to seek a delay to the U.K.'s separation from the EU.

 

Need Permission: To extend the Brexit deadline, Mrs. May would need to make a formal request to the other 27 EU states, which would need to agree unanimously to an extension.

 

The EndThe US House of Representatives have voted to block President Donald Trump's declaration of a national emergency along the U.S-Mexico border.

 

Trump recently declared a national emergency over the southern border after Congress passed a spending bill that appropriates $1.38b for 55 miles of barriers. This was significantly less than the $5.7b he had demanded.

 

Not Enough: Dissatisfied with the lower figure, Trump has said that he would pull together $6.7b from the military and other sources, without congressional authorization.

 

(Don't want to miss out on these End Of Week Wrap Ups? Subscribe Now to our No Nonsense Email Digest and get the day's Top 6 Business stories straight to your mailbox.)