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Market Update

Vodafone Merges India Unit with Idea, Deutsche Bank Plans 8 B Offering

Author: Sarla Buch
Last Update: 11:41 AM ET March 20 2017

4:00 PM Frankfurt Deutsche Bank net loss narrowed and the German bank plans to raise 8 billion in a rights offering. Finsbury Food net jumped on flat revenues. Unilever plans to sell Flora, Bertolli and Stork brands for 6 billion. Vodafone India unit and Idea Cellular are in $23 billion merger.

In London trading, FTSE 100 index slid 5.98 to 7,418.98 and in Frankfurt the DAX index fell 31.19 or 0.3% to 12,064.10.

In Paris, CAC 40 index decreased 5.37 to 5,023.87.

Deutsche Bank AG declined 3.4% to 17.25 after Germany-based commercial and investment bank said revenues in the year ending in December plunged 10.5% from a year ago to 30 billion.

Net loss in the year narrowed from a year ago to 1.4 billion from 6.8 billion and diluted earnings per share dropped to 1.21 from 5.06.

A solid capital base is essential if we are to succeed in our future strategy and capture growth opportunities for Deutsche Bank, chief executive officer John Cryan said.

Separately, the bank will launch rights issue for a total of 687.5 million shares at a price of 11.65 per share and the subscription ratio will be 2-for-1 to raise 8 billion or $8.6 billion.

The subscription rights are expected to trade on the German stock exchanges from March 21 through April 4 and on the New York Stock Exchange from tomorrow through March 31, 2017.

The lender forecasted group revenues in 2017 will be steady after strong start to the year in bond trading.

Finsbury Food Group Plc fell 0.5% to 112.40 pence after the U.K.-based bakery products maker said group revenues in the first-half ending in December were flat from a year ago to 156.6 million.

Net income in the period jumped 10.9% from a year ago to 6.1 million from 5.5 million and diluted earnings per share increased to 4.7 pence from 4.2 pence.

The bakery products maker said operating profit in the first-half advanced 4% to 8.3 million and operating profit margin increased 5.3% from 5.1% in a year ago period.

The baker added it secured a license for Mary Berry cake with a range of cakes launching in the second-half and new Artisan bread facility opened for retail and foodservice customers.

As of December 2016, net debt soared to 21 million from 0.9 million in the same period a year ago.

Unilever Plc gained 0.6% to 4,063.25 pence after the Sunday Times reported the U.K.-based consumer goods products maker reported intends to sell worth about 6 billion or $7.4 billion for its largest Flora margarine and Stork butter brands.

Private equity groups including CVC and Bain Capital plans to bid for a 6 billion the division.

Vodafone Group Plc slid 0.2% to 210.97 pence after the U.K.-based cell-phone operator and India-based rival Idea Cellular today agreed to merge India-unit in a $23.2 billion and create the largest wireless operator in India with 400 million customers.

After the merger, Vodafone and Idea, second and third largest operators in India, will surpass the market leader Bharti Airtel. The merger was prompted by the price Reliance Jio Infocomm Ltd

In a Mumbai, ""We are very complementary and Idea is strong where Vodafone is weaker, Vodafone is strong where Idea is weaker,"" Vodafone chief executive officer Vittorio Colao said.

Aditya Birla group, majority owner of Idea will own 26% of the merged entity and other shareholders will own the remaining 28.9% and after merger, Vodafone will control 45% stake.

The transaction is expected to close in fiscal 2018.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc