tv On the Move Bloomberg November 11, 2015 3:00am-4:01am EST
sabmiller. power failure. the country's largest utility reports a drop in profits. ok, that is what we are watching. big issues. there will be u.k. data to watch at 9:00 a.m. london time. european equity markets opening a little higher. let's can do near a test let's jra.to -- let's get to ne been a- nejra: there has slow start to the week. we have mixed data from china. the ftse 100 opening almost .2% higher. cac 40 just over .2% higher. we are still waiting for the dax to open. we've got a couple of big german companies reporting today.
at the moment, not seeing any huge gains across europe. we'll see how that continues as the trade settles. the bigve a look at movie spirit starting with kohlberg. the world's biggest brewer in russia. the market has been a challenge for this company. it continues to be at what we saw today is earnings coming in just a little bit better than expected. the headline really is carlsbad cutting out 2000 jobs. .hat is 15% cutting costs to compete with more profitable rivals, e.on. falling at 30%. biggest net loss since 2000. a cannot say with the long-term effects are.
get straight to the breaking news. we have a confirmation. bear -- let's bring ryan into the conversation. quite a premium to go into it. ryan: it is the announcement of a packed. buybeth making an effort to sabmiller. 44 bucks afering share. events.nteresting abn beth in the united states. they touch every country in the entire world. if this deal goes through if it is completed, then they would have a 30% share of the world's
bear market just extraordinary. as the acquired company has agreed to sell its interests and miller coors. this is the second-largest brewer in the united states. the reason they announced their selling it is because the regulators would not have allowed them to hold onto it. the markets 45% of share. miller coors another 27%. they would have a whopping 70%. no one was going to let that slide. announcement.uble we got ab inbev going forward with the announcement to buy sabmiller. this is a very large, complex
deal. interesting to watch. manus: thank you, ryan. i've got to give you a correction on the line of this deal. it was 44 pounds a share. not $44. a quick correction on the original breaking headline. pounds. let's bring in ashok shah. ryan london capitals -- broke down the data. what you make of this? this trait is a beast of brewing. ashok: of course it is. they will get through because of the underlying need of consolidation is as strong as ever. the industry has slowed down. the growth rate is getting through. the companies were relying on the growth in the emerging economies.
we have seen a slowdown in the last 12 months. the slowdown is going to continue. that means they have to try and get synergy into the cost-cutting program. there will be a lot more of that consolidation, cost-cutting. manus: this is the critical point when we look back at some of the reports. anheuser-busch has a history. they are the rottweilers of cost-cutting. their ability just trumps everybody outside of the market. that is the critical thing. an repetition -- they have a reputation. they doubled their margin over 32.5%. i think the underlying problem is businesses are
struggling because of the huge exposure into places like rozelle -- places like brazil. under fromhave been it is pressure. -- under tremendous pressure. you got the heat on the fx. that means the only way you can stabilize the business if you go through rationalization and cost-cutting. manus: there was a great article this morning that made the point that they are not going to be able to achieve the levels of ripping costs out of sabmiller because it is already well run. there is a big cultural difference. we written about it. bloomberg. have seen some huge megadeals come undone because of the culture clash. [indiscernible]
it takes a long time for big companies to merge and then reorganize, rationalize. manus: you are with me for the next 30 minutes. we've got a lot more to get through their. ashok shah with on the move. let's re-gear up. let's talk about china. it is rebalancing. the world's second-biggest economy saw a match to the week's game. sales same time, retail inthat is before we factor single day shop-athon. let's get straight to china. we're going to talk to mh i in a moment here it -- moment. i've read it as the -- i read it as the perfect rebalancing act. there is a rebalancing come --
rebalancing going on. the industrial side, the heavy lifting side of china is under pressure. enda: you have just summed it up there in a nutshell. although rebalancing is happening, it is not enough to fill the gap by the heavy industry. sure, consumers are doing well. consumption is rising here it -- rising. convulsion surrounding the you want, yet the consumers are buying. not enough to fill the whole that is being left. that is where the balancing act comes into it. manus: did you buy anything from alibaba? enda: i did not have an opportunity, but maybe next year
here at manus: -- next year. manus: we only reiterate the wisdom that you give to us on a daily basis. that's shift our attention and talk about signal day. racingjoined by home today to see what you want me. spectacular numbers. -- heyhey there, manna there, manus. out about a $10 billion in saw $10ions -- ali baba billion in transactions. we don't know if they can keep it up but we are going to be watching. they goes to show they have broken last year's record. we got a chance to sit down with mike evans, president of ali baba. this is the guy they brought in from goldman sachs to make sure their global expansion happens.
he wants to be -- he wants to see the 2% of revenue from international. ofhe wants to see 50% revenue from international. that is a place where amazon dominates. i asked him how he is good to take on amazon. >> our strategy is not about competing with amazon. small companies that we have invested in our less about finding the investment opportunities and much more focused on starting to learn about the mystic mart -- domestic market. emily: we have seen ali baba invest in smaller companies. we asked what that means. he said those investments are about learning. there interested and cross commerce. acrossrce that happens
borders. can it get to 50% of international? -- can they get to 50% of international? manus: it is all about that internationalization. the market has reevaluated over the past year what is ali baba. what can they grow by? what can the profit grew by? let's talk about its stock. is aday, some would say day for them to disprove the theory that we had people moments. that's had peak moments. had moments. emily: alibaba has to prove this is something that investors can count on for the long haul. i asked mike evans a question about that. how do you explain the lack of investor confidence? he said he doesn't think
investors don't have confidence. i think they are some questions about the health of the chinese economy. yes, it is slowing down a little bit, but there are still hundreds of millions of people here who need to buy stuff. i talked to him more specifically on how he intends to make this happen. to make this growth global. take a listen. ,> the things i am focused on prioritized leaders and markets. china.me outside of russia, brazil and australia, new zealand. those are markets that have consumers that want to buy products produced in china. emily: now, manus, it remains to be seen how much international and global growth they can see. there are more national brands participating. today, you got apple, disney, lego.
they have been some of the most popular products. people have been lot -- have been buying a lot of groceries. it is an uphill slide for ali baba. mental i cannot wait for that interview. -- manus: i cannot wait for that interview. emily chang in beijing. there is going to be sitting down with jack bob. that interview comes at 2:30 london time with emily herself. funder and chief executive, jack ma. it is official, 44 pounds a share. are going to bring you the latest details on the megamerger , ab inbev.r what does it mean for your beer? ♪
manus: i am manus cranny in london. making his story. the big news story. ab inbev has made a formal offer to sabmiller 444 pounds a share in cash. it will create the world's largest brewer. it had agreed to sell to its miller's course stakes to -- miller course stakes to molson coors. we were chatting about the
anheuser-busch in the story, they talk about $1.4 billion of synergies. i suck, i can see from my notes we're talking 1.5 ian dollars. we know there is going to be competitiveness. china is an important market as well. when we look at the global presence for them between china and the united states. where do you think the biggest antitrust issues are going to come. ashok: u.s. and china are the biggest places where they have to go and sort out -- they have to placate the regulators. toe some commitment, not pricing. it takes time to negotiate through. i think the biggest growth opportunities are china as opposed to the u.s.. this is a much more mature market. they will put a lot more
emphasis and make sure they get it right in china. manus: up to me about china, because if you look at the headlines, industrial production , the slowest since the year 2000. that has major ramifications for us in europe. it has major ramifications for metals miners. it is doing what using ping that wants it is doing what xi jinping wants. is switching into a much more service oriented group. on the other side, the expert side remains difficult with the slowdown in asia-pacific. in emerging markets. the expert cycles are slowing. the world growth numbers are not growing as you pointed out. that means the expert side of the chinese equation will remain under pressure. it is not going to governor herbert.
if anything, it might slowdown a bit -- it is not going to pick up in a hurry. if anything, it is going to slow down a bit. cruise. was are concerning big part of the services growth. the banking and marginal lending to the stock. that is going to dissipate and i think they have to find other on the services side. that: you can see divergent. aboute talking to emily -- great story there. ali baba. do you own any ali baba? you have any perspective? ashok: our photo process does
not allow us to pick it up because it is a high risk stock. interestedle are about the international expansion. the real key is the domestic side of the occasion -- of the equation. be first the chance to in the market share and grow the market itself. access to internet increases in china, that is how it is going to happen. ashok, always good to get your effective. ashok shah, from london capital. up next, a glimmer of hope for the uk's biggest supermarket industry.
$1.4 billion as we dig into that story, a little bit more, we will bring that to you. putting those two companies together. savings to deliver cost over the next three years. that is came this morning as -- it be estimate. let's bring in charles allen. when look at these numbers, what does it say to you? when we were chatting, you said this is sainsbury's doing business. charles: consumers want prices. they want a simple low price. it retailers, that means makes it easier to do business in a simple way. you put products on the shelf.
yes slightly fewer products. you have a focus range. manus: are we segregating how we shop? is there a desperation? are we becoming more disparate and how we shop? charles: we are shopping more frequently. people who do not want to do the single big shopping event the way a lot of stuff at the end of the week. people watch him to buy what they actually need and not throw away so much. people are shopping more frequently which is why convenience stores have continued to outperform. manus: the cfo says it is what -- itdifficult for them is going to be difficult to say if profits are going to keep falling. charles: the food prices are going to continue to fall at a
slower rate than they were. the guidance that gave q2 trading statement and the results they announced today. the profits should be roughly flat in the second half, year on year. that would imply that maybe they are marching down a little bit but generally staying stable. manus: the chinese gives us a new anniversary to commemorate. -- emily is there for the holly baba -- four ali baba. it has an international team this year. a number of european process. it's a way of testing the chinese markets without the expense of opening stores which is pretty expensive for someone like tesco.
and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
manus: welcome back. this is on the move. 30 minutes into the trading day. let's see how things are shaping up. the rally has resumed. stocks 600 up by .5%. interesting news. carlsberg rising. this is the world fourth-largest brewer. ,t is the anheuser-busch deal proposing to buy sabmiller. $4 billion of synergies. also to deny. they've got profit guidance
which was bigger than expected. equity markets are beginning to rally again. itt does that mean, will invoke the spirit of more stimulus from the chinese? equity markets rising good let's have a look at the foreign exchange board for you. we'll look at the fx market later. stocks up. let's check out the individual names. nara check is at the board. the biggest gainer on the stocks 600. this is a company that had that cyber attack three weeks ago. the stocks have been hit since then. expect the financial impact to 35 million pounds this fiscal year. it also said it is on target to meet analyst estimates this year. too early to say if it will reach longer-term goals. that is talk talk. moving onto carlsberg. .he biggest brewer in russia
it is going to cut 2000 jobs. what the company is trying to do is cut cost to compete with more profitable rivals. talking about ab inbev and sabmiller. moving on to sabmiller, it is not one of the biggest gainers, what it's stocks have hit its -- has had its highest level since 1999. ab inbev has agreed to pay 44 pounds per share. a company controlling half of the industry's profits. back to you manus. manus: thank you very much. protecting your data. it is critical at the moment. from the undesirables. talk talk has been hit by cyber attackers. there brought charges against suspects accused of running huge hacking schemes against j.p. morgan. who do you turn to?
one of those companies is's is sophos.ompanies the share price has responded up over 6%. we have the ceo. kris hagerman, i welcome you. the market is happy. you are finding investors delighted. this uplift, where does it come from? kris: we are a leader and one of the largest sectors and all i.t. $35 billion market going at 7% a year. we are exiting very well. we're going faster than the core markets we participate in. we feel that omentum is continuing to build. business,king at your you are involved in b2b. mistaken, you have a proposition.
where is it critical mass? where is the real momentum? kris: we focus on enterprises. public sector organizations. the thing to keep in mind about breaches, the truth is they are happening every day. them neverjority of make it to the front pages. thousands of breaches are happening every day. six 2 million small, midmarket organizations around the world. our job is to protect the 60 million that we think are poorly protected and need to ensure, that they protect data and their customers. the phones must be ringing off the hook. are they? kris: the security is the top priority for i.t. executives of any size organization. morgan to the.p.
very smallest in the world. the way that we have reached so many organizations is by working with a network of channel partners. organizations that resell our products and give us access to hundreds of thousands of sales organizations around the world to that is one of the key aspects of why we are performing so well. , you got insumably higher for a year. talks and j.p. morgan's nightmare is your nirvana. what does that do for your margin? what are your margins? in you in protection mode that you would be able to really hold on to those margins? you got the products, we needed. you can charges if it is good enough. the thing about security is that it's not a spike right
now. there is no sense that is going to slow down anytime soon. security is the flipside of this enormous benefit that we have from a connected world. i saw a statistic that we now have more active mobile devices than people on the planet. there are 7.5 billion active mobile devices on the planet. 3 billion people access the internet. in numerous benefit to society but with that comes the darker side of cyber crime and criminals taking advantage. that is the opportunity we have to protect millions of organizations around the planet. we feel like we're just game started. manus: what is the paradigm for protecting ourselves? many of our viewers work in the markets. they have mobile devices. affecting ourselves, are we to which we extent
need to spend money on protecting ourselves? kris: the key is similar. one, make protection and priority. two, take a conference of approach. three, try to keep it as simple as possible. four, watch her behavior. don't do things online that you would never do in the real world. if someone approaches you on the sidewalk in the real world and says we do mind giving me your phone number and your home address? are you will probably not do that. on my happens millions of times -- online,ere at that happens millions of times every day. manus: are you interested in buying any businesses? kris: we are active all the time. hagerman, thank you very much. biggest netted its
lost since 15 years ago. by elgin we're joined mounted off. elgin, great to have you with us. that me behind the numbers. expect to me these losses. e.on -- elgin: the results were behind analysts expectations. e.on took a hit. every business line except for energy distribution. the impairment is a big issue. is this doestant not impact eons evidence.
manus: here are the bloomberg top stories. ab inbev made a formal offer to buy sabmiller 444 pounds a share. the deal will trade the world's -- $1.4brewer and billion a year. meanwhile, carlsberg says it will cost 2000 jobs to reduce annual costs. about 1300 employees have been notified and will cut staffing levels by 15%.
-- prime minister has been forced from power. formed alist parliamentary majority. leader antonio cost a plans to will back austerity measures. the bank of england hosts its open forum today. looking at the future on financial markets. the chief executive of the london stock exchange will be present. a -- xavier rolet rolet. i'm looking at the title open. pleasure. the title of the form and i looked at it. it is about markets regaining its social license. it is vital that they work together to work the tide of the ethical drift. we got more relation than we have more -- than we know what
to do with. we've had libor and ratings. >> europe has been overly reliant on debt. unlike the u.s., where less than 20% stems from the banking sector. on smes toependent banksne of 80%. they need . it continues to be subsidized by taxpayers. what we're arguing for is a recalibration of the european funding law away from that.
away from debt -- away from debt. greater reliance if you want a recalibration in favor of equities, risk instruments. european equity markets as a whole are about half of u.s. markets which is roughly an economy equivalent. with this -- what this form is about is how we're going to restore confidence. it is all about recalibrating the system away from bank lending. chance tocapital a create the wealth and jobs we all want. no mean task. let's focus on some of the issues. itulation as i understand looks as if it is going to be delayed by the european union. this is something that is relevant in your business,
because you believe in open access. that is your business model. a delay in method leaves your competitors lying. disappointed are you? it doesn't make a huge difference to us, because we already are and open access -- already are an open access company. provideringhouses efficiencies, margin efficiencies to exchanges around the world. -- open access already exists here it exists in the united states as well. equity and the options market. this is the way of the future. to hear itant us now they want connectivity. they want lower prices.
fundamentally, if i look at what you did in the summertime with the american market, which is rolling out new , itucts, here is deutsche closed shop. >> we are not disappointed -- wee this open access are in this for the long-term. it is about enabling and ensuring that all market participants are ready. it is clear that some segments will not have the time for an i.t. standpoint to retool. in terms of open access, we believe it is an economic reality. it is what customers want. writing.ave put in ultimately, we think that open access will succeed. it is already successful today here in it is an economic
argument rather than a revelatory argument that we think will win the day. manus: we like confidence. [laughter] i want to give your interpretation -- get your interpretation. i'm not going to ask about your results. --y're going to begin to his they're going to begin to report results in europe. three of the 10 biggest companies in the ftse 100 will continue to report its sterling. for your business when you see companies doing things like this, but fairness for a changing world, how concerned are you for the lse and your business on the prospect of a brexit? obviously this is a political decision. it is a sovereign decision to be made by the u.k. people.
as regard to the lse, today 25% of our revenues come from the u.k. almost 30% come from north america. 25% from the eurozone. the rest come out of asia and emerging markets. ,e are a very global company operating and selling our products and selling our products in over 90 countries around the world. , this is not an economic issue. this is a political issue which will be solved when the outcome of the referendum is known. it is for the u.k. people to decide, not us. manus: can't let you go without which isup the topic this. ,ichael spencer over at i cap is this the kind of company with which you would consider doing a deal. -- wevier:
cannot comment on speculation, rumors. whether it is him in a or anything else. our track record speaks for itself. michael's track record speaks for itself. a great company. herell have to see from you'd otherwise i cannot comment. manus: you are a consummate professional. draghi will mario move markets as draghi did when he was here. i hope you restore our faith and institutions. ravage our believes.
manus: welcome back. i met manus cranny. this is "on the move." sabmiller shares on -- are up. let's bring in our deals reporter, matt campbell. wages.obs and we have richard johnson. it is a double billed special. toronto and ottawa. , willo first, good deal he go through? -- will it go through? >> this is the big antitrust problems they were facing. this is what -- this is when regulators wanted to see changed hands. agreeing to sell $12 billion to molson coors. that is a big one. there's a lot more antitrust ago. manus: this is about producing
capital margins. >> this is the biggest beer company in the world. the company that made beer into a much more industrial business than anyone else had by cutting costs, focusing on the bottom line. efficiency, efficiency, efficiency. lots more beers. manus: beer, beer, we want more beer. what you drink? >> i have on occasion. i go for the craft of drawers. -- craft brewers. manus: we got wages from the u.k. sign mark carney is telling us we should get more involved. these wages rock. thate interesting thing is if you look the euro sterling exchange rate, we are back at
levels we were at just before super thursday. the markets have digested super thursday. pound weekend. now it is strengthening again. the bank highlighted strength sterling as an issue. it is consistently remaining strong. manus: i would challenge that. net dived.k carney i want to shift the sterling gear. day, therend of the been a lot of people talking but the strength of sterling being an issue. the bank has been downplaying that. it is lingering, much the same way that low inflation is lingering much more than they thought it was. macro i will take low inflation -- manus: i will take inflation. gentlemen, thank you very much. more to come on the a.m. -- on the ab inbev story.