Europe Biz: Chrysler merger talks, Shell rising profits
Updated 21:02, 31-Oct-2019
Catherine Newman
France, which owns a stake in PSA, favors the project despite opposing a tie-up between Renault and Fiat earlier this year. (Credit: STAN HONDA / AFP)

France, which owns a stake in PSA, favors the project despite opposing a tie-up between Renault and Fiat earlier this year. (Credit: STAN HONDA / AFP)

PSA and Fiat Chrysler merger of equals

On Thursday, PSA and Fiat Chrysler announced a plan for a 50-50 merger of their operations which will form the world's fourth-largest car manufacturer whilst generating billions in savings and avoiding factory closures. 

In a joint statement, the French and US-Italian carmakers said their boards of directors "have each unanimously agreed to work towards a full combination of their respective businesses by way of a 50/50 merger".

A new parent company is to be created in the Netherlands, in which both shareholders will own half. 

The carmakers said the newly-merged company would have combined sales of nearly 170 billion euros per year and 11 billion euros of operating profits. 

The boards of both carmakers said "both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility."

Royal Dutch Shell logs rising quarterly net profit

Royal Dutch Shell said on Thursday that net profit rose in the third quarter of its financial year, at a time when the Anglo-Dutch energy major was buffeted by lower oil prices. 

In a statement, Shell said that earnings after taxation added one percent to $5.9 billion in the three months to the end of September from a year earlier. 

Profit on a current cost-of-supplies (CCS) basis stripped out changes to the value of oil and gas inventories, and sank 15% to $4.8 billion in the reporting period. 

That reflected lower prices for oil, gas and liquefied natural gas (LNG), and turnover was almost 12% lower at $81.2 billion. 

Chief Executive Ben van Beurden said in the earnings release "This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices, and chemicals margins.

"Our earnings reflect the resilience of our market-facing businesses and their ability to capitalize on market conditions," he added, but also sounded a note of caution over the "prevailing weak macroeconomic conditions and challenging outlook".

UK bank Lloyds sinks into red on PPI scandal

Britain's Lloyds Banking Group sank into the red in the third quarter after setting aside more cash to compensate customers mis-sold insurance product PPI. 

In a results statement, the UK high-street giant said that it had received a bailout during the global financial crisis and that it made a loss after taxation of $307 million in the three months to September. 

The lender has also suffered a financial hit to cover claims concerning a UK-wide practise of mis-selling payment protection insurance (PPI) over a number of years. 

Chief Executive Antonio Horta-Osorio said he was "disappointed" that the performance was "significantly impacted" by the extra PPI charge. 

BA-owner IAG says quarterly profits hit by strikes

London airline company IAG said on Thursday that the recent strikes by British Airways pilots had affected its performance in the third quarter. 

BA grounded its entire UK fleet over a period of two days on September 9 and 10, when pilots employed by the airline went on strike for the first time in its 100-year history over a long-running pay dispute. 

IAG, which also owns Spanish carrier Iberia and Ireland's Aer Lingus, said net profits sank nine percent $1.1 billion) in the three months to the end of September from the previous year. 

The company said in a results statement that it took a 155-million-euro charge from the cost of major disruption, including industrial action by BA pilots in September. 

The group's fuel bill also rose significantly in the reporting period. 

Lawrence Jones quits as UKFast chief after FT Investigation

Lawrence Jones, former chief executive of UKFast, has quit the cloud computing company based in Manchester following an FT investigation into allegations of sexual assault, harassment and inappropriate behavior. 

In a statement the company said Jones, who has a net worth of $906 million  dollars, is to be replaced by his wife, Gail Jones. 

He is stepping down from the role a week after the FT published an in-depth investigation into his conduct during his time as chief. As many as 30 former employees were interviewed, as well as their friends and family members. 

Last week, Jones denied claims of unlawful behavior and said the allegations were wholly untrue. 

Jones said that the claims were "hurtful and damaging, especially to my wife, our family, and the UKFast team.

"We have dedicated 20 years of our lives to UKFast and we are hugely proud of how amazing the business that we have built together is.”