Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The City has woken up to an dealmaking frenzy this morning, with three tie-ups with serious ramifications well beyond the markets being announced.
Firstly, video platform TikTok has plumped for a ‘technology partnership’ with enterprise software giant Oracle, rather than selling its US operations as president Donald Trump had demanded.
At first glance that looks like a win for Oracle’s Larry Ellison over Microsoft — but it’s not yet certain that the tie-in will be approved.
My colleague Alison Rourke explains:
The Washington Post reported that Oracle had been chosen by ByteDance as a ‘“technology partner” to allay US concerns, and Reuters quoted a source as saying it would be a restructuring rather than a sale, with Oracle handling TikTok’s US user data. The source did not disclose how much of TikTok’s US operations ByteDance and its investors would continue to own.
ByteDance will need approval for the deal from both Washington and Beijing. It is not clear whether Trump, who wants a US technology company to own most of TikTok in the United States, will approve the proposal.
One of Britain’s most important technology companies is also changing hands, in a controversial deal.
US tech giant Nvidia has just finalised the $40bn acquisition of ARM, the UK-based semiconductor designer, from Japan’s Softbank.
ARM is a real UK success story, with a heritage dating back to Acorn Computers, whose BBC Micro helped teach a generation of children how to get to grips with computers and coding (some, ahem, better than others).
Its chip architecture is used in virtually all mobile phones today, and will power the next-generation of Apple Macs too.
Nvidia insists it will expand Arm’s R&D presence in Cambridge, UK, by “establishing a world-class AI research and education centre”. But a backlash is underway, with the firm’s founder worried that jobs will be lost, and that Nvidia will destroy the firm’s business model of licensing its intellectual property to chipmakers.
Thirdly, American biopharmaceutical company Gilead is acquiring cancer drugmaker Immunomedics in a $21bn merger. Gilead is most famous for its Remdesivir treatment for Covid-19, but this deal will expand its cancer treatments.
In particular, Immunomedics’ drug Trodelvy, a treatment for metastatic triple-negative breast cancer.
Gilead Chief Executive Daniel O’Day explains that the deal could see Trodelvy used to treat more types of cancer:
“Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat.
We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments.
European stock markets are expected to open higher as investors digest this flurry of news. There’s also relief that AstraZeneca has resumed trials of its Covid-19 vaccine, after a brief pause last week after a triallist fell ill.
We’ll be tracking all the action through the day.
- 10am BST: Eurozone industrial production for July