Updates from Tesco and William Hill
Overnight, the Nikkei 225 is up +0.16% to 13,627 while the Hang Seng climbs +0.54% to 21,772. %VIRTUAL-SkimlinksPromo%
The major news this morning is of Tesco merging its Chinese operations with China's own biggest retailer, China Resources Enterprise (CRE). The joint venture should create a business with sales of £10bn, with CRE and Tesco's interests split 80% and 20%.
Currently Tesco has more than 120 Chinese stores. Strapped to the back of CRE, it's likely the deal will allow Tesco some breathing space; going solo in China was a tough call, especially with a challenging UK market at home.
"The intended partnership," says Tesco, "follows a series of highly successful joint ventures between CRE and other multi-national corporations and is consistent with Tesco's stated strategy of focusing on profitable routes to growth in fast-growing but less mature markets."
Next, bookie William Hill, and news of more international expansion. The betting operator says it has signed an agreement to buy Tom Waterhouse, the Australian online betting business, for an upfront cash price of A$34m (£20m).
William Hill claims there's a potential additional earn-out on a sliding scale of up to A$70m in cash, subject to tomwaterhouse.com achieving incremental operating profit on a sliding scale between A$10m and A$30m in the year to 31 December 2015.
"We are bringing together," says chief exec Ralph Topping, "some of the best talent in the bookmaking industry into one formidable team. I'm impressed by Tom Waterhouse and his team, who are passionate and entrepreneurial. They've built a good business in a short period of time."
Finally, six month numbers from insurer Catlin Group. Catlin claims "strong" underwriting performance with US$441 million in net underwriting contribution (30 June 2012: US$443 million), despite US$99 million in net catastrophe losses (30 June 2012: nil).
43% per cent of net underwriting contribution was produced by non-London/UK underwriting hubs (30 June 2012: 35 per cent) with "good" underwriting conditions for most classes of business, it says.
"Our global underwriting infrastructure," says chief exec Stephen Catlin, "continues to produce profitable growth. The share of our gross premiums written - and more importantly net underwriting contribution - produced by the non-London/UK underwriting hubs continues to grow."