Friday Papers: Glencore and Xstrata close to $88bn deal

Top stories

• Financial Times: Glencore and Xstrata have launched merger talks to create a $88 billion commodities trading and mining giant with the financial muscle to sweep up some of its biggest rivals.
• The Independent: Standard & Poor's fuelled fears over Europe on Thursday as it put the chances of a severe recession in the single currency bloc at 40%.
• Financial Times: Spanish banks must find $66 billion from profits and capital this year to finance a clean-up of their balance sheets or agree to merge with another bank by May to gain an extra year’s grace.
• The Guardian: Pressure on Greece's recession-stricken economy has intensified after international debt inspectors admitted an additional €15 billion would be needed to fill a newly discovered black hole in the country's finances.
• Financial Times: China is considering how to get “more deeply involved” in resolving Europe’s debt crisis by co-operating more closely with European rescue funds, Wen Jiabao, Chinese premier, said on Thursday.
• The Independent: British Prime Minister David Cameron is under new pressure to intervene to halt multimillion-pound bonuses for more top businessmen after it emerged that bank and rail bosses are in line for huge top-up payments next week.
• Financial Times: The central government of Britain is losing up to £8 billion a year because of unpaid debts, according to an official report that signals a sharpened focus by ministers on recouping money in an era of austerity.
• The Guardian: Shell has reported global annual earnings of £18 billion, up 54%, while paying out $10.5 billion to shareholders during 2011 and promising to raise dividend levels further in the coming months.
• Financial Times: Blackstone, the world’s largest listed alternative asset manager, has reported distributable earnings to its shareholders in the fourth quarter of $178 million, down from $239 million the previous year.
• The Daily Telegraph: Unilever fell 91 pence to £19.94 in London on Thursday - the biggest faller in the FTSE 100 – after the consumer goods giant warned growth rates in emerging markets would fall by 1% in 2012.

Business and economics

• Financial Times: Central bankers and public interest groups have lined up to demand tougher rules for banks at the European parliament in Strasbourg, as the battle over how to make financial institutions safer without stifling Europe’s economy intensifies.
• The Guardian: The Financial Services Authority says its running costs will rise 16% to £578 million in the year ahead – a cost that insurers and banking groups say will be passed on to consumers.
• Financial Times: Facebook’s impending IPO will mark the biggest payday ever for the venture capital industry, with Accel Partners, whose partner, Jim Breyer, sits on the Facebook board, set to reap more than $9 billion from an investment of just $12.7 million made in 2005; other early VC investors, including Greylock and Meritech, should also see $1 billion pay-offs.
• Financial Times: Revenues from Zynga users’ purchases and its advertisements made up 12% of Facebook’s revenues in 2011, or $445 million, its single biggest source of income, showing Facebook is just as dependent on CityVille , FarmVille and other Zynga titles.
• Daily Mail: Barclays Thursday night said it would cut pay and bonuses for 24,000 employees in its 'casino' arm Barclays Capital.
• Financial Times: LVMH, the world’s biggest luxury group by sales, reported sales last year of €23.7 billion, up 14% on a like-for-like basis and at constant exchange rates, or 16% in reported terms, driven mainly by shoppers in Asia.
• The Guardian: AstraZeneca is cutting 7,300 jobs globally; the job cuts will cost the company $2.1 billion to implement but would help it save $1.6 billion a year by the end of 2014.
• The Daily Telegraph: Deutsche Bank plunged from a €707 million profit to a €351 million pre-tax loss in the final quarter of last year, as the European debt crisis hampered trading and forced debt write-downs.
• The Independent: BP has announced a multimillion-pound contract with Subsea 7, a specialist offshore engineering firm, for the second phase of a massive project off the Shetland Islands.
• Financial Times: CME Group, the US’s biggest futures exchange operator, is creating a $100 million protection fund for farmers and ranchers as it attempts to restore confidence in futures markets after the collapse of MF Global.
• Daily Mail: The top bosses at Lloyds who presided over the toxic takeover of Halifax Bank of Scotland in 2008 are set to miss out on over £6 million in share bonuses which were due this year.
• The Guardian: Sony has warned it is heading for a bigger-than-expected £1.8 billion annual loss, presenting a daunting task for incoming chief executive Kazuo Hirai.
• Financial Times: MasterCard has reported a net income was $514 million in the three months ended 31 December, beating analysts’ estimates for net income of $498 million.
• The Daily Telegraph: Rahul Dhir, chief executive of oil and gas producer Cairn India, has netted £6.6 million by selling half of his stake in the company, ahead of receiving another round of stock options.
• Financial Times: BC Partners, the private equity owner of Fitness First, has replaced the gym chain’s top management as it fights to preserve its more than €500 million equity investment in the highly indebted company.
• The Independent: PwC, administrators to Coryton oil refinery which went bust, has received over 40 expressions of interest from companies around the world.
• Financial Times: BT will make “ultra-fast” broadband, with connection speed of up to 300mbps, available to most British homes and businesses next year as it achieves a significant technological breakthrough.
• Financial Times: Net income of Viacom fell 65% from $610 million to $212 million in the three months ended December, as higher fees from distributors failed to offset weak advertising sales at the media group behind MTV and Paramount Pictures.
• Financial Times: Adjusted earnings of Evercore Partners, the independent investment bank, jumped 29% to $14.1 million in the fourth quarter of last year, or 32 cents a share, taking full-year profit to the record $63 million.
• Financial Times: Daily volume in the 50 most traded US ETFs in January was at its lowest, excluding the last month of the year, since the end of 2007, according to data from Factset, threatening to increase transactions costs for retail investors.
• Financial Times: The family of bankrupt Irish businessman Sean Quinn has alleged that Anglo Irish Bank lent them more than €2 billion to prop up the company’s share price illegally.
• Financial Times: Michael Roseman, the former chief risk officer of failed futures broker MF Global, has told the US Congress that his views on risk “certainly” played a role in his dismissal.
• Financial Times: Taylor Wessing, the UK’s 18th-biggest law firm by revenue, is preparing to spin off its document review business into a separate entity in the latest move by a firm to shake up its business model.
• Daily Mail: Smith & Nephew, Europe’s biggest artificial knee and hip maker, is cutting 770 jobs to save £95 million in costs over the next two years.
• Financial Times: News Corp has named Lex Fenwick, a former chief executive of Bloomberg, as chief executive of Dow Jones, the publisher of The Wall Street Journal.
• Financial Times: Digital subscriptions to the New York Times rose from 324,000 at the end of September to 390,000 in December, stabilising revenues at the publisher’s flagship title in the fourth quarter of 2011.

Share tips, comment and bids

• Financial Times: PetroChina will buy a 20% stake in Shell’s Groundbirch assets, which include shale gas acreage in British Columbia, on Canada’s west coast, in a deal estimated to be worth more than $1 billion.
• Financial Times (Comment): Does France want to keep running to keep up with Germany; or does it want to lead a rebellion against economic orthodoxy.
• The Guardian (Comment): America's California-based tech industry can be magnificent defending internet freedom. But profit too often trumps principle.
• The Daily Telegraph (Comment): By flooding the system with 'free’ money, the central banks could be storing up trouble.
• The Daily Telegraph (Comment): Xstrata is worth a premium but shareholders must accept changes.
• Daily Mail (Comment): Will Facebook's listing meet a similar fate to other recent high-profile tech floats and see its share price struggle?
• Financial Times (The Lex Column): Sony: there is no happy ending for Sir Howard Stringer or investors as the company’s first foreign head bows out.
• Financial Times (The Lex Column): Shell: the business that will emerge at the end of its new four-year strategy is unlikely to look very different from that of today.
• Financial Times (The Lex Column): AstraZeneca: if British drugmaker’s share buy-backs continue while cutting back its workforce, investors should be worried.
• Financial Times (The Lex Column): Glencore/Xstrata: as the companies discuss an $80bn merger of equals, the creation of the first mega vertically-integrated commodities business looms.