Merger of French and Swiss business software firms heralds new unicorn
The deal announced on Wednesday, which is due to complete this month, is backed by British private equity group Bridgepoint (BPTB.L), opens new tab, which was previously a major shareholder in LumApps and will hold a majority stake in the new firm.
"Midterm, an IPO or a trade sale are options. With the U.S. and Europe being our core markets, both would be great (IPO venue) candidates," said Beekeeper CEO Cristian Grossmann.
The new firm's headquarters will be in Lyon, the home of LumApps, whose CEO Sebastien Ricard will lead the business. It will have approximately 600 employees worldwide.
Unicorns are unlisted start-ups valued at at least $1 billion. Such firms are comparatively rare in Europe.
LumApps makes software that companies use to run their intranets.
"We are trying to augment or even replace products like Microsoft's SharePoint (MSFT.O), opens new tab," said Elie Melois, chief technology officer of LumApps, which is used by the likes of Airbus (AIR.PA), opens new tab and luxury goods group LVMH (LVMH.PA), opens new tab.
While LumApps products are mainly used by office workers, Beekeeper has an app that allows frontline staff to communicate with the rest of the company.
Beekeeper, founded by graduates of ETH Zurich, counts Swiss retailer Coop and Heathrow airport among its clients.
Within six months, the merged company aims to introduce a unified platform.
Current revenue of around $150 million is expected to double to around $300 million by 2030. LumApps already turns a profit, and Beekeeper aims to break even this year. "The combined group will be profitable from day one," Melois said.
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Union Pacific nearing agreement to buy Norfolk Southern Bloomberg reports
July 26 (Reuters) - Union Pacific (UNP.N), opens new tab, the largest U.S. railroad operator, could reach an agreement to acquire rival Norfolk Southern (NSC.N), opens new tab as soon as early next week, Bloomberg News reported on Friday, citing people familiar with the matter. Union Pacific had said on Thursday it is in advanced talks to acquire its rival, signaling that a deal to form a $200 billion coast-to-coast rail company could be close - and potentially trigger further consolidation among remaining freight rail giants. Union Pacific declined to comment, while Norfolk Southern did not immediately respond to a Reuters request for comment. The combination, which would be the largest-ever buyout in the sector, would create the first modern West-to-East single-line freight railroad in the United States, significantly affecting how goods from grains to chemicals to autos move across the country. The fact that talks are advancing has surprised many in the rail industry and Wall Street as the U.S. freight rail system already functions as two regional duopolies by point of origin. The talks show how thinking around antitrust issues has shifted under President Donald Trump's administration, with his executive orders aimed at removing anti-competitive barriers and opening the door to potential megamergers in the industry. If completed, the deal would combine Union Pacific's dominant position in the western two-thirds of the U.S. with Norfolk Southern's 19,500-mile network spanning 22 eastern states. Union Pacific is valued at approximately $138 billion, according to LSEG data. The company has been grappling with sluggish automotive volumes and volatile coal shipments as power producers shift to natural gas, which is shipped by pipeline. Norfolk Southern, which is worth about $63 billion, is emerging from a turbulent period that included the ouster of its former CEO amid ethics investigations, a high-profile boardroom clash with activist investor Ancora, and a costly train derailment that set the company back about $1.4 billion.
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Bread producers Hovis and Kingsmill close in on historic merger
The owners of Hovis and Kingsmill are closing in on a definitive agreement to merge two of Britain's most famous grocery brands following months of talks. Sky News has learnt Associated British Foods (ABF), the London-listed company which owns Kingsmill's immediate parent, Allied Bakeries, has proposed paying roughly £75m to acquire Hovis from its long-term private equity backers. Banking sources said a deal could be formally agreed to combine the businesses as early as the end of next week, although they cautioned the complexity of the transaction meant the timing could yet slip. Confirmation of a tie-up would come nearly three months after Sky News revealed ABF and Endless - Hovis's owner since 2020 - were in discussions. Industry sources have estimated that a combined group could benefit from up to £50m of annual cost savings from a merger. ABF has also been exploring options for the future of Allied Bakeries separate from its talks with Hovis in the event a deal could not be agreed or is prevented from completing by competition regulators. If it does go ahead, the merger will unite two historic bread producers under common ownership, with Allied Bakeries having been founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF. Hovis traces its history back even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin 'Hominis Vis' - meaning "strength of man". Persistent inflation, competition from speciality bread producers and shifting consumer habits towards lower-carb diets have combined to impair breadmakers' financial health in recent decades, however. In accounts filed at Companies House earlier this month, Hovis said it had "achieved positive financial progress despite continued tough trading conditions". The company reported sales of £439.6m in the 52 weeks to 28 September last year, down from £477.6m in the 53 weeks to 30 September 2023. Earnings before interest, tax, depreciation and amortisation fell from £20.9m to £18.7m, which Hovis said was the result of the revenue decline and higher distribution costs. "Overall bread share remained stable, despite significant price inflation and the ongoing cost-of-living crisis, demonstrating the resilience of the Hovis brand and its iconic status as one of Britain's most loved food brands," the accounts said. This week, the trade publication The Grocer reported that Britain's big four supermarkets, including Asda and Sainsbury's, had delisted a number of Hovis-branded products. The publication quoted a Hovis spokeswoman as saying the company was "aware of some adjustments to Hovis product lines in certain stores". "We remain fully committed to working collaboratively with our retail partners to grow our mutual businesses." The overall UK bakery market is estimated to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day. Critical to the prospects of a merger of Allied Bakeries, which also owns the Sunblest and Allinson's bread brands, and Hovis taking place will be the view of the Competition and Markets Authority (CMA) at a time when economic regulators are under intense pressure from the government to support growth. Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector, with Hovis on 24% and Allied on 17%, according to industry insiders. A merger of Hovis and Kingsmill would give the combined group the largest share of that segment of the market, although one source said Warburtons' overall turnover would remain higher because of the breadth of its product range. Responding to Sky News' report in May of the talks, ABF said: "Allied Bakeries continues to face a very challenging market. "We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value." In a separate presentation to analysts, ABF - which is also in the process of closing its Vivergo bioethanol plant in Hull after pleading for government support - described the losses at Allied, which also owns own-label bread manufacturer Speedibake, as unsustainable. The company does not disclose details of Allied Bakeries' financial performance. Prior to its ownership by Endless, Hovis was owned by Mr Kipling-maker Premier Foods and the Gores family. At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites, as well as its own flour mill. Hovis's current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.
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The dizzying fall of the King of Davos
Klaus Schwab was the undisputed 'King of Davos' for 55 years. But when his downfall came, it was swift. The 87-year-old founder of the World Economic Forum (WEF), which holds the annual conference in the Swiss alpine ski resort, fought until the end. But over two days in April, beset by allegations of misusing WEF funds, manipulating research and inappropriate behaviour with staff, he was forced out of his personal fiefdom. 'He had the chance to step back 10, seven, five years ago. But he hung on,' one WEF insider told The Telegraph. On Sunday, the early findings of a second investigation into the WEF were leaked. They alleged Mr Schwab had misspent WEF money and manipulated research for political reasons, including rigging data to make Brexit look like a failure. Mr Schwab also allegedly put his crotch in front of a female staffer's face, splurged $50m on a luxury villa, and ran up £836,000 in expenses that were not sufficiently linked to WEF activities. His credibility now lies in ruins and the future of Davos is openly questioned. Some see the investigation in response to a whistleblower complaint as a barely disguised attempt to push Mr Schwab out. For his part, he denies any wrongdoing. 'He wasn't perfect, but he has been stitched up because he wouldn't go when people wanted him to go,' one person close to the organisation told The Telegraph. Other insiders fear that the push to remove Mr Schwab will come at too high a reputational cost to the WEF itself. 'They've used a sledgehammer to crack a nut,' one said. It is an astonishing fall from grace from the former executive chairman, who was awarded an honorary knighthood by the UK in 2006. The German-born professor built his empire from humble beginnings, establishing the WEF in 1971 as a forum for policymakers and CEOs to discuss global issues. Over the years it mutated into a magnet for world leaders, a capital of fevered dealmaking, a byword for elitism and a lightning rod for conspiracy theories. The title of his book 'The Great Reset' – about how the pandemic could remake global economies – has become shorthand for online extremists convinced that plots to create a world government are hatched at Davos. Mr Schwab, the quintessential 'Davos Man,' was front and centre every year as he welcomed a galaxy of heads of state and government. They included prime ministers and presidents as different as Angela Merkel and Donald Trump, Emmanuel Macron and Narendra Modi or Baroness May and Vladimir Putin. At this year's gathering, in January, there was no Sir Keir Starmer, French president or German chancellor in Davos. The demise of Davos has often been predicted, but rivals are circling. China has the Boao Forum, colloquially known as 'the Asian Davos', and Saudi Arabia has launched the Future Investment Initiative, which is dubbed 'Davos in the Desert'. The rumblings of what would become an avalanche of revelations about Mr Schwab began with a 2024 investigation by the Wall Street Journal, which accused the WEF of having a workplace culture that was hostile to black people and women. Women were allegedly sidelined after becoming pregnant, while two staff members used the n-word, according to the Journal. The WEF said at the time it had zero tolerance for discrimination and harassment and disputed the allegations in the newspaper report. Staff alleged that Mr Schwab was inappropriate and made unwanted suggestive remarks, while one female staffer claimed he put his leg on her desk with his crotch in front of her face. She said Mr Schwab told her he wished she was Hawaiian because he'd like to see her in Hawaiian costume, which the WEF fiercely denied. Others told the Wall Street Journal that attractive women were chosen to meet international delegates. There was a slang term for such encounters – 'white on blue action' – a reference to the different coloured lanyards worn at the conference by officials and famous guests. Former staff at the non-profit were reported to have set up a WhatsApp group called 'WEFugees' in which they shared horror stories about their experiences. A former staffer told the Journal: 'We promote inclusion and improving the state of the world and women's issues but do the opposite.' Mr Schwab complained bitterly about the Journal's reporting but was determined to craft a graceful, prolonged exit from the WEF, which generates about $500m a year. The WEF's founding bylaws state 'the Founder himself designates his successor', and stipulates he or 'at least one member of his immediate family' is on the board of trustees. Mr Schwab's plan was to move to a role as non-executive chairman and retire in stages, picking his successor. But then whistleblowers sent a letter in an email to WEF trustees, including luminaries such Al Gore, the former US vice-president, and cellist Yo Yo Maa. It accused Mr Schwab and his wife, Hilde, of misusing WEF funds. It said Mr Schwab had used company funds to pay for private massages, and he had redirected WEF resources and staff in a vainglorious bid to get nominated for the Nobel Peace Prize. 'This was not a WEF initiative, but a self-driven effort disguised as organisational work,' the letter said. It complained about Hilde Schwab's spending of about $50m on Villa Mundi, a mansion next to WEF headquarters overlooking Lake Geneva. It alleged she controlled access to the property and that one entire floor was reserved for the couple's exclusive use, according to the Wall Street Journal. They denied the allegations. In April this year, a WEF audit committee recommended opening an independent investigation into the new allegations. Mr Schwab went on the attack. He wrote a furious email to the committee demanding the probe be dropped within 24 hours and threatened to file a criminal complaint. The gamble backfired. After the WEF board insisted the investigation had to go ahead, Mr Schwab resigned 48 hours after sending his email. He insisted his legacy was 'well established', adding he had received 'the highest national distinction from numerous countries for my efforts in helping economic developments, reconciliation efforts and even avoiding a war'. After a two-hour emergency meeting of trustees, Mr Schwab's ouster was announced on April 21. He was swiftly replaced by Peter Brabeck-Letmathe, the WEF's vice-chairman and former Nestle CEO. A law-firm led independent investigation began in accordance with Swiss regulations. Last Sunday, some preliminary findings were published in Switzerland's SonntagsZeitung newspaper. Law firm Homburger has looked into some £836,000 in expenses submitted by Mr Schwab and his wife which, it was reported, were not sufficiently linked to WEF activities. Mr Schwab sent suggestive emails and had 'embarrassing interactions' with younger WEF staff, according to the leaked findings. The newspaper revealed he had told staff that the UK 'must not see any improvement' in the WEF's annual Global Competitiveness Report, which ranks countries on productivity. Otherwise it would be 'exploited by the Brexit camp', he wrote. In the 2017/2018 report, the UK's ranking improved from seventh to fourth after a change in methodology. The final report published in 2017 – a year after the Brexit referendum – showed the UK had dropped one place to eighth. It was not the only example of political manipulation of research, according to the newspaper. Mr Schwab has denied all the allegations. The once all powerful king of the globalists was reduced to a chuntering complaint from the ruins of his empire. He accused the WEF board of breaking a media silence pact over the investigation, but now faces a nervous wait until the official end of the probe later this year. 'I feel deceived,' he huffed on Sunday. 'I am not available for further investigations.'
