BP, and India

Arthi Gupta
21 Feb, 2011
New York City

The UK indexes slid on civil unrest in Libya. Home prices surged 3.1% in February. BP inked $7.2 billion deal with India-based Reliance Industries. Diageo agreed to acquire Turkey-based Mey Icki for

[R]3:30 PM London – The UK indexes slid on civil unrest in Libya. Home prices surged 3.1% in February. BP inked $7.2 billion deal with India-based Reliance Industries. Diageo agreed to acquire Turkey-based Mey Icki for £1.3 billion. Shell agreed to sell African downstream business for $1 billion.[/R]

Markets in Europe and UK took a downward turn as oil and energy prices rose after tensions in the Middle East rose. The unrest spread to oil producing nations to Libya and Iran and Morocco streets saw its first demonstrations.

In London, FTSE 100 Index declined 28.98 or 0.44% to 6,053.46 and the pound edged lower to close at $1.6221.

UK Home Prices Surge

UK property asking prices increased 3.1% in February compared to the 0.3% rise in January, property Web site Rightmove said today. The increase took the average asking price for a home in England and Wales to £230,030 or $373,570.

On an annual basis, the asking price rose 0.3% in February following the 0.4%increase in January.

BP Inks Deal with Reliance Industries

BP plc said it would acquire interests in 23 oil and gas blocks of Reliance Industries Ltd., India''s largest private sector company, for an aggregate consideration of $7.2 billion plus completion adjustments. BP will also form a joint venture with Reliance to source and market gas in India.

Under the partnership, BP would take a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG-D6 block.

The companies would also form an equal joint venture for the sourcing and marketing of gas in India. The venture would also aim to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.

The partnership would combine BP''s deepwater exploration and development capabilities with Reliance''s project management and operations expertise.

Diageo Acquires Mey Icki

Diageo Plc, the beverages company agreed to acquire Turkish spirits firm Mey Icki Sanayi ve Ticaret AS for an enterprise value of 3.3 billion Turkish lira or £1.3 billion.

With increased access through Mey Içki''s strong distribution network and customer relationships in the emerging market, Diageo expects to accelerate the long term growth of its premium international spirits brands in the country.

Diageo added that its latest investment represents the continuation of its strategy to increase presence in the emerging markets, such as China and Vietnam, which have a rapidly growing middle class.

Shell Sells African Downstream Businesses

Royal Dutch Shell Plc agreed to sell most of its stake in its downstream businesses in Africa to Vitol Group and Helios Investment Partners for about $1 billion.

The acquisition allows Vitol Group and Helios Investment Partners to market products under the Shell brand in Africa and tap the latent opportunities.

Essar Energy Acquires Shell''s Stanlow Assets

Essar Energy Plc entered into an exclusivity agreement with Shell UK Limited, a part of Royal Dutch Shell Plc, whereby the option to acquire Stanlow refinery and other related assets for about $350 million or £219 million in cash.

The acquisition will result in Essar Energy becoming India''s third largest refining company with a total capacity of 31 million tons of crude.

Kyowa Hakko Kirin Buys ProStrakan

The boards of Kyowa Hakko Kirin Co. Ltd. and ProStrakan Group plc reached an agreement on the terms of the recommended cash acquisition by KHK of the entire issued and to be issued share capital of ProStrakan.

Pursuant to the terms of the acquisition, ProStrakan shareholders would be entitled to receive 130 pence in cash for each ProStrakan share, valuing the entire issued and to be issued ordinary share capital of ProStrakan at about £292 million or 39.42 billion yen.

CSR Purchases Zoran

CSR Plc, the British chipmaker announced its agreement to buy U.S.-based imaging and video technology company Zoran Corp. for about $679 million. CSR also said it plans share buyback program for up to $240 million.

The merged company will provide differentiated, integrated technology that addresses the rapidly growing market for connected, location-aware multimedia devices including handsets, digital cameras and home entertainment equipment.

Gainers & Losers

Devro plc gained 3.23% to 239.50 pence after the manufacturer of collagen products for the food industry said fiscal year 2010 revenue rose 7.5% to £237.04 million from £220.41 million a year earlier. Profit for the year soared 109% to £42.23 million or 25.3 pence per share from £20.22 million or 12.2 pence per share a year earlier.

Eckoh plc climbed 0.71% to 7.05 pence.

Hammerson Plc rose 2.95% to 460.70 pence after the real estate investment trust reported fiscal year 2010 profit was £615.4 million or 87.2 pence per share compared to a loss of £344.5 million or 54.1 pence per share in the previous year, mainly on higher property values as well as the absence of prior year''s significant losses.

Net rental income dropped 3% to £284.7 million from £293.6 million in the previous year, reflecting disposals in the year.

John Wood Group Plc fell 0.54% to 642.50 pence after the energy services company stated annual revenue for the year 2010 rose 3% to $5.06 billion as against the prior year''s revenue of $4.93 billion. Profit for the period increased 1.6% to $165.8 million or 31.3 cents per share from $163.2 million or 31.2 cents per share in the previous year.

Mondi Plc advanced 2.06% to 546.00 pence after the paper and packaging company, reported fiscal year 2010 group revenue increased 18% to €6.23 billion from €5.26 billion in the comparable period. Profit generated in the period was €224 million or 43.6 euro cents per share as against a loss of €33 million or 6.5 euro cents per share a year earlier.

Petra Diamonds Ltd increased 0.29% to 175.50 pence after the independent diamond mining company reported first-half revenue surged 86% to $90.0 million from $48.4 million in the previous year. Profit for the period dropped 35.4% to $23.9 million or 6.48 cents per share versus $37.0 million or 17.44 cents per share a year ago.

Royal Bank of Scotland Group Plc declined 2.88% to 47.13 pence after the British lender is planning to sell £1.6 billion of unwanted legacy loans from the boom years of the commercial real estate, the Financial Times reported, citing people familiar with the matter.

XP Power Limited surged 10.17% to 1,690.00 pence after the critical power control components maker said fiscal year 2010 revenue rose 36.4% to £91.8 million from £67.3 million a year earlier. Profit for the year soared 114% to £15.8 million or 83.2 pence per share from £7.4 million or 39.3 pence per share a year earlier.