AB Food Lifted Forecast; Merck, GE and Canon Face EU Fines

Sarla Buch
06 Jul, 2017
New York City

AB Foods lifted fiscal profit outlook on strong sales at Primark. EU fined Merck, GE and Canon. Novae agreed to be acquired for

[R]4:00 PM Frankfurt – AB Foods lifted fiscal profit outlook on strong sales at Primark. EU fined Merck, GE and Canon. Novae agreed to be acquired for £468 million. Sodexo fell on weak sales forecast.][/R]

In London trading, FTSE 100 index dropped 36.70 or 0.5% to 7,330.90 and in Frankfurt the DAX index slumped 98.23 or 0.8% to 12,355.18.

In Paris, CAC 40 index declined 44.81 or 0.9% to 5,135.29.

Associated British Foods Plc advanced 2.5% to 2,996 pence after the U.K.-based ingredient and grocery retailer said group revenue in the third-quarter ending on June 24 to jump 10% from a year ago period.

The retailer forecasted “strong growth in operating profit and earnings per share” on the back of Primark sales increase of 13%.

Merck KGaA slumped 1.5% to €102.65 after the European Union antitrust regulators accused Germany-based drugs and health care product maker along with the U.S.-based General Electric, Sigma-Aldrich Corporation and Japan-based Canon Inc for providing misleading information during their merger deals.

The Commission fined up to 1% on global revenue for Merck and GE and up to 10% for Canon for providing misleading information related to a merger deal involving three separate deals.

While the charges are not going to affect the deals that were approved in 2015 and 2016, the Commission issued a statement of objection to GE related to its research data provided at the time of takeover of LM Wind, Danish wind mill rotor blade maker.

Merck faced fine related to its misleading information release at the time of takeover of Sigma-Aldrich in June 2015. And, Canon was accusing to acquire Toshiba Medical Systems Corp ahead of securing regulatory approval.

Novae Group Plc surged 21.2% to 705 pence after the U.K.-based diversified property and casualty reinsurance services provider said the company agreed to be acquired by the Bermuda-based rival and specialty insurer AXIS Capital Holdings Ltd for about £467.6 million or $605.07 million in cash.

Ricardo Plc increased 1.6% to 782 pence after the U.K.-based management consultancy services provider said new orders in the year ending in June were slightly ahead from a year ago and totaled £360 million.

Reckitt Benckiser Group Plc decreased 1.6% to 7,577 pence after the U.K.-based health and hygiene products maker forecasted weak comparable revenue in the second-quarter ending in June after global cyber attacks in June disrupted production at some of its factories.

The consumer goods maker lowered revenue growth estimate in fiscal 2017 to 2% from 3%.

Sodexo SA declined 5.5% to €107.30 after on-site services provider said revenues in the nine-months ending in May jumped 1.7% to €16 billion from a year ago period.

Sodexo said revenue growth in fiscal 2017 may be softerer than previously forecasted between 1.5% and 2% but confirmed operating profit in the range of 8% to 9%.