Good morning. Today we're talking about BT’s new top shareholder, UK economic growth and a big deal in the snack industry.

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Big Stories

BT’s new investor

Indian conglomerate Bharti Enterprises has acquired a 24.5% stake in BT Group from the beleaguered French telecoms firm Altice. BT previously held a 21% stake in Bharti Airtel alongside two board seats between 1997 and 2001. Bharti said it doesn’t plan to make an offer for all of BT and is applying voluntarily for UK National Security and Investment Act clearance. BT CEO Allison Kirkby has welcomed the investment, characterising it as a "vote of confidence" in the company's strategic direction. Altice, under the leadership of billionaire Patrick Drahi, has been actively offloading assets to reduce its $60bn debt burden which grew during the era of low interest rates. The sale of its stake in BT is the latest in a series of divestments as the company seeks to stabilise its financial position. The transaction is subject to regulatory approval and is expected to be completed in the coming months.

Economic bounce continues

The UK economy expanded by 0.6% in the second quarter of 2024, extending its recovery from the brief recession late last year. This growth was primarily driven by the services sector, with IT, legal services, and scientific research leading the way. However, the picture was less encouraging for manufacturing and construction, which both contracted during the period. While the overall economy grew, June saw no growth at all, with businesses citing general election uncertainty and strikes as factors. Despite outperforming France, Germany and Italy in the quarter, the UK still lags behind the US which grew by 0.7%. Moreover, the ongoing challenges of inflation and global economic uncertainty cast a shadow over the country's economic outlook. Meanwhile GDP per capita is still below its pre-pandemic peak, meaning that the average Briton is still worse off than five years ago.

Mars buys Pringles maker

Mars Inc. has acquired Kellanova, the maker of Pringles and Pop-Tarts, for $36bn. This deal marks a significant expansion for the chocolate giant, owner of brands like Snickers and Skittles, which has been steadily diversifying its portfolio beyond its candy roots. Kellanova, formed last year from the split of Kellogg Company, has sales of more than $13bn and 23,000 employees. This acquisition is fueled by the growing demand for convenient snacks, as consumers seek out alternatives to traditional meals. By combining Mars' global reach with Kellanova's strong brands, the companies aim to cater to evolving consumer tastes and preferences. The merger is expected to create a formidable force in the industry, with increased buying power, expanded distribution networks and opportunities for innovative product development.

Elsewhere...

End of an era: Dozens of Ted Baker stores will shut for the last time this week amid growing doubts over a future licensing partnership with the retail tycoon Mike Ashley.

Employee payday: Revolut has reached a $45bn valuation through a share sale that is expected to net staff a $500m windfall, cementing its position as the most valuable private tech company in Europe.

New boss: The new CEO of Starbucks is in line for a sign-on pay package worth up to $113m, in one of the largest such executive deals in corporate history and which is four times larger than that of his predecessor.

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