Today's business and finance round up 18th May 2021

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18th May 2021

Good morning UK consumers are set to spend £2.5bn this week as indoor hospitality reopens. So did you manage to dine or drink indoors at a restaurant or pub yesterday? Or perhaps you’ve already jetted off to a green listed country like Portugal or the Faroe Islands…Don’t forget to forward this email to a friend using the link below to be in with a chance of winning £30 restaurant vouchers (more details here).

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Today's stories

• $150bn media mega merger

• Ryanair posts biggest ever loss

Yesterday's market moves

FTSE 100 -0.2%   7,033 FTSE 250  -0.6% 22,214

It was a pretty quiet day in the markets with the relatively slow vaccination roll out in Asia being the main talking point. The FTSE 100 closed down 0.2%, while the FTSE 250 was 0.6% lower

$150bn media mega merger

What’s going on

US telecoms giant AT&T is nearing a deal to combine its content unit WarnerMedia with rival Discovery to create a media giant worth $150bn.

AT&T owns a host of assets including CNN, Warner Bros. film studios (owners of Harry Potter and Batman) and streaming service HBO Max which launched a year ago.

Discovery in addition to its namesake TV channel, owns a variety of lifestyle and reality brands like Animal Planet and Food Network as well as its three-month-old streaming platform, Discovery+.

Why is this important

If the deal goes ahead it will create an enviable content portfolio big enough to take on the streaming juggernauts of Netflix, Disney+ and Amazon Prime.

It would also mean that AT&T is bowing out of the content space after just 3 years given it only bought WarnerMedia back in 2018 for $81bn. This made AT&T the most indebted non-financial company in the US.

The debt meant that AT&T could not invest in its core telecoms business, like rolling out 5G services, at the same time as building out HBO Max.

Shareholders complained that the deal made AT&T a "sprawling collection of businesses…saddled with the financial repercussions of its choices".

Takeaway

The deal makes sense for both parties. AT&T’s shareholders will be happy that the company will shift its focus to its core telecoms business and Discovery will have a content portfolio strong enough to trouble the likes of Netflix.

Ryanair posts biggest ever loss

Ryanair passenger numbers fell more than 80% in the past year to 28m resulting in the airline’s biggest loss (£700m) in its history.

Unsurprisingly pandemic related travel restrictions made 2020 the toughest year for Europe’s largest low cost airline.

But they have a couple reasons to feel optimistic for the future:

• They expect short haul foreign travel to within Europe to become the norm again by about the end of May into middle of June as restrictions ease and the vaccination programme rolls out

• It has a cash pile of more than €3bn, so it is well placed to emerge from the crisis in a strong position

However Ryanair does not see a recovery in pre-COVID demand until the summer of 2022 - assuming vaccine programmes remained on track.

Covid-19 Vaccine Update

• In the past 24 hours 131k UK adults have had their first dose and 184k have had the second dose.

• This means 69.7% of UK adults have had at least one dose of a vaccine, 38.5% of adults have had two doses.

Other stories to keep you in the loop

• Long working hours are killing 745,000 people a year, according to the World Health Organization (read more)

• BDO becomes latest auditor to tell staff to work where they like (read more)

• UK house prices boom outside of London (read more)

• Bill Gates left Microsoft amid affair investigation (read more)

Stat of the day

In the UK there has been a 19% rise in people starting their own companies in the last year