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Today's business and finance round up 3rd September 2021

🚫JD Sports deal blocked…again

September 03, 2021

3rd September 2021

Good morning Naming a business can be tricky. Over the past two years 800 business names have been rejected by Companies House - the government body that incorporates companies - for being "potentially offensive". A few examples on unacceptable names include: Go Fudge Yaself Ltd, Just Weed Ltd, Meow Meow Cooking Studio Ltd and Pandemic19 Ltd.

Today's stories

  • JD Sports deal blocked…again

  • Hurricane Ida fallout

RETAILJD Sports deal blocked…again

What’s going on?JD Sports’ merger with rival Footasylum has been blocked for a second time after the Competition and Market Authority (CMA) ruled that it would lead to a bad consumer outcome.

Why is this important?

It was all the way back in March 2019 when JD Sports first agreed to buy Footasylum for £90m. But since then the sportswear retailer has been locked in battle with the CMA to get the deal approved.The CMA is the UK competition watchdog and exists to make sure that consumers get a fair deal. It first blocked the deal last year, arguing that the merger would mean customers would likely face “higher prices, less choice and a worse shopping experience”.JD Sports then appealed the ruling in a tribunal and the CMA was forced to reconsider. The company argues that Footasylum and all of the jobs associated with the chain would disappear if it weren’t for it rescuing the firm through extra funding. But the CMA remains unconvinced and yesterday said it still has concerns that can only be resolved by ordering the JD Sports to sell Footasylum.Sports retailers have struggled since last year with lockdown leading to long periods of store closures. On top of this, brands like Nike and Adidas are focusing on selling on their own websites which is more profitable than selling through retailers. All this, JD Sports says, gives more reason for the merger with Footasylum so they can both survive.But the CMA says that online sales on both websites have been strong enough to counteract the impact of the pandemic and instore sales have rebounded strongly since lockdown restrictions eased. TakeawayIf the merger eventually goes ahead the combined company would have a dominant position in the UK footwear market. But if like Nike and Adidas go direct-to-consumer through online channels, how much would that really matter anyway? JD Sports and Footasylum have two weeks to give their views on the latest CMA findings before the competition watchdog makes a final decision in October.

USHurricane Ida fallout

You’ll have no doubt seen the news of the devastation caused by Hurricane Ida in the US. It made landfall on Sunday and is the most intense hurricane the state of Louisiana has suffered since Hurricane Katrina in 2005.The remnants of the storm have led to flash floods on the East Coast and it has already led to over 20 deaths, and left over a million people without power.Ida’s impact is far-reaching. Damage to the power grid and other infrastructure has been intense — even more than Katrina's in some cases.

  • Electricity: The entire city of New Orleans lost power after all of its transmission lines were knocked out. Restoring full power could take weeks.

  • Oil and gas: Petrol prices are rising after Ida shut down a critical group of US oil operations, including more than 90% of production in the Gulf of Mexico. This has a huge impact on the rest of the country since Louisiana’s 17 oil refineries account for 20% of the US' capacity.

  • Insurance: The insurance industry expects Ida damages to be in the range of $15-20bn, compared to $65bn for Katrina.

It can take years to bounce back from natural disasters. A hurricane might only last a week, but the damage it causes can take years — or decades — to repair. New Orleans has still not fully recovered from Katrina, and we don’t yet know what Ida’s total toll could be.

Stat of the day

Whatsapp has been issued with the second-largest ever GDPR fine of €225m for breaching privacy regulations

Other stories to keep you in the loop

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  • Coca-Cola’s supply chain under pressure due to shortage of cans

  • UBS staff who choose not to get vaccine can work from home rather than office

  • Amazon offers punctual staff ÂŁ50 for turning up

  • YouTube Music passes 50 million subscribers — up 20 million in less than a year

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