- G7 advanced economies land on 'historic agreement' for minimum tax for multinational companies
- IWG warns on profits
- Reckitt to sell China infant formula business
Good morning and welcome to the IC’s live blog, where we round up the biggest business stories of the day and news from the weekend.
G7 tax agreement
The G7 advanced economies have landed on an “historic agreement” on a global minimum tax for multinational companies. Finance ministers from the US, UK, Japan, Germany, France, Italy and Canada met in London over the weekend, where they committed to a global minimum corporate tax of at least 15 per cent. US treasury secretary Janet Yellen said that it would “ensure fairness for the middle class and working people in the US and around the world.”
UK chancellor Rishi Sunak, who chaired the group this year, said that he and his financial counterparts had reached an “historic agreement on global tax reform requiring the largest multinational tech giants to pay their fair share of tax in the UK.”
The agreement signals that the largest global companies, with profit margins of at least 10 per cent, will have to allocate at least 20 per cent of their global profits to countries where they operate. The move is likely to affect big businesses such as Alphabet parent Google (US:GOOGL) and Facebook (US:FB).
RB announces disposal
Meanwhile, turning to the FTSE 100, consumer goods giant Reckitt Benckiser (RB: Buy, 24 Feb 2021) revealed on Saturday that it had agreed to sell its infant formula and child nutrition (IFCN) business in China to private equity firm Primavera.
The deal attributes an enterprise value of $2.2bn to the business. Reckitt will retain an 8 per cent stake and expects to receive net cash proceeds of roughly $1.3bn.
IWG warns and house prices escalate
Looking to the FTSE 250 index, a profit warning from IWG (IWG) sent shares in the flexible workspace provider down 15 per cent as the London market opened on Monday. Occupancy rates since the end of March have been lower than expected, the group said in a trading update, because of the “prolonged impact of Covid-19”.
And in property news, UK house prices reached another record high in May, data from the Halifax house price index revealed this morning. Annual growth surged to 9.5 per cent, the index showed, meaning the average UK home has increased in value by more than £22,000 over the past year.
Last week the Nationwide House Price index indicated that annual house prices had risen more than a tenth in May. Emma Powell asked in April whether house prices could maintain their high annual growth rate.
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