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Inside

Magic

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Makers of

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Paddy Dear

Hole lot

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World

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Business

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Get the latest markets info, share prices and create a portfolio at telegraph.co.uk/markets-hub

By Oliver Gill

HONG KONG’s richest man has made a
bid to become one of the biggest
players in the British beer business,
with a £4.6bn takeover of Greene King,
the FTSE 250 brewer and owner of
3,000 pubs.
CK Hutchison, the conglomerate
controlled by 91-year-old billionaire Li
Ka-shing, sprung a surprise yesterday
afternoon with an 850p-a-share deal

that valued  shares in the 220-year-old

brewer and pub company at a premium

of more than 50pc.

The deal further expands Mr Li’s

involvement in the British consumer

economy and property. CK Hutchison

already owns Superdrug and the

mobile network Three, among other

UK assets.

The bid won the support of Greene

King’s board, who in May bid farewell

to the company’s longstanding boss

Rooney Anand.

It comes just weeks after private eq-

uity firm TDR Capital struck a £3bn

deal for portfolio company Stonegate

to buy Ei, Britain’s biggest pub group,

and forms part of a wave of buyouts

this summer. Merlin Entertainments,

BCA Marketplace and Inmarsat have all

been targeted for delisting.

CK Hutchison’s planned takeover of

Greene King immediately raised fresh

concerns over the future of pubs, de-

spite reassurances that the owners be-

lieve “pubs will continue to be an

important part of British culture”.

The Campaign for Real Ale (Camra)

has warned that about two pubs per

day are being closed, with many rede-

veloped as housing. Last year Fuller’s,

one of London’s oldest breweries,  was

bought by Japanese firm Asahi.

Nik Antona, Camra’s chairman said:

“The news that Britain’s largest pub

and brewery company has been sold to

an international asset company is very

concerning for our beer scene. We will

be calling on the new owners to retain

the current portfolio to safeguard thou-

sands of pubs and jobs across the coun-

try.” Representatives of both Greene

King and CK Noble insisted that there

would be no change in strategy.

Chief executive Nick Mackenzie will

remain in his post, although chairman

Philip Yea will step down if the deal is

given the green light by investors. CK

Hutchison said that it “does not intend

to make material changes with regard

to the continued employment of the

employees and management”.

Mr Mackenzie said that CK “shares

many of Greene King’s business phi-

losophies”.

CK Hutchison is one of the biggest

overseas investors in Britain, also own-

ing rolling stock and the Port of Felixs-

towe as part of a sprawling global

business that last year reported reve-

nues of £48bn. The empire, listed on

the Hong Kong stock exchange, was

founded by Mr Li as a plastics maker in

1950. It is now led by his son Victor, 55,
      while Mr Li remains a revered figure in
      Hong Kong. Last week he made an

ambiguous contribution to the political

turmoil gripping the territory with an

advertising campaign that warned “the

best intention can result in the worst

outcome”.

George Magnus, chairman of CK

Noble, the CK Hutchison subsidiary

behind the bid for Greene King, said its

strategy was to “look for businesses

with stable and resilient characteristics

and strong cash flow generating capa-

bilities”. “The UK pub and brewing sec-

tor shares these characteristics and we

believe that this sector will continue to

be an important part of British culture

and the eating and drinking out market

in the long run,” he said.

Comment: Page 28

Container

giant breaks

world record

By Alan Tovey

THE world’s biggest container ship, the
MSC Gülsün, has docked in Germany
after its maiden voyage from China.
The 1,312ft (400 metre) vessel has
broken the cargo capacity record amid
trade fears in light of the tariff war
between the US and China. MSC Gül-
sün is longer than 36 London buses and
can transport  23,576 standard 20ft-
long shipping containers – or TEUs
(Twenty Foot Equivalent Units).
The owner, Mediterranean Shipping
Company, says it can carry 8.35m
microwave ovens, 223m bananas or
386m pairs of shoes in one load. To
carry that by road would need 14,000
lorries, or by air 1,350 jumbo jets. Con-

tainer ships have been getting bigger
for years as firms seek economies of
scale and there is no theoretical limit to
their size, says shipping expert Dr Paul
Stott of Newcastle University.
“Building in steel, this isn’t the larg-
est you can go,” he said. “In the Seven-
ties, we saw oil tankers go to 1,500ft.”
Geneva-based MSC is confident the
ship’s size will generate economies of
scale and has ordered a further 10 ves-
sels the same size, built in South Korea
by divisions of Samsung and Daewoo.
Gülsün’s size also helps lower the
line’s carbon footprint, with larger ves-
sels emitting less CO2 per TEU trans-
ported while fuel consumption is lower
thanks to a design that cuts water and
wind resistance.

‘Exporters took a pounding

from the unwinding of the

stockpiling ahead of the

UK’s departure from the EU’

Greene King toasts £5bn Hong Kong bid

CK Hutchison, the owner

of Three and Superdrug, in

swoop for Britain’s biggest

brewer and pub group Li Ka-shing’s
850p-a-share offer
valued shares in the
220-year-old brewer
at a premium of
more than 50pc

23,576

Number of standard 20ft shipping
containers the South Korean-built MSC
Gulsun can transport at one go

STRINGER/EPA-EFE/REX

Germany’s

output slump

raises alarm

By Michael O’Dwyer

GERMANY is on the brink of a reces-

sion as its central bank warned yester-

day that Europe’s largest economy is at

risk of shrinking further.

German output will remain lacklus-

tre and “could continue to fall slightly”

in the third quarter, the Bundesbank

said, heightening fears of a global eco-

nomic slowdown. Europe’s industrial

powerhouse contracted 0.1pc in the

second quarter after its export-reliant

economy found itself caught in the

middle of the US-China trade war.

A decline in the third quarter would

tip Germany into a technical recession,

its first since 2013. However, German

stock markets rose after reports that

Angela Merkel’s government plans to

boost public spending by €50bn

(£45bn) to help kick-start the economy.

The European Central Bank (ECB) is

under pressure to introduce stimulus

measures with eurozone inflation just

1pc. Olli Rehn, governor of Finland’s

central bank, wants the ECB to unveil

“impactful and significant” stimulus.

The Bundesbank blamed persis-

tently weak momentum in industry

and foundering international demand

for the economy’s ongoing struggles.

Exporters took a pounding from the

unwinding of the stockpiling that

boosted sales at the start of the year

ahead of the UK’s planned departure

from the EU in March. The downturn

in China has hit Germany’s car indus-

try hard – it accounts for more than a

third of BMW and Daimler sales.

Google venture backs out of car-making BA and Shell’s ‘green’ jet fuel

By Olivia Rudgard in Detroit

WAYMO, the self-driving car ven-
ture,  has ruled out building its own
vehicles from the ground up because it
is “really hard”.
Speaking as the company prepared
to open a Detroit factory that will be
used to fit Chryslers and Jaguars with
Waymo self-driving software, supply
chain chief Patrick  Cadariu also said
building cars would be a “distraction”.
“Our goal is not to build cars. It’s to
build the world’s most experienced

driver. So that is our core business.

There’s other people that are very, very

good at making cars ... and we’d love to

work with them,” he said. 

Waymo, founded by Google in 2009,

has established a taxi service in Phoe-

nix, Arizona, where it has begun to

operate some cars without backup

drivers. Most self-driving car compa-

nies are taking a similar approach, by

fitting existing cars with autono-

mous  technology, but one of Waymo’s

Silicon Valley rivals, Zoox, founded in

2014, plans to build its own cars. Jesse

Levinson, its co-founder, has previ-

ously said that its approach “makes a

lot of sense” because it can create a car

specifically designed to be driverless.

“We’re actually solving kind of the en-

tire problem holistically as one com-

pany,” he said last month.

Mr Cadariu added: “My worry with

some players is what are their core com-

petencies, what are their strengths, and

are they focusing on solving the right

problems, or are they being distracted?”

Detroit’s self-driven future: Page 31

By Oliver Gill

BRITISH Airways and Royal Dutch

Shell have submitted plans to build

Europe’s first plant that converts

household waste into jet fuel.

The duo will work with Velocys, a

sustainable fuel specialist, on the site

near to the Humber estuary in North

Lincolnshire. It is hoped that around

half a million tons of rubbish destined

for landfill will be converted into

cleaner-burning aviation fuel.

Although this will be the first site

making the fuel in Europe, BA won’t be

the first to use biofuel to power its

planes: Virgin Atlantic used a 5pc mix

of biofuel for a transatlantic service

last October.

Alex Cruz, BA chief executive, said

the planning application “marks a

major milestone in this project”.

He added: “This development is an

important step in the reduction of our

carbon emissions and meeting the

industry targets of carbon neutral

growth from 2020, and a 50pc in CO2

reduction by 2050 from 2005 levels.”

Onlookers watch the MSC Gulsun sail through the Suez Canal near Ismailia, Egypt, earlier this month en route to Europe. It can carry a load equivalent to that of 14,000 lorries

Hacking risk as big banks play catch-up with digital challengers

By Matthew Field

BIG banks racing to mimic the success
of digital challengers must face up to
the risk of being hacked, an official at
the European Central Bank (ECB) has
warned. 
Korbinian Ibel,  director general at
the ECB’s supervisory arm, said “acci-

dents” are bound to happen as  major

banks add  mobile banking fea-

tures similar to those developed by the

likes of Monzo and Revolut.

“There will be accidents, especially

in the cloud,” said Ibel. “It’s not that

clouds are more vulnerable, they’re ac-

tually often better protected than in-

house systems, but they’re seen as

juicy targets.” Last month,  Capital

One  said that data from about 100m

people in the US was illegally accessed.

In addition to data such as names,

addresses, phone numbers, email ad-

dresses, dates of birth and self-reported

income, the hacked detail included

credit scores, credit limits and bal-

ances, as well as fragments of transac-

tion information. So far, European

banks have  been spared a data breach

of this size, but Ibel said that may

change as banks  face increasing

pressure to reduce costs with new

technology.

Banks  have responded to the digital

revolution by hiring tech experts.

However, Ibel said more needs to be

done. “The rule is that the banker is

always responsible for their data and

services.  You need a common under-

standing at board level of the needs and

risks of IT,” he said.

A report from security researchers

Arxan found 130 critical vulnerabili-

ties across 30 finance apps for Android

over Europe and the US. The research-

ers did not identify the apps, but re-

ported that larger firms tended to have

more problems with their retail bank-

ing apps.

Several European banks already use

cloud technology from tech giants

including Microsoft or Amazon, which

sees more information stored in exter-

nal data centres.

The Daily Telegraph Tuesday 20 August 2019 *** 27

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