Apple ‘in £1.5bn talks to buy supercar maker McLaren’

A McLaren P1 supercar at their Surrey headquarters

Apple has been linked with a shock £1.5bn deal to buy McLaren Technology Group, the Formula One team owner and supercar maker.

A deal between Apple and the British company would dramatically shake up the technology and automotive industries. The California-based company’s interest in McLaren Technology Group highlights its ambition to develop technology that could be used in an electric and driverless car.

Apple has approached McLaren about a takeover but could also make a strategic investment in the company, the Financial Times reported.

McLaren denied that it was in talks with Apple, but it said: “As you would expect, the nature of our business means we regularly have confidential conversations with a wide range of parties, and they need to remain so.

“We can confirm that McLaren is not in discussion with Apple in respect of any potential investment.”

Apple said it “does not comment on rumours or speculation”.

McLaren builds supercars such as the P1, which costs £866,000 and includes ground-breaking technology such as a lightweight electric motor, carbon fibre body panel, and on-board computer systems. The company is also developing a range of technologies for use in healthcare, energy and transport.

Ron Dennis, the chair and chief executive, has expanded the company dramatically from its origins in Formula One, where it is one of the most successful teams in the history of the sport despite struggling in recent seasons. The company is based in Woking, Surrey, in a futuristic headquarters designed by Norman Foster.

Dennis would be in line for a multimillion-pound windfall if a deal with Apple goes through. He owns 25% of McLaren Technology Group while Tag Group, a Luxembourg-based holding company led by Mansour Ojjeh, owns another 25% and Bahrain’s sovereign wealth fund Bahrain Mumtalakat holds the other half of the business.

McLaren Technology Group’s last financial results show the company recorded sales of £266m in 2014 and a pre-tax loss of £23m. It produces roughly 1,500 cars a year but has pledged to spend £1bn on research and development over the next six years.

Analysts said a move for McLaren would make sense for Apple. Neil Campling, analyst at Northern Trust Capital Markets, said it would provide Apple with “instant credibility” in the automotive industry and that the companies had “an unusual level of compatibility in design and business outlook”.

He added: “The attractiveness of McLaren – the designer of very high-end automotive products on and off the race track – to Apple, with its own reputation for design-centricity and technological expertise, is quite obvious. McLaren’s tagline could almost be Apple’s – ‘Designed and Engineered to Win’.

“Apple has the balance sheet to do it – they could do the deal for only a fortnight’s free cash flow – and there are logical commonalities in business model. Perhaps the real jewel in McLaren’s crown from Apple’s perspective is its applied technologies business, the [research and development] lab born from their Formula One expertise.

“If, as has been rumoured for some time, Apple is serious about the autonomous vehicle market, buying McLaren gives them instant credibility in the sector and brings with it an unusual level of compatibility in design and business outlook. It won’t shift the Apple dial much on its own so we read it as a statement of intent regarding autonomous vehicles.”


UN warns over global fallout from debt crisis in poor countries

Workers unload tomatoes at a market in Enugu, Nigeria

Fears of a fresh debt crisis in developing countries that would send shockwaves through the global financial system have been highlighted by a United Nations report stressing the vulnerability of poor states to falling commodity prices and higher interest rates.

The annual report from the UN conference on trade and development (Unctad) said the benefits of the debt relief provided to some of the world’s poorest countries as a result of the mass public campaigns of the late-90s and early 2000s were “fast evaporating”.

It said a number of countries – mainly in sub-Saharan Africa – had been forced to seek help from the International Monetary Fund and the World Bank, adding that the international community needed to be better prepared to manage a new crisis.

According to the IMF, 36 countries had received financial assistance worth $76bn under the Heavily Indebted Poor Country initiative, but Unctad said rushed attempts to integrate poorer countries into international financial markets after the 2008 global recession had left them vulnerable.

“Easy access to cheap credit in boom times has led to growing debt levels across the developing world. Developing country external debt stocks alone rose from $2.1tn in 2000 to $6.8tn in 2015, while overall debt levels rose by over $31tn between 2000 and 2014, with total debt-to-GDP ratios in many developing countries reaching over 120% and in some emerging economies over 200%.”

Many developing countries borrowed heavily when commodity prices were booming in the years after the 2008 financial crisis, and Unctad said the falling cost of oil, metals and food has made it harder for them to repay their debts. The threat of higher US interest rates after a prolonged period of sluggish growth in the west would add to the problems of the most heavily exposed countries, it said.

“Only a couple of years ago, the amount of debt that low-income developing countries could have sold to eager investors seemed almost limitless. International sovereign bond issuance in these economies rose from a mere $2bn in 2009 to almost $18bn in 2014,” Unctad said.

An oil pumpjack works at dawn in the Permian Basin oil field in Andrews, Texas


EC wants to axe mobile phone roaming charges next year

A woman uses a mobile phone

Consumers across Europe should be able to pay the same for using their mobile phones abroad as they do in their home country for an unlimited number of days, under plans being debated by the European commission as it tries to abolish roaming charges.

The commission discussed new proposals on Wednesday as part of an EU plan to abolish roaming charges by June 2017, after Brussels officials were forced into a U-turn.

Roaming charges have become a political football, as the EU executive searches for ways to give the European project more popular appeal amid the eurozone debt crisis and Brexit negotiations.

The cost of sending messages and making calls abroad has been slashed by more than 90% since the EU began capping roaming charges in 2007. Now the commission wants to phase out roaming charges entirely by next year.

But Jean-Claude Juncker, the European commission president, ordered his officials to rewrite the draft plans after deeming they did not go far enough.

Under a previous draft, telecoms companies would have been allowed to charge people more for using their phones abroad for more than 90 days a year. But Juncker ordered his officials to go back to the drawing board, after criticism from members of the European parliament.

The change has alarmed the telecoms industry, which argued that 90 days was already stretching the definition of periodic travelling. The average EU citizen is abroad for 12 days a year and only 0.1% of European consumers will be affected by abolishing the 90-day cap.

Andrus Ansip, a European commission vice-president, said the earlier plan had not won support. “It wasn’t accepted by member states or service providers. It was one idea, [but] it didn’t fly.”

Mobile phone costs vary significantly across the 28-country bloc, with prices in Latvia more than six times cheaper than in Ireland. Phone companies are concerned the law would mean consumers could buy cheap sim cards in one country and use them permanently in another. They claim cheaper companies would be saddled with the higher costs of customers who are not genuinely roaming.

In response, the commission has promised to introduce safeguards: telecoms companies would be able to check on consumers who appear to be permanently roaming and charge them more. Customers will be able to complain to national telecoms regulators if they dispute the charges.

Consumer groups argue that phone users face unjustified costs. One survey cited by the European Consumer Organisation (BEUC) found that roaming calls could cost up to €2 (£1.70) a minute – 20 times more than the cost of making a domestic call.

Monique Goyens, the BEUC director general, welcomed the decision to drop time limits on roaming. “Consumers should be able to make phone calls, send messages and use the internet for the entirety of their stay abroad and not be charged additional costs when travelling for a long period of time, working or studying in another EU country.”