The world this week

Business this week

Travis Kalanick resigned as Uber’s chief executive. The ride-hailing firm has come under fire for its abrasive corporate culture and a series of sexism scandals, among other things. Mr Kalanick had already announced an indefinite leave of absence. That was not enough for five of the firm’s big shareholders, who signed a letter demanding his departure. He will continue to serve on Uber’s board. See article.

In its prime

Amazon, an American internet giant, announced that it would acquire Whole Foods, a fancy supermarket chain specialising in organic food, for $13.7bn. Share prices of other grocery stores plunged in the expectation that Amazon will change not just Whole Foods, but the whole sector. See article.

The Bank of England voted to keep interest rates at 0.25% in light of Britain’s weak economy, despite higher-than-expected inflation of 2.9%. The bank reckons inflation could rise above 3% in the autumn, and remain above its 2% target for an extended period, due to a weakening pound. The bank also appointed Silvana Tenreyro, a professor at the London School of Economics and a critic of Brexit, to its monetary-policy committee.

America’s current-account deficit widened to $117bn in the first quarter of this year, up by 2.4% from the last quarter of 2016. That was still less than analysts had expected.

Klarna, a Swedish payments firm, gained a banking licence. The firm, which has 60m customers across Europe and processed €13bn ($14.7bn) in transactions last year, is the largest European financial-technology firm so far to become a fully fledged bank. See article.

The integration of China into the world’s financial markets took another step as MSCI, an index provider, decided to include shares of 222 companies listed in mainland China in its widely followed emerging-markets equity index, which is tracked by managers with $1.6trn in assets. The firms’ shares will account for 0.73% of the total index, adding to the 28% already made up of Chinese shares listed elsewhere. MSCI held off on upgrading Argentina from a frontier market to an emerging market, contrary to the expectations of some. See article.

Argentina nonetheless sold $2.75bn in 100-year dollar-denominated bonds, joining the likes of Mexico, Ireland and Belgium in issuing such “century bonds”. Argentina is the first to do so without the benefit of an investment-grade rating, having only recently returned to international capital markets. Demand from investors was strong, although the country has defaulted eight times on its sovereign debt since 1824. See article.

Russia also sold more than $3bn in sovereign debt, much of it to Western investors, in only its third issue after the imposition of sanctions over the conflict in Ukraine in 2014.

Imagination Technologies, a British chip designer, put itself up for sale. The company’s shares fell by more than 60% in April when Apple, its largest customer, announced it would no longer use the firm’s technology in its new phones.

Britain’s Serious Fraud Office charged Barclays, a bank, its former head, and three other former executives with fraud over deals with Qatar in 2008 that helped keep the bank afloat. The bank raised a total of £11.8bn ($21.4bn) in capital that year, much of it from the Qatari sovereign-wealth fund and a fund representing the country’s then prime minister; the bank granted the Qatari government a $3bn loan facility that November. The case marks the first criminal charges to be filed against the head of a big international bank as a result of the financial crisis. See article.

Frackers unite

EQT Corporation, an American natural-gas firm, agreed to acquire its competitor, Rice Energy, in a $6.7bn deal. Both firms are based in Pennsylvania and focus on fracking. The new firm will be America’s largest natural-gas producer.

Rio Tinto, an energy giant, rejected a $2.6bn bid for its Australian coal assets from Glencore, a Swiss commodities firm. Rio’s boss said an earlier offer for $100m less from Yancoal, the Australian subsidiary of a Chinese coal firm, offered greater “transaction security” to shareholders.

Lofty expectations

Vice Media secured a $450m investment from TPG, a private-equity firm. The deal values the media upstart, which also counts Disney and Rupert Murdoch’s 21st Century Fox among its shareholders, at a whopping $5.7bn.

Boeing unveiled a new, larger version of its 737 narrow-body aeroplane at the Paris Air Show. The 737 Max 10 can fit up to 230 passengers and has already won 240 orders. Airbus revealed new fuel-efficiency improvements for its A380 superjumbo, which received no new orders last year.

This article appeared in the The world this week section of the print edition under the headline "Business this week"

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