27/02/2018 BBC Business Live

This is Business Live from BBC News

with Sally Bundock and Ben Thompson.

Stopping the sales.

The EU looks at how it can prevent

foreign takeovers it doesn't like.

Live from London, that's our

top story on Tuesday

the 27th of February.

Protectionism or keeping

crucial assets in-house?

Europe is deciding on its actions

in the face of growing

investment from China.

EU ministers are

meeting in Bulgaria.

We'll tell

you all you need to know.

Also in the programme.

The Sky's the limit.

US cable TV giant Comcast

makes a $30 billion bid

for Rupert Murdoch's

European TV operation.

And the trading day has

just begun in Europe.

This is how the main

markets are faring.

The new Fed Chair Jerome Powell

is speaking in Washington today.

And how and why do

things go viral online?

We meet one of the firms

that says it can do it

all for you - for a price.

We'll get the inside track

on the world of online marketing.

Today, we want to know

do social media ads reel

you in or switch you off?

Let us know.

Just use the hashtag BBCBizLive.

Hello and welcome to Business Live.

Packed as usual so let's get

started.

Does Europe need to do

more to protect itself

from foreign takeovers?

From German manufacuring to Greek

ports and UK data centres, there's

growing concern about how to make

sure investment

doesn't cost know-how.

And EU trade ministers

are discussing this at their meeting

in Bulgaria today.

Foreign direct invesment into the EU

- that's when companies

invest their money in foreign

countries - came in at $370

billion last year.

Not all of it is considered

uncontroversial.

The President of the European

Commission Jean-Claude Juncker said

in September, "Europe must always

defend its strategic

interests" such as technology,

defence and infrastructure.

One of the biggest deals to spark

concern was the 2016 purchase

of Kuka, Germany's largest maker

of industrial robotics,

by China's Midea for $5.5 billion.

And there is particular concern

about companies linked

to foreign governments.

As China looks increasingly overseas

at technology and manufacturing

interests, its investors spent

a record $43 billion

on EU purchases in 2016.

That's almost double

the previous year.

Just yesterday, Germany's financial

regulator said it would look

into the $9 billion investment

in the car-maker Daimler,

which owns Mercedes,

by China's Geely, which hopes

to access Damiler's technology.

With me is Miriam Gonzalez,

an expert on European

trade law at Dechert LLP.

Thank you for joining us. Sally

running through the details on what

strikes me about this is about

trying to decide which investments

are welcomed and which are not and

that is the difficult thing, isn't

it? Some industries will say, "We

need access to this intellectual

property and technology", but then

the government might say, "Yes, but

it's a crucial industry". How do you

decide what is important?

Maybe but

there are no new things in this

proposal, the EU members, including

the UK, by the way, carry on these

reviews significant foreign

investment in certain sectors like

nuclear energy, cyber security,

financial services. This is

something countries have been doing

for a long time. It is done outside

the EU regularly, the US have a

particular mechanism and in

Australia, likewise, and in Canada,

they have investment reviews. These

things have been happening for a

long time. All the EU is doing is

two things, one, to ensure there is

more coordination and transparency

between the different EU member

states and something which is truly

new is that the EU will have a say

it's self whenever there is EU

programme at stake and I think that

is particularly in the area of

energy where we will see the impact

of that but there's nothing

revolutionary in this.

One of the

particular concerns right now is the

role China plays around the world.

We know it is expanding its reach in

all sorts of industries,

particularly energy but also

security and that is where there are

concerns about how closely linked to

the state many of the Chinese firms

could be.

Yes, that is absolutely

right but it is only in certain

areas that are clearly defined that

the EU member states are going to be

doing this and what the EU

Commission and Jean-Claude Juncker,

who presented the proposal in

September last year is telling them,

what you are doing, we want to see

more coordination and crucially more

transparency. So the more

transparent these processes are, the

better for everybody. It is a system

in the general international trade

system, it is allowed to do

something like this so there is no

mystery in it.

The US is

particularly tough when it comes to

vetting foreign investment, and

also, as you've touched on, places

like Japan. Is Europe still seen as

a bit of a soft touch when it comes

to foreign investment in that they

can buy up crucial assets?

I don't

know whether a soft touch. I think

the fact we have the EU market as a

whole and yet some of these reviews

are being done at the national level

opens up some possibilities that you

may not find, for example, in the US

between the federal, state and the

estate themselves. There is a bit

more of a gap but I don't think it

says much as to how tough or not you

may be. It is normal that there may

be some skin purity with -- some

security concerns, for example, on

anything related to cyber security.

Provided you do the review in a

transparent and accountable manner,

I think that should be OK.

The

debate will run and run, I'm sure

but for now, thank you.

There could be a battle for control

of the European pay-TV giant Sky.

In the last hour or so,

US cable giant Comcast has launched

a $31 billion bid for company.

That's despite Rupert Murdoch's 21st

Century Fox already having agreed

a deal worth more than $25 billion

for the 61% of Sky it

doesn't already own.

Our correspondent Theo Leggett

is in the Business Newsroom.

This is interesting. I notice Sky

shares up 18% this morning.

And the

reason for that may well be that now

21st-century fox might have to

improve its own offer in order to

pull off the deal it really wants.

This announcement has really

throwing the cat among the pigeons.

Basically, pitting three of the

world's biggest media giants against

each other. On the one hand, you

have 21st to three fox which wants

to buy their share of Sky it does

not already own. That would be part

of a package sold onto the Walt

Disney company which wants to buy

21st-century fox's film and TV

assets and on the other hand,

Comcast, which has come in with a

surprise, all-cash offer, which it

says is superior to what Sky is

offering and Comcast says it wants

to take control of Sky because it

wants to expand internationally. It

says it would be happy to share

ownership with the Walt Disney

company but only if it has more than

50%, in other words, only if it has

full control and maybe Walt Disney

would not be particularly happy with

that. What we are going to see now

is a whole lot more toing and froing

and potentially higher bids as well.

Interesting as well because from

Rupert Murdoch's perspective, this

is another spanner in the works.

He's been desperate to acquire the

remainder of Sky for some time.

Yes

and he's been stymied for a long

time by regulators in Britain who

are concerned he was acquiring too

much influence in the British media.

Yeah, it's going to be interesting

to see what happens.

Thank you for

joining us. We will keep you right

across that story as we get more on

it this morning.

Let's take a look at some of

the other stories making the news.

The UK's minister for

International Trade is set to argue

that any form of customs union

with the EU after Brexit would be

a complete sell-out.

Liam Fox is expected to say having

EU limits on doing other deals

would make the UK less attractive.

On Monday, the leader of the Labour

opposition argued that staying in a

customs union would be best for

Britain.

Pre-tax profits at

Standard Chartered have

jumped to $2.4 billion

over the past year,

after a period of

painful restructuring.

Despite surviving the financial

crisis relatively unscathed,

the bank struggled when commodity

prices later crashed.

The firm makes the bulk

of its revenue in Asia.

South Africa's former finance

minister Nhlanhla Nene has been

re-appointed to the post

by the country's new

President Cyril Ramaphosa.

Mr Nene was controversially

sacked two years ago.

In a wide-ranging reshuffle,

the new president has ousted several

former allies of Jacob Zuma.

He's called it a new

dawn for the country.

China's top economic advisor

will visit the US today

to talk about trade,

a tricky subject between

the two countries.

US trade officials recently

threatened to impose

a tariff on steel imports,

leading to threats of

retaliation from China.

Sarah Toms is in Singapore to tell

us how significant this is.

We have heard from both sides come

if you impose tariffs, we will do

the same but it's just ratcheting up

the pressure, isn't it?

Absolutely

but this is actually pretty

significant. China's top economic

adviser shows that China is taking

the mounting trade tensions with the

US very seriously. Mr Lu is seen as

a close ally to Xi Jinping and it is

likely the trusted deputy on a

mission to lobby the US and restart

trade talks. As you said, there are

a couple of problems between the US

and China at the moment. The first

is, there's an investigation into

whether Chinese companies have

infringed intellectual property

rights. Mr Trump must make a

decision in the next few weeks.

Secondly, it has got a problem with

the Chinese steel imported into the

US, as you mentioned. That comes

after tariffs were slapped on solar

panels. It is not clear who Mr Lu

will meet in Washington and we don't

know if the talks will be successful

until the US makes a decision on Day

trade issues.

Thanks, Sarah. We will

keep an eye on how he gets on in the

US. Let's take a quick look at the

Asian markets.

Japan closing up over 1% higher

again, and Hong Kong, spoiling the

party a little bit. That is the

night before in the US. Moving on to

Europe, in the US on Wall Street, we

saw shares moving up to a four week

high, and in Europe right now,

markets across the board doing well,

Sky shares as we have mentioned up

some 18%, Liam Fox speaking today,

we have mentioned that as well so

keep an eye on the pound and the

euro for reaction to what he says.

In terms of Wall Street, let's go to

New York and find out what is on the

agenda there.

Ever since Jerome Powell took over

as chair of the Federal Reserve

earlier this month, markets have

been extremely volatile. He is not

to blame. It is because of

speculation about the pace of

interest rate rises in the US thanks

to strong economic data but

certainly, that timing -- bad timing

for Mr Powell. On Tuesday he will

present his first-ever semiannual

report to the House financial

services committee and is sure to be

grilled by lawmakers. Wall Street

will be watching with bated breath.

Department store chain Macy's will

report fourth-quarter results. Last

month the company announced it was

cutting thousands of jobs as it

struggles to compete with e-commerce

firms. And in a case which could

have wider implications, the US

Supreme Court will decide whether

Microsoft needs to turnover data

stored overseas to prosecutors in

America in a drug trafficking

investigation.

Joining us is Maike Currie,

Investment Director,

Fidelity International.

Good morning. Let's pick up on the

US theme because if you look at the

numbers now come you would be

forgiven for thinking one of the

volatility over the last couple of

weeks was never there, we're back up

to the levels of before.

We are, the

US markets as recouped a lot of

losses. All eyes on Jerome Powell.

This is his chance to draw a line in

the sand between him and his

predecessor, Janet Yellen. But of

course, she did a very good job on

reassuring markets, navigating the

path towards monetary normalisation.

The big question investors will be

looking for and scrutinising is

whether the US will have four

interest-rate rises this year. We

know three are on the cards but if

there could be another one.

Quickly,

I want to get your take on the

changes in South Africa. You are

from there, Cyril Roma Poser

announcing late last night a

brand-new cabinet with a new finance

minister, your thoughts?

I'm very

positive, I think Mr Nene is right

for the job. Cyril Ramaphosa is a

businessman, we need him to bring

about the change, economic growth

was nonexistent under Jacob Zuma and

unimportant at record highs so very

positive for the country and of

course a lot of companies are dual

listed on the Johannesburg stock

exchange and the FTSE 100 and those

companies like old mutual and

Anglo-American has benefited from

the regime change.

We will keep a

close eye on it. For now, thank you.

Still to come...

Is that must-watch video

really going viral -

or just some clever marketing

from big business?

We'll meet one of the firms

that promises views,

likes and clicks - for a price.

You're with Business

Live from BBC News.

First, let's talk about the Great

Northern Exhibition, which promises

to exhibit great art and innovation

from the North.

Steph is in Gateshead to find out

what is planned.

Hello, today they are launching the

great exhibition. In the summer for

80 days across the region there will

be various events celebrating the

art, culture and history of the

whole of the North region. It is

about inspiring the next generation

of people to come up with future

innovations, but it is also about

celebrating the past as well. One of

the things that is part of it is a

water sculpture. That will run along

the time in Gateshead, it separates

Newcastle from Gateshead. There is a

lot more to it as well. You are the

executive director, tell us a bit

more.

We have got a great example of

things we are showcasing in Lego and

some things from the Beatles to

grapheme, we are also creating a

virtual reality rocket. We have an

amazing, new 21st-century transport

port that will get you from Scotland

to Manchester in ten minutes. The

great North run. We are also

encouraging young people to be

inspired and create their own

inventions.

And we have got this

driverless car. Hello. It is a car

you can sleep in. Something for the

future. There is a competition

running as well which will see a lot

of little inventors. Some of them

are here. They have come up with

some great ideas about life in 2030.

A lot going on to celebrate and even

in the background we have got a

wonderful choir and band. Hello! I

will leave them to play us out. You

get it all on this programme.

It is all happening out there today.

Our business life page has the

latest on one of my favourite

subjects, pasties, pies and food.

Profits up at Greggs, but they were

down at the end of last year.

You're watching Business Live.

Our top story:

EU trade ministers are meeting

in Bulgaria to work out

what they can do to stop foreign

takeovers they don't like.

There's growing concern

about companies with government

links buying companies just

to access their technology.

Some particular criticism has been

levelled at many Chinese firms and

they deny that.

they deny that.

A quick look at how

markets are faring..

Sky and shares are up 18% with the

news that Comcast is making a play

for Sky, which sparks a whole new

story in that. That is all on our

website.

The chances are we will be talking

about that for the rest of the week.

In other news:

In

Companies are forever trying to come

up with ways to drum up sales

or increase clicks and views online.

And the best way to get

a brand or product to viral

is via social media.

But according to our next guest,

things don't just go viral by luck.

There's a whole industry behind it,

which two young British

entrepreneurs have built

a business around.

Social Chain is a social

marketing agency and social

media publishing house.

It owns and runs hundreds

of popular social media

accounts covering sport,

video games, fitness and food -

which have millions

of young followers.

Established by two then-students

in 2014, the company has grown

from just five staff two years

ago, to over 200 today.

And has an annual turnover of over

$12.5 million dollars.

that is £9 million.

that is £9 million.

Joining us is Steve Bartlett,

Co-founder and Chief Executive

of social media marketing agency,

Social Chain.

Welcome. We have done a little bit,

but explain in more detail how your

company works.

There I2 companies

within the group and that is the

media business which is called Media

Chain, and then the marketing agency

which takes all the things we have

learnt from running these big global

channels and works with the world's

biggest brands to help them reach

young people.

Explain how this

began. This is about you spotting

what people are genuinely interested

in. Then finding out why people are

watching and relating back to

brands. How do you find those

interesting things in the first

place?

I was an 18-year-old

university dropout building a

website and in doing so I became a

marketeer as well. I had to find out

how people came to my website. I had

a couple of thousand pounds, but I

needed a 1 million people for it to

prove the concept. I tried taking

ads out in newspapers and the

conventional things and they did not

work. It was not until I bought a

small Facebook page and posted my

website there that people came. I

doubled down on that and I found

myself going around the world

meeting every person I could who had

built a big social media channels in

their bedrooms. They all happen to

be super young. I met a 17-year-old

kid who had 15 million followers who

was running a fitness channel. We

all came together and acquired all

those assets and a few years ago we

started Social Chain.

For companies

who want to sell things, that is a

gift for them and you are giving

them access.

We never meant to start

marketing business or a media

company, that was never our design.

We were trying to figure out how to

get people to come to our product.

Then I got a call from a big brand

and I realised the website I was

building was less effective than the

social media site. Six or seven

years ago nobody would have

considered posting a brand on a

social media page.

How do you make

money from all of this?

From the

media side brands will come to us,

we have 370 million followers across

different niche is, sports, food,

parenting, and they will come to ask

if they want to appear on these

slots. On the marketing side they

will come to ask if they want

challengers to solve. They might be

working out how to use social media

to get them to check them out.

What

I don't get is if there is a good

bit of content, a funny video, a

cute video of a cat, I can see how

that might go viral. But if I am a

brand and I come to you with a

corporate video and I wanted to go

viral, how do you make people watch

content that they don't want to

watch?

We might say no. We say no

much more than we say yes. When it

comes to our own video service we

note in the audience is we gave them

content and made them feel that the

content they cared about was what

they wanted. If it was tough to talk

about, our job is to try and find

the story in the brand that will

resonate with our audience. It is

like making movies. We are trying to

make content that will entertain and

make people feel something and if

they do, they will earn a share of

the brand's life.

Briefly, we are

out of time. Do you feel a

responsibility when it comes to your

audience?

100%. We will never speak

to our audience that will make them

feel inadequate orally to

addictions. We have a strong ethical

code and with power comes

responsibility.

Thank you for coming

in. Absolutely fascinating.

Absolutely fascinating.

China's Huawei is the world's third

biggest smartphone maker but it's

having big problems trying

to sell its handsets in the world's

biggest economy, the United States.

The company's mobile boss has

told our correspondent

Rory Cellan-Jones it's

because of commercial reasons and US

security concerns are misplaced.

Every year we have strong

growth, every year.

We have the chance to be the number

one, maybe not far away.

Do you really think one day

you could be number one?

Yes.

Global smartphones?

For sure.

We have a chance.

Now, one of the problems

for you in achieving

that is trying to get

into the US market.

You are nowhere in the US market

because American politicians

don't trust you.

Why do you think that is?

Because, you know, some guy,

some political things trying to

keep us out because we are too

competitive but we have leading

technology, leading innovations.

They worry about that.

We're too strong.

Is that why American politicians

want to keep you out

because you're too competitive or

because they worry you are too close

to the Chinese government?

They are trying to say

that but actually we

are an independent company.

They are trying to use

kind of political

things to keep us out.

An interesting conversation. You

have rejoined us to talk about some

of the stories in the papers. We are

asking people related to our

previous guest about social media

ads and whether they are turned on

or turn off. Have you ever bought

anything from an advert on social

media?

No. I think the whole point

of social media was to connect with

people you have not seen in a long

time or people who share common

interests with you and adverts are a

distraction and they are an invasion

of privacy because they look at what

you are browsing. I have never

bought anything.

Luke says the same,

I am not interested in the

slightest. Ian says, if they are

about things I am interested in I

don't mind.

Good content is far more

powerful than advertising.

The world

has changed. Time is tight, but

really nice to see you this morning.

Thank you for your company, we will

see you tomorrow.