:00:04. > :00:14.it an anti-Putin punk anthem in at a cathedral.
:00:14. > :00:15.
:00:15. > :00:20.Now it is time for World Business Report.
:00:20. > :00:24.Welcome to World Business Report. The headlines: After months of
:00:24. > :00:29.talks, the board of Xstrata or is set to back the offer from Glencore
:00:29. > :00:32.in what could be the biggest merger this year. With Spain under
:00:32. > :00:39.pressure from the financial markets over its debt levels, we look at
:00:39. > :00:49.how the on our hardest hit. An anti-corruption initiative which
:00:49. > :00:53.
:00:53. > :00:56.takes effect today in China could impact the luxury goods market.
:00:56. > :01:00.It's worth $80 billion. It could be the biggest merger this year. Today,
:01:00. > :01:05.the board of the mining firm Xstrata is expected to finally back
:01:05. > :01:09.a merger offer from Glencore. The two companies may both be in mining
:01:09. > :01:12.but they operate in different areas. Xstrata extract coal, copper and
:01:12. > :01:16.nickel from the ground, while Glencore is a commodities trading
:01:16. > :01:19.house. The deal has been in the works for seven months, held up by
:01:19. > :01:24.disagreement over price as well as the huge pay packages for the
:01:24. > :01:31.management. Shareholders must still backed the deal. It will be put to
:01:31. > :01:35.a vote in late October. I am joined by Rupert Nathan from a financial
:01:35. > :01:40.services firm. And as we have said, Xstrata is
:01:40. > :01:46.finally likely to recommend this deal today. It is by no means a
:01:46. > :01:52.done deal. The rumours over the weekend have been pointing towards
:01:52. > :01:56.the board of Xstrata recommending this. If they do make the
:01:56. > :02:01.recommendation it will have to go to a vote at the end of the month.
:02:01. > :02:05.What will happen in their vote? Some key shareholders are not
:02:05. > :02:12.revealing where they are at as far as this deal is concerned, are
:02:12. > :02:16.they? Yes, Qatar is at the centre, and they are the kingmakers in this
:02:16. > :02:20.game. They, as well as the Norwegians are often well funds who
:02:20. > :02:26.have come out against. Other, more vocal shareholders such as
:02:26. > :02:30.Blackrock have expressed unhappiness with either the quantum
:02:30. > :02:34.of what has been paid, or, alternatively, the controversial
:02:34. > :02:38.share retention packages. If we talk about the price at this point
:02:38. > :02:45.that, what has been the feeling about that? Why have they not been
:02:45. > :02:50.happy with this price? It is far too low. Right from the outset.
:02:51. > :03:00.Back in February - 2.8-one was quoted as the ratio. The bottom
:03:01. > :03:03.
:03:03. > :03:10.line was that the CEO of Glencore felt that with 34% it would go
:03:10. > :03:16.through. A few months ago, Qatar has been adding to its stake and
:03:16. > :03:25.they emerged at 12%. Bear in mind, it only takes 16.5 % to scuttle the
:03:25. > :03:30.deal. It was in jeopardy. The opposing shareholders but -- knew
:03:30. > :03:40.that life had been breathed into the opposition. In terms of who is
:03:40. > :03:52.
:03:52. > :03:55.running this company, it's going to be Mark gleys and -- Glesenburg....
:03:55. > :04:02.Originally, 72 key managers were going to be kept after the merger.
:04:02. > :04:09.This included the CEO, who was looking into a $30 million pay-out
:04:09. > :04:18.for staining for three years. Along with the 3.054 at one revised price,
:04:19. > :04:26.it was agreed, or rather, proposed, That the C O would step in after
:04:26. > :04:30.six months to take over from Mick Davis -- the CEO. Now we are still
:04:31. > :04:37.talking about $140 million, still a sticking point Mac. If this is
:04:37. > :04:42.recommended today by Xstrata, will shareholders vote against it?
:04:42. > :04:51.still a very close thing. We think there is much further to go. I'd be
:04:52. > :04:57.looking to see what Qatar and the other shareholders have to say.
:04:57. > :04:59.We are expecting this deal in 1.5 hours when the London market's good
:05:00. > :05:03.all the information. We will tell you about it then.
:05:03. > :05:08.The Spanish government has predicted that debt levels will
:05:08. > :05:12.rise further next year as much as 90.5 % of the country's total
:05:12. > :05:17.wealth. That is because of the money spent bailing out the banks.
:05:17. > :05:21.The country is suffering from record levels of unemployment. As a
:05:21. > :05:26.part of our series on the UN and jobless, we look at how the
:05:26. > :05:31.shrinking public sector is hitting the young are hardest -- the young
:05:31. > :05:40.and jobless. This has become a noisy daily
:05:40. > :05:47.routine. Every morning, people who work in Spain's public hospitals
:05:47. > :05:51.cut the traffic on this main road in Madrid. (CHANTING). Angry about
:05:51. > :05:58.government cuts, they are marshalled by the police. This is
:05:58. > :06:01.an indication of just how strongly people feel in Spain about the cuts
:06:01. > :06:08.to public health. There is one section of society that is
:06:08. > :06:14.particularly affected by austerity. That group is the young. Students
:06:14. > :06:24.like this woman, who is now studying to become a doctor. When
:06:24. > :06:24.
:06:24. > :06:27.she finally finishes, four you're - - she will do for years as a junior
:06:27. > :06:31.doctor. She knows it will be hard with ever-diminishing resources in
:06:32. > :06:36.the public health system. I am worried that I won't find anything
:06:36. > :06:40.in my speciality because it is difficult to study and work for
:06:40. > :06:45.about ten years and then going to a hospital and not find anything.
:06:45. > :06:48.It's really, really hard. What if you don't find anything in your
:06:48. > :06:54.speciality? I'm sure that I'm not going to stay here until someone
:06:54. > :06:58.tells me that I have a place. I'm going somewhere else, because I
:06:58. > :07:05.want to work as a doctor. Then there are the junior doctors of
:07:05. > :07:13.today. This woman is a psychiatrist. She is on a temporary contract with
:07:13. > :07:23.no guarantee of work beyond this month. When I started my speciality,
:07:23. > :07:30.I thought I would have established work, a permanent job in public
:07:30. > :07:33.health. Quite well paid. But I think this is a thing of the past.
:07:33. > :07:39.Analysts say austerity is hurting the young are the most.
:07:39. > :07:49.government wants to reduce public sectors. They need less public
:07:49. > :07:50.
:07:50. > :07:58.workers. They have two ways to do that, they can lay off existing
:07:58. > :08:02.people, or they cannot contract to new people. The frost at --
:08:02. > :08:07.frustrations spilled over last week. There is likely to be more of this
:08:07. > :08:11.to come. You can find out more about Spain's
:08:11. > :08:21.young public sector workers and useful tips on hunting for work
:08:21. > :08:22.
:08:22. > :08:26.where you are attack website. -- at our.
:08:26. > :08:31.Let's go to Singapore for the latest on China's luxury goods
:08:31. > :08:36.market. This story came to the fore last week. We had luxury good
:08:36. > :08:41.results, they were talking about this day to day as the key for
:08:41. > :08:46.luxury goods retailers. It is key, because it is the autumn
:08:46. > :08:50.festival. That is when the Chinese go out and spend. It may be
:08:50. > :08:59.hampered by this latest anti- government initiative where the
:08:59. > :09:03.government is imposing a frugal working style rule on its employees.
:09:03. > :09:08.This is hoped that it will prevent government employees from spending
:09:08. > :09:11.money on lavish banquets and fancy cars and accepting gifts. Gifts are
:09:11. > :09:16.often returned in exchange for favours, where bribery is
:09:16. > :09:20.widespread. Analysts are say that this initiative could impact the
:09:20. > :09:24.retail luxury market as a quarter of gift-giving has been a source of
:09:24. > :09:28.demand for the world's leading luxury brands. To give you some
:09:28. > :09:34.facts - Chinese consumers spent an estimated $50 billion on luxury
:09:34. > :09:36.goods last year. They are one- quarter of a global market worth
:09:36. > :09:41.about $197 billion. The Chinese are poised to overtake the Americans
:09:41. > :09:45.this year as the biggest buyers of luxury goods in the world. Analysts
:09:45. > :09:52.say 20% of the luxury goods Chinese people they are for gifts. Gifts
:09:52. > :09:59.are often used to grease the wheels, the wheels of relationships that
:09:59. > :10:05.help with jobs and promotions. The market some mixed, which is
:10:05. > :10:08.good considering the news we have had out of Asia today. We have had
:10:08. > :10:13.an influential survey out of Japan to show how manufacturers are doing
:10:13. > :10:16.- it's very pessimistic. Chinese data is showing contraction as well