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Brazil. Now, it is time for World Business | :00:00. | :00:00. | |
Report. Omnicom and Publicis call off their | :00:00. | :00:29. | |
billion`dollar merger. And, the euro makes a comeback, but not everyone | :00:30. | :00:39. | |
is happy about it. Welcome to World Business Report. In just a moment, | :00:40. | :00:44. | |
more from the World Economic Forum in Abuja, Nigeria, but first the | :00:45. | :00:49. | |
sour, it looked like a marriage made in heaven, but it seems their | :00:50. | :00:54. | |
relationship went sour before they could tie the knot. I am talking | :00:55. | :00:59. | |
about these two chaps. A deal to create the world's biggest | :01:00. | :01:01. | |
advertising company, which has collapsed in the past few hours. | :01:02. | :01:06. | |
Omnicom, which is the biggest ad firm in the US, and French group | :01:07. | :01:13. | |
Publicis, agreed a $35 billion merger last July that would have | :01:14. | :01:15. | |
transformed the advertising industry. Here, you can see the two | :01:16. | :01:23. | |
bosses in a show of transatlantic company. It has emerged that they | :01:24. | :01:29. | |
have broken down, with emerging tensions between the two sides. | :01:30. | :01:36. | |
Michelle, what are the two companies saying about the split? We have | :01:37. | :01:43. | |
heard from Omnicom, saying that essentially this was a breakup | :01:44. | :01:46. | |
they've blamed on difficulties tried to get the deal done in a timely | :01:47. | :01:51. | |
fashion. It was a sentiment echoed also by Publicis. There were also | :01:52. | :01:56. | |
problems with costs that were mounting, problems on the legal | :01:57. | :02:01. | |
side, and issues relating to taxes. Some observers have also been | :02:02. | :02:05. | |
speculating that it was more than that. That there were problems | :02:06. | :02:10. | |
behind the scenes, amongst the personalities trying to merge the | :02:11. | :02:13. | |
two cultures. Weston is being raised about who would lead the agency | :02:14. | :02:19. | |
going forward `` questions were being raised. I heard that the | :02:20. | :02:30. | |
merger was never definite, but there was never a certainty. All along, he | :02:31. | :02:43. | |
has said that, he has been sceptical. The advertising industry | :02:44. | :02:50. | |
is full of larger`than`life personalities, perhaps that was part | :02:51. | :02:56. | |
of this. Also, if you look back at Martin Sorrell, who runs the | :02:57. | :03:00. | |
world's second biggest advertising agency, he has pointed out that if | :03:01. | :03:05. | |
you look at these two agencies, combine together they have many | :03:06. | :03:09. | |
competing clients. For example, one of the great rivalries in corporate | :03:10. | :03:13. | |
America is between Coca`Cola and Pepsi. They were each represented by | :03:14. | :03:19. | |
Publicis and also by Omnicom, so there were questions over how these | :03:20. | :03:22. | |
two accounts will be managed, and the same question again with other | :03:23. | :03:26. | |
clients. The client had yet to be persuaded of the necessary logic of | :03:27. | :03:32. | |
this deal, but of course the advertising industry has changed, | :03:33. | :03:35. | |
the landscape is shifting, you have more and more adverts being placed | :03:36. | :03:38. | |
on sites like Facebook, technology companies entering into the market, | :03:39. | :03:42. | |
so the question going forward will be, what will these two agencies | :03:43. | :03:47. | |
look like in the future? Exactly, I was just thinking as you are | :03:48. | :03:50. | |
speaking, I don't think this is the last we have heard of this. | :03:51. | :03:56. | |
More encouraging economic news from China this morning, with evidence | :03:57. | :04:00. | |
that inflation eased last month. Let's get the latest from Rico Hizon | :04:01. | :04:04. | |
in Singapore. Good to see you as ever. Inflation is easing? Yes, and | :04:05. | :04:16. | |
yet the market here in Asia with the news, prices are coming down a bit. | :04:17. | :04:21. | |
The data gives the government more leeway if needed to stimulate the | :04:22. | :04:25. | |
slowing economy, consumer prices are rising by 1.8% over a year earlier. | :04:26. | :04:33. | |
Down from March's 2.4% increase, and that was led by the politically | :04:34. | :04:40. | |
sensitive food prices. This gives Asia a bit more room for other | :04:41. | :04:45. | |
initiatives to stimulate the economy after growth declined to 7.4% in the | :04:46. | :04:54. | |
latest quarter. In a sign of concern over possible job losses in the | :04:55. | :04:57. | |
weaker economy, Beijing launched in March a mini stimulus initiative, | :04:58. | :05:01. | |
boosting spending on building railways and other public works. | :05:02. | :05:08. | |
Despite this good news, analyst say the economy may have bottomed out, | :05:09. | :05:18. | |
but the recovery will be slow. Over the last three days, we have been | :05:19. | :05:22. | |
reporting from the World Economic Forum, taking place in Abuja, | :05:23. | :05:27. | |
Nigeria. Government and business leaders there were attending the | :05:28. | :05:31. | |
event, known as Africa's Davos, to be a global showcase for Nigeria as | :05:32. | :05:38. | |
a fast`growing economy, full of opportunity. It has been | :05:39. | :05:42. | |
overshadowed by concerns over the stability and security of the | :05:43. | :05:46. | |
country. We put those concerns to the head of Nigeria's largest | :05:47. | :05:51. | |
private energy company. The risk that really affect investments is | :05:52. | :05:59. | |
not in Nigeria. Would you have in Nigeria is challenges, in terms of | :06:00. | :06:03. | |
building a business. The ultimate aim in business is to make a good | :06:04. | :06:10. | |
return, and Nigeria has come at it and returned in many places. There | :06:11. | :06:13. | |
may be challenges where we have to build some infrastructure, | :06:14. | :06:18. | |
challenges with getting licences, soft challenges in terms of getting | :06:19. | :06:22. | |
business started. Once you are up and running, it is a success. If you | :06:23. | :06:28. | |
look at it from the point of view of large corporations and the telecoms | :06:29. | :06:33. | |
industry, where we had in 2000 two problems with the licensing process. | :06:34. | :06:41. | |
Two companies got licences, and we became the largest market | :06:42. | :06:43. | |
eventually, but they had to content with many things. Let's have a look | :06:44. | :06:48. | |
at the euro, because since the US and debt crisis receded in the | :06:49. | :06:52. | |
region's economies began to recover, the single currency has | :06:53. | :06:55. | |
really bounced back. Too strongly in, in fact, for many in France, | :06:56. | :07:00. | |
where business leaders are complaining it is hitting their | :07:01. | :07:06. | |
profits at making their exports unviable. President Francois | :07:07. | :07:13. | |
Hollande is beginning talks with Angela Merkel today. Against the US | :07:14. | :07:19. | |
dollar on Thursday, the euro touched almost 1.40 cents, which is the | :07:20. | :07:26. | |
highest in around 2.5 years. The euro has also surged almost 14% | :07:27. | :07:29. | |
against the dollar since the summer of 2012. That has made things tough | :07:30. | :07:34. | |
for European firms competing with US rivals. On Thursday, the European | :07:35. | :07:42. | |
Central bank boss underlined his own concerns about the strength of the | :07:43. | :07:46. | |
euro. The strengthening of the exchange rate in the context of low | :07:47. | :07:53. | |
inflation is cause that is in view of the governing council. We are | :07:54. | :07:59. | |
speaking to a senior economist at Westpac bank. A cause for serious | :08:00. | :08:02. | |
concern. What do you make of those comments? Think he is making the | :08:03. | :08:07. | |
point that already very low inflation in the eurozone risks | :08:08. | :08:11. | |
becoming even lower, potentially even deflationary, if the euro were | :08:12. | :08:17. | |
to insist on deflating. Your central bank is one of the few that hasn't | :08:18. | :08:21. | |
gone down the quantitative easing path. The Bank of England has, the | :08:22. | :08:26. | |
Bank of Japan, the Fed in the US. That tends to weaken currencies, so | :08:27. | :08:32. | |
with this there is talk about some easing potentially coming through | :08:33. | :08:35. | |
from the ECB potentially next month, could there be some hint of | :08:36. | :08:40. | |
quantitive easing down the path for the ECB? We think there could be. | :08:41. | :08:45. | |
What do you think your reaction could be that? What if the ECB goes | :08:46. | :08:51. | |
down that path? You would think it would weaken the currency, and that | :08:52. | :08:57. | |
is the hope. He has done some pretty awesome things, reversing policy | :08:58. | :09:01. | |
errors in his first two meetings, the long`term refinancing operation, | :09:02. | :09:06. | |
sorting out the banking credit crunch in 2011. Portuguese | :09:07. | :09:13. | |
government bond yields have them down to 3.5%. He has done a lot, and | :09:14. | :09:19. | |
he does something along the lines of quantitive easing, which we thought | :09:20. | :09:26. | |
would not be possible, they can't fight government bonds. There is no | :09:27. | :09:32. | |
asset back market to speak of, but if he manages to come up with a QE | :09:33. | :09:38. | |
plan, he might be rewarded, that is the curse of the courageous. If he | :09:39. | :09:42. | |
gets that sort of a response it could be problematic. Lots for | :09:43. | :09:47. | |
Angela Merkel and Francois Hollande to talk about. | :09:48. | :09:58. | |
Apple is close to paying $3.2 billion for Beats electronics. They | :09:59. | :10:06. | |
are the maker of the trendy headphones, which also runs a | :10:07. | :10:09. | |
subscription music service, and was founded by Doctor dre in 2008. It | :10:10. | :10:17. | |
would be Apple's biggest ever takeover, if it goes through. | :10:18. | :10:23. | |
Analysts say they are puzzled by it. Asian shares slumped on Friday, | :10:24. | :10:30. | |
because of caution from investors about the situation in Ukraine. | :10:31. | :10:42. | |
I will be back in a moment relook at the papers. `` for a look. | :10:43. | :10:57. | |
The government is being urged to make big changes to the way | :10:58. | :11:03. | |
terrorism is tackled in Britain, in order to deal with groups like Al | :11:04. | :11:07. | |
Qaeda. The home affairs committee says the Metropolitan Police should | :11:08. | :11:15. | |
be stripped of its responsibility for counter`terrorism. Just 18 | :11:16. | :11:16. |