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Sir Richard Branson is in advanced talks about a multibillion dollar merger to take Virgin Orbit, his satellite launch company, on to the US public markets.

Sky News can reveal that Virgin Orbit is close to finalising a deal to combine with NextGen Acquisition II, a special purpose acquisition company (SPAC) set up by George Mattson, a former Goldman Sachs banker.

Sources said this weekend that NextGen II was in exclusive talks with Sir Richard’s Low Earth Orbit satellite business, which is 80%-owned by the tycoon’s Virgin Group empire.

Mubadala, the Abu Dhabi sovereign fund, owns the remaining 20% of Virgin Orbit’s shares.

A definitive deal valuing Virgin Orbit at approximately $3bn (£2.1bn) could be announced in the coming weeks, according to insiders.

Concluding a SPAC merger would represent a further vindication of Sir Richard’s efforts to construct a multibillion dollar business empire in the burgeoning space technology sector.

In 2019, he merged Virgin Galactic, his space tourism operation, with Social Capital Hedosophia, another SPAC, in a deal which heralded the ongoing deluge of so-called ‘blank cheque’ companies.

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SPACs raise funds from investors to secure an unidentified acquisition, with hundreds of the vehicles being created by prominent financiers, businesspeople and celebrity sponsors during the last two years.

Virgin Orbit has been seeking a SPAC deal for several months and has engaged in talks with multiple prospective partners, according to people close to the process.

The choice of NextGen is a logical one, since Mr Mattson is a director of Virgin Galactic, and is an experienced aviation industry insider, having also been a director of Delta Air Lines for nearly nine years.

He was previously a Goldman partner working with clients in the general industrials sector for a decade.

Virgin Orbit is part of a fast-growing sector focused on launching satellites for commercial and government clients.

The company received another burst of publicity this week when Boris Johnson was pictured in front of one of its LauncherOne rockets at Newquay’s Spaceport ahead of the G7 Summit.

In January, it launched ten small satellites into space from its Californian base, with the next launch scheduled for the end of this month.

Rocketlabs, a larger rival to Virgin Orbit, is the only other commercial small satellite operator to have achieved that milestone.

The maiden launch for Sir Richard’s company from the Cornish site could take place as soon as the end of next year.

It also plans to launch from California, Guam and Japan, and is considering further launch sites around the world.

Virgin Orbit was spun out of Virgin Galactic four years ago, and is now run by chief executive Dan Hart, a former Boeing executive.

It deploys a novel launch system using a converted Virgin Atlantic passenger plane which is now called Cosmic Girl.

Analysts at Morgan Stanley have forecast that the global space industry could be worth more than $1trn by 2040.

Rapid growth is expected after that as commercial satellite usage expands to satisfy demand from communications and other technology companies.

This week, Seraphim Capital confirmed a Sky News report that it is planning a £250m London flotation, having backed a number of space ‘unicorns’, including Arqit, a British quantum encryption company.

Arqit itself has just unveiled plans to go public via a SPAC, with Virgin Orbit among the investors in the deal, having also agreed an alliance as Arqit’s satellite launch partner.

Arqit said on Friday that it had struck a deal with six governments to launch a series of federated quantum satellites.

David Williams, the businessman who created Arqit, was also the founder of Seraphim and has established himself as one of the most influential executives in the UK space industry.

Among the remaining questions relating to Virgin Orbit’s SPAC merger will be the size and backers of its so-called PIPE – referring to the private investors in public equity which will help to fund the deal.

For Sir Richard, the crystallisation of a $2.5bn paper windfall by taking Virgin Orbit onto the New York stock markets will add another sizeable chunk to his wealth.

The businessman has sold hundreds of millions of pounds of Virgin Galactic stock over the last 15 months to invest in his consumer-facing companies, but retains a roughly-25% stake valued at over $2bn based on Friday’s closing share price.

Sir Richard’s $4.5bn space-related paper fortune has helped to weather the impact of the pandemic on his other consumer and travel businesses.

Virgin Active and Virgin Atlantic have narrowly staved off bankruptcy since the start of the coronavirus outbreak, with Sir Richard among creditors having injected substantial sums to keep them afloat.

At one point last year, he pleaded for the UK government to intervene to prop up Virgin Atlantic and warned that he might even seek to mortgage his private Caribbean island, Necker, in order to raise funds.

He is now involved in a race with Jeff Bezos to be the first ‘space billionaire’ to make it into orbit after the Amazon founder said that he and his brother would join the inaugural crewed flight of his New Shepard rocket-ship next month.

Virgin Orbit is being advised by Credit Suisse and Liontree Advisors, while Goldman is acting for NextGen on the merger talks.

A Virgin Orbit spokesman declined to comment on Saturday, while NextGen could not be reached for comment.

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UBS takeover of Credit Suisse: Embattled bank’s chairman describes ‘historic, sad and very challenging’ day

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UBS takeover of Credit Suisse: Embattled bank's chairman describes 'historic, sad and very challenging' day

UBS will take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence.

Credit Suisse, the 167-year-old embattled lender had been brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.

The credit line was agreed upon in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.

That takeover was announced on Sunday evening – UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.

The deal is expected to be closed by the end of this year.

Colm Kelleher, chairman of UBS Group, said the agreement “represents enormous opportunities”.

He also said that his bank’s long-term aim would be to downsize Credit Suisse’s investment banking business and align it with the “conservative risk culture” of UBS.

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Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging” for his bank and the global market.

‘The best available outcome’

Mr Lehmann said: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.

“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”

‘Exceptional situation’

In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.

It is also hoped that UBS’s takeover of its old rival will avoid the contagion of the kind seen in the financial crisis of 2008.

This is a significant deal but huge risks continue to lurk in the global financial system

This combination brings together not only Switzerland’s two biggest banks but two of the most significant financial institutions in the world.

There was reference during the press conference to discussions with Jeremy Hunt, the British chancellor.

That underlines the crucial nature of this deal as governments and financial regulators around the world race to contain the banking sector’s biggest crisis of the last 15 years.

This was always a deal that the Swiss government had resisted. It had been speculated so many times over the last decade, but the Swiss government had always wanted to maintain two national banking champions.

But let’s be clear – all the parties involved in this deal have effectively been strong-armed into it by the crisis of confidence which has erupted at Credit Suisse, and which has been fomenting for some time.

UBS has been effectively strong-armed into doing this deal by the Swiss government, and Credit Suisse has been forced to accept it – there won’t be a shareholder vote on the transaction.

The only alternative to this deal happening was going to be when financial markets opened on Monday in Asia and then in Europe, some form of nationalisation or resolution of Credit Suisse which would have deepened the sense of crisis in the industry.

This government-orchestrated rescue does avert the collapse of a major global bank but while it might be tempting to believe this draws a line under this banking crisis, remember that a week ago HSBC stepped in to buy the British arm of Silicon Valley Bank for £1 after its American parent collapsed, and a number of other mid-sized US banks have been forced to seek emergency support in the last 10 days.

All of this is a sobering reminder that as interest rates risk sharply to combat global inflationary pressures, huge risks continue to lurk in the global financial system.

Central banks insist systems are resilient

The news was welcomed by central banks in the US, Europe and in the UK.

All three insisted that banking systems within their jurisdiction are strong and resilient.

The Bank of England said: “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.

“The UK banking system is well capitalised and funded, and remains safe and sound.”

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Credit Suisse rescue: What now for the UK’s banks?

A deal likely to ripple through global markets

Credit Suisse is one of the world’s largest wealth managers and is also one of 30 banks ranked as systemically important, meaning the deal is likely to ripple through global markets on Monday.

It is also one of the largest investment banking employers in the City of London, employing around 5,000 people.

In a memo to employees on Sunday, Credit Suisse said there would be no immediate impact on clients or day-to-day working operations, adding that branches and global offices would remain open.

It comes after a difficult few weeks for the banking sector, with the collapse of US lenders Silicon Valley Bank and Signature Bank.

The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.

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UBS to take over Credit Suisse, Swiss central bank confirms

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UBS takeover of Credit Suisse: Embattled bank's chairman describes 'historic, sad and very challenging' day

UBS will take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence.

Credit Suisse, the 167-year-old embattled lender had been brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.

The credit line was agreed in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.

That takeover was announced on Sunday evening – UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.

The deal is expected to be closed by the end of this year.

Colm Kelleher, chairman of UBS Group, said the agreement “represents enormous opportunities”.

He also said that his bank’s long-term aim would be to downsize Credit Suisse’s investment banking business and align it with the “conservative risk culture” of UBS.

More from Business

Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging” for his bank and the global market.

‘The best available outcome’

Mr Lehmann said: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.

“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”

‘Exceptional situation’

In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.

It is also hoped that UBS’s takeover of its old rival will avoid the contagion of the kind seen in the financial crisis of 2008.

This is a significant deal but huge risks continue to lurk in the global financial system

This combination brings together not only Switzerland’s two biggest banks but two of the most significant financial institutions in the world.

There was reference during the press conference to discussions with Jeremy Hunt, the British chancellor.

That underlines the crucial nature of this deal as governments and financial regulators around the world race to contain the banking sector’s biggest crisis of the last 15 years.

This was always a deal that the Swiss government had resisted. It had been speculated so many times over the last decade, but the Swiss government had always wanted to maintain two national banking champions.

But let’s be clear – all the parties involved in this deal have effectively been strong-armed into it by the crisis of confidence which has erupted at Credit Suisse, and which has been fomenting for some time.

UBS has been effectively strong-armed into doing this deal by the Swiss government, and Credit Suisse has been forced to accept it – there won’t be a shareholder vote on the transaction.

The only alternative to this deal happening was going to be when financial markets opened on Monday in Asia and then in Europe, some form of nationalisation or resolution of Credit Suisse which would have deepened the sense of crisis in the industry.

This government-orchestrated rescue does avert the collapse of a major global bank but while it might be tempting to believe this draws a line under this banking crisis, remember that a week ago HSBC stepped in to buy the British arm of Silicon Valley Bank for £1 after its American parent collapsed, and a number of other mid-sized US banks have been forced to seek emergency support in the last 10 days.

All of this is a sobering reminder that as interest rates risk sharply to combat global inflationary pressures, huge risks continue to lurk in the global financial system.

Central banks insist systems are resilient

The news was welcomed by central banks in the US, Europe and in the UK.

All three insisted that banking systems within their jurisdiction are strong and resilient.

The Bank of England said: “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.

“The UK banking system is well capitalised and funded, and remains safe and sound.”

Please use Chrome browser for a more accessible video player

Credit Suisse rescue: What now for the UK’s banks?

A deal likely to ripple through global markets

Credit Suisse is one of the world’s largest wealth managers and is also one of 30 banks ranked as systemically important, meaning the deal is likely to ripple through global markets on Monday.

It is also one of the largest investment banking employers in the City of London, employing around 5,000 people.

In a memo to employees on Sunday, Credit Suisse said there would be no immediate impact on clients or day-to-day working operations, adding that branches and global offices would remain open.

It comes after a difficult few weeks for the banking sector, with the collapse of US lenders Silicon Valley Bank and Signature Bank.

The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.

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John Lewis may end 100% staff ownership to raise investment for ‘transformation’ as job losses loom

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John Lewis may end 100% staff ownership to raise investment for 'transformation' as job losses loom

The retail giant John Lewis may dilute its 100% employee ownership to raise fresh investment.

The change to the partnership model would signal a major departure for the company, which runs the department store chain and Waitrose supermarkets.

The firm warned of job cuts and told staff it will not hand out a bonus for only the second time since 1953 this week after posting an annual loss of £234m as costs soared and sales dipped.

Dame Sharon White, its chairwoman, is in the early stages of exploring a plan to change its mutual structure in an attempt to raise up to £2bn of new investment, according to The Sunday Times.

The group would consider selling only a minority stake and its priority would be to maintain majority employee ownership, the newspaper said.

Any move would have to be voted on by the retailer’s partnership council of about 60 staff.

In the face of tough trading conditions, the firm has been looking to diversify its operations, including a move into the “build to rent” property business.

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At the end of last year it signed a £500m deal with Abrdn, a global investment company, that will help it build 1,000 new homes.

The John Lewis Partnership said: “We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans.

“We’ve done this with Ocado in the past and now with Abrdn.

“Our partners, who own the business, will be the first to hear about any developments.”

Image:
The business includes 329 Waitrose shops

UK’s largest employee-owned business

The business was founded by John Lewis with a small shop on Oxford Street in 1864.

His son, John Spedan Lewis, created the partnership more than 70 years ago as an experiment into a better way of doing business by including staff in decision-making.

The John Lewis Partnership is the UK’s biggest employee-owned business with around 74,000 staff, known as partners.

The group has 34 John Lewis shops and 329 Waitrose shops, along with its retail websites.

In a letter sent to staff last week, Dame Sharon raised the spectre of job losses as part of efforts “to become more efficient and productive”.

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‘Inflationary pressures’

A loss of £78m was recorded for the financial year which ended in January but when exceptional costs were added this reached £234m.

These included the write-down in value of Waitrose stores.

It represented a slump from a £181m profit in the previous year, with John Lewis blaming “inflationary pressures”.

The update came a day after the group appointed turnaround specialist Nish Kankiwala as its first chief executive, in a shake-up of the leadership structure.

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