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Three is a trend, so the saying goes.

So news of two more big company demergers today, hot on the heels of the three-way break-up of 129-year-old US industrial giant General Electric announced on Wednesday, suggests that “doing the splits” is being looked at anew by company boards.

Toshiba, one of the best known companies in Japan, announced that it is breaking itself up – also splitting itself into three separate businesses.

A man looks at TVs of Toshiba Corp at an electronics store in Tokyo July 21, 2015
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One division will be focused on Toshiba’s electronics devices

The 146-year old company said one of the them would be focused on infrastructure, including products and services such as water treatment, trains, power turbines and nuclear-plant maintenance.

A second will be focused on electronic devices such as power semiconductors.

The third business, which will retain the Toshiba name, will manage the company’s stake in the flash-memory company Kioxia Holdings and other assets.

The move follows an accounting scandal six years ago – after which activist shareholders urged the company to break itself up.

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The measure, however, may not go far enough with those investors that had wanted Toshiba to go private.

It received – and rejected – a takeover proposal in April from CVC, the private equity group, valuing it at $20bn.

FILE PHOTO: The General Electric logo is pictured on working helmets during a visit at the General Electric offshore wind turbine plant in Montoir-de-Bretagne, near Saint-Nazaire, western France, November 21, 2016. REUTERS/Stephane Mahe/File Photo
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General Electric announced a break-up earlier this week

Toshiba’s move attracted a good deal of interest since it has echoes of the GE announcement which, in turn, was at least partly inspired by similar moves two years ago by the German industrial stalwart Siemens.

Hot on the heels of that news came the announcement that Johnson & Johnson, the $429bn healthcare and consumer goods giant that is America’s 12th largest public company, is to split itself in two.

J&J, the world’s biggest healthcare company by both sales and market value, will hive off its consumer health business, the owner of brands such as Band-Aid, Listerine, Tylenol, Neutrogena and the eponymous Johnson’s baby oil, into a separate company.

The core J&J business will retain the company’s existing pharmaceuticals and medical devices businesses.

The consumer health business will be the smaller of the two but will still be a substantial company, with annual sales of $15bn a year, in its own right.

Like Toshiba, J&J has had a difficult few years, becoming embroiled in a costly legal battle with the US state of Oklahoma over its past sale of painkillers.

More recently it has been dogged by allegations – furiously denied – that its talcum powder caused cancer.

But Alex Gorsky, J&J’s chief executive, insisted that the demerger – due to take place during the next 18 to 24 months – was nothing to do with that.

This April 15, 2011, file photo, shows a bottle of Johnson's baby powder Pic: AP
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Johnson & Johnson denies allegations about its talcum powder Pic: AP

He told the Wall Street Journal, which broke the story: “The best path forward to ensure sustainable growth over the long term and better meet patient and consumer demands is to have our consumer business operate as a separate healthcare company.”

As with Toshiba and GE, J&J is a stalwart of its country’s business scene.

It dates back some 135 years to when three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, launched a business selling surgical dressings, supposedly after hearing a speech by the British surgeon and pathology and antisceptic pioneer Joseph Lister.

J&J sold the world’s first commercial first aid kits and the world’s first women’s sanitary products.

It moved into pharmaceuticals in 1959 and the more predictable cash flow from its consumer goods businesses helped finance research and development into the more up-and-down, but potentially more lucrative, drugs and medical devices businesses.

More recently, though, some investors have become unhappy at the relatively sluggish performance of the consumer goods arm.

Its sales rose by 1.1% last year while the pharmaceuticals arm grew by 8%.

Shareholders these days prefer to focus on specific sectors.

Alex Gorsky, Chairman and CEO of Johnson & Johnson, celebrates the 75th anniversary of his company's listing on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 17, 2019.
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J&J boss Alex Gorsky said the demerger was the “best path forward to ensure sustainable growth”

An investor in J&J seeking exposure to its pharmaceuticals business will not, necessarily, want exposure to its consumer goods arm.

Activist investors such as Elliott, ThirdPoint, ValueAct and Starboard are now mighty beasts in the investment world, unafraid to take on some of the world’s largest companies.

No chairman or chief executive wants to see them popping up on their shareholder register.

Taking pre-emptive action, for example a demerger, is one way of avoiding costly, draw-out and debilitating battles with such investors.

J&J’s move is also in keeping with those of other big pharmaceuticals companies.

The German drugs giant Merck sold its consumer healthcare business, which owned brands including the hay fever remedy Claritin and the sun tan lotion maker Coppertone, to Bayer seven years ago.

Pfizer announced at the end of 2018 that it was merging its consumer healthcare business, the maker of Chapstick lip balm, Centrum multi-vitamins and Advil painkillers, with the consumer healthcare arm of Britain’s GlaxoSmithKline.

GSK emerged in effective control of the business and, in February last year, said it would demerge it.

The GlaxoSmithKline building in Hounslow, west London
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J&J is going down a path previously trodden by GSK

That move effectively is the road that J&J now plans to go down.

But, as with GSK, it is not without risk.

Without the predictable cash flows of consumer healthcare products, the research and development arms of the stand-alone pharmaceuticals businesses will have to be more disciplined, channelling their resources only into work where a positive outcome can be guaranteed.

It was why Sir Andrew Witty, GSK’s former chief executive, always refused to break up the company.

His successor, Dame Emma Walmsley, decided something more radical was required.

Mr Gorsky, at J&J, has clearly reached the same conclusion.

One thing is clear: with three gigantic and storied companies – GE, Toshiba and J&J – all announcing break-ups within days of each other, demergers are very much back on the business agenda.

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Chancellor Rachel Reeves considering ‘changes’ to ISAs – and says there’s too much focus on ‘risk’ in investing

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Chancellor Rachel Reeves considering 'changes' to ISAs - and says there's too much focus on 'risk' in investing

The chancellor has confirmed she is considering “changes” to ISAs – and said there has been too much focus on “risk” in members of the public investing.

In her second annual Mansion House speech to the financial sector, Rachel Reeves said she recognised “differing views” over the popular tax-free savings accounts, in which savers can currently put up to £20,000 a year.

She was reportedly considering reducing the threshold to as low as £4,000 a year, in a bid to encourage people to put money into stocks and shares instead and boost the economy.

However the chancellor has shelved any immediate planned changes after fierce backlash from building societies and consumer groups.

In her speech to key industry figures on Tuesday evening, Ms Reeves said: “I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach, we are united in wanting better outcomes for both savers and for the UK economy.”

She added: “For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.”

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Rachel Reeves’s fiscal dilemma

Ms Reeves’s speech, the first major one since the welfare bill climbdown two weeks ago, appeared to encourage regulators to focus less on risks and more on the benefits of investing in things like the stock market and government bonds (loans issued by states to raise funds with an interest rate paid in return).

She welcomed action by the financial regulator to review risk warning rules and the campaign to promote retail investment, which the Financial Conduct Authority (FCA) is launching next year.

“Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves”, Ms Reeves told the event in London.

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Is there £15bn of wiggle room in Reeves’s fiscal rules?

Last year, Ms Reeves said post-financial crash regulation had “gone too far” and set a course for cutting red tape.

On Tuesday, she said she would announce a package of City changes, including a new competitive framework for a part of the insurance industry and a regulatory regime for asset management.

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Reeves is ‘totally’ up for the job

In response to Ms Reeves’s address, shadow chancellor Sir Mel Stride said: “Rachel Reeves should have used her speech this evening to rule out massive tax rises on businesses and working people. The fact that she didn’t should send a shiver down the spine of taxpayers across the country.”

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The governor of the Bank of England, Andrew Bailey, also spoke at the Mansion House event and said Donald Trump’s taxes on US imports would slow the economy and trade imbalances should be addressed.

“Increasing tariffs creates the risk of fragmenting the world economy, and thereby reducing activity”, he said.

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New electric car grants of up to £3,750 aims to drive sales

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New electric car grants of up to £3,750 aims to drive sales

The taxpayer is to help drive the switch to non-polluting vehicles through a new grant of up to £3,750, but some of the cheapest electric cars are to be excluded.

The Department for Transport (DfT) said a £650m fund was being made available for the Electric Car Grant, which is due to get into gear from Wednesday.

Users of the scheme – the first of its kind since the last Conservative government scrapped grants for new electric vehicles three years ago – will be able to secure discounts based on the “sustainability” of the car.

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It will apply only to vehicles with a list price of £37,000 or below – with only the greenest models eligible for the highest grant.

Buyers of so-called ‘Band two’ vehicles can receive up to £1,500.

The qualification criteria includes a recognition of a vehicle’s carbon footprint from manufacture to showroom so UK-produced EVs, costing less than £37,000, would be expected to qualify for the top grant.

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It is understood that Chinese-produced EVs – often the cheapest in the market – would not.

BYD electric vehicles before being loaded onto a ship in Lianyungang, China. Pic: Reuters
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BYD electric vehicles before being loaded onto a ship in Lianyungang, China. Pic: Reuters

DfT said 33 new electric car models were currently available for less than £30,000.

The government has been encouraged to act as sales of new electric vehicles are struggling to keep pace with what is needed to meet emissions targets.

Challenges include the high prices for electric cars when compared to conventionally powered models.

At the same time, consumer and business budgets have been squeezed since the 2022 cost of living crisis – and households and businesses are continuing to feel the pinch to this day.

Another key concern is the state of the public charging network.

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The Chinese electric car rivalling Tesla

Transport Secretary Heidi Alexander said: “This EV grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century.

“And with over 82,000 public charge points now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”

The Government has pledged to ban the sale of new fully petrol or diesel cars and vans from 2030 but has allowed non-plug in hybrid sales to continue until 2025.

It is hoped the grants will enable the industry to meet and even exceed the current zero emission vehicle mandate.

Under the rules, at least 28% of new cars sold by each manufacturer in the UK this year must be zero emission.

The figure stood at 21.6% during the first half of the year.

The car industry has long complained that it has had to foot a multi-billion pound bill to woo buyers for electric cars through “unsustainable” discounting.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the grants sent a “clear signal to consumers that now is the time to switch”.

He went on: “Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.”

But the Conservatives questioned whether taxpayers should be footing the bill.

Shadow transport secretary Gareth Bacon said: “Last week, the Office for Budget Responsibility made clear the transition to EVs comes at a cost, and this scheme only adds to it.

“Make no mistake: more tax rises are coming in the autumn.”

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City financier Kolade joins ranks of Channel 4 chair contenders

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City financier Kolade joins ranks of Channel 4 chair contenders

A leading financier and Conservative Party donor is among the contenders vying to chair Channel 4, the state-owned broadcaster.

Sky News has learnt from Whitehall sources that Wol Kolade has been shortlisted to replace Sir Ian Cheshire at the helm of the company.

Mr Kolade, who has donated hundreds of thousands of pounds to Tory coffers, is said by Whitehall insiders to be one of a handful of remaining candidates for the role.

A recommendation from Ofcom, the media regulator, to Culture Secretary Lisa Nandy about its recommendation for the Channel 4 chairmanship is understood to be imminent.

Mr Kolade, who heads the private equity firm Livingbridge, has held non-executive roles including a seat on the board of NHS Improvement.

He declined to comment when contacted by Sky News on Monday.

His candidacy pits him against rivals including Justin King, the former J Sainsbury chief executive, who last week stepped down as chairman of Ovo Energy.

Debbie Wosskow, an existing Channel 4 non-executive director who has applied for the chair role, is also said by government sources to have made it to the shortlist.

Sir Ian stepped down earlier this year after just one term, having presided over a successful attempt to thwart privatisation by the last Tory government.

The Channel 4 chairmanship is currently held on an interim basis by Dawn Airey, the media industry executive who has occupied top jobs at companies including ITV, Channel 5, and Yahoo!.

The race to lead the state-owned broadcaster’s board has acquired additional importance since the resignation of Alex Mahon, its long-serving chief executive.

It has since been reported that Alex Burford, another Channel 4 non-executive director and the boss of Warner Records UK, was interested in replacing Ms Mahon.

Ms Mahon, who was a vocal opponent of Channel 4’s privatisation, is leaving to join Superstruct, a private equity-owned live entertainment company.

The appointment of a new chair is expected to take place by the autumn, with the chosen candidate expected to lead the recruitment of Ms Mahon’s successor.

The Department for Culture, Media and Sport declined to comment on the recruitment process.

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