This week’s news stories include: Nike and Puma’s ongoing trademark battle, Oatly launches IPO, Eurostar secures rescue package, Virgin Media and O2 merger is approved, and more.
Legally Possible’s top news story of the week: Oatly Launches IPO
1. VIRGIN MEDIA O2 MERGER
Following a provisional clearance last month, the Competitions and Markets Authority (CMA) has approved the $44 billion (£30 billion) merger of Liberty Global’s Virgin Media and Virgin Mobile with Telefonica’s O2.
Initially, the CMA was concerned that, should the merger go ahead, Virgin and O2 could raise their prices or reduce the quality of these wholesale services, which could consequently lead to other companies being forced to offer lower quality mobile services or increase their retail prices, which would inevitably impact customers negatively. However, the CMA have since decided there would not be substantial lessening of competition in the sector as the two are not ‘close enough’ in competition.
Together, O2 and Virgin Mobile will likely enjoy a 30% share of the market with a huge 46 million customers, exceeding BT & EE.
In a joint statement, Mike Fries, CEO of Liberty Global, and José Maria Alvarez-Pallete, CEO of Telefonica, said: “This is a watershed moment in the history of telecommunications in the UK as we are now cleared to bring real choice where it hasn’t existed before, while investing in fibre and 5G that the UK needs to thrive. We thank the CMA for conducting a thorough and efficient review. Lutz and Patricia are now set to take the reins and launch a national connectivity champion that will connect more people, ignite more businesses back to growth and power more communities for the greater good.”
⭐ 2. OATLY LAUNCHES IPO ⭐
My top news story of the week!
Oatly, the plant based milk company, launched its Initial Public Offering (IPO) on NASDAQ, an American Stock Exchange, last week. The company set its debut share price at $17 each, but that shot to $22 in opening trading, valuing Oatly at more than $13bn (£9.2bn).
Oatly was founded in 1990 and has grown rapidly in recent years. Its oat milk is now sold in 60,000 shops and more than 32,000 coffee shops across 20 countries. Oatly is expected to open its first UK factory in 2023, creating at least 200 jobs.
Due to an increase in dairy allergies and concerns surrounding the environmental impact dairy has, researchers have predicted that the market for dairy alternatives could almost double over the next five years.
At the height of the pandemic last year, the company completed a $200m funding round led by Blackstone, the private equity titan, which brought on board a number of celebrity investors including rapper Jay Z’s company Roc Nation, adding to its already long-list of celebrity investors including Oprah Winfrey and Natalie Portman. Blackstone, Oatly’s second-largest investor, controls a 6.7% stake in the brand, worth $675 million.
However, although Oatly’s sales are increasing, its losses are also widening due to spending on marketing campaigns, researching new products and opening their new factories,
THOUGHTS AND IMPLICATIONS
This listing highlights the increase in demand for plant based products. However, with this increase in demand comes with an increase in competition. Nestle recently launched a pea-based milk under its Wunda brand, and Unilever’s Ben & Jerry’s now offers dairy-free versions of its ice cream range. Up-coming brands must continue to find ways of staying unique and innovative if they are going to compete with other well-established companies.
Photo: AP Images
3. NIKE VS PUMA
The trademark dispute between Nike and Puma continues, following Nike’s intention to trademark the term ‘footware’ in both the UK and the US. Nike wishes to use the term in connection with tech-driven products. The courts heard Puma’s appeal last week, which progressed to the High Court.
Initially, Puma had lodged opposition to Nike trademarking ‘footware’, claiming that it is not distinctive enough as the combination of ‘footwear’ and ‘soft/hardware’ is not unique to Nike, and that ‘footware’ is an “ordinary descriptive term for the goods and services”. However, Nike argued that this is in fact unique to its products, and the UK Intellectual Property Office (UKIPO) accepted this argument on the basis that “footware” is not necessarily a combination of two non-distinctive elements, thereby, automatically resulting in a non-distinctive term.
In addition, the UKIPO’s hearing officer stated that “footware” does not have an “immediately apparent” or obvious meaning, and that the “evidence at play does not establish that the mark is used descriptively in relation to the goods and services” cited in Nike’s application.
Image: Getty Images
4. EUROSTAR SECURES RESCUE PACKAGE
Following the severe drop in demand for its services due to the on-going pandemic, Eurostar has secured a £250 million rescue package from banks and investors. This follows the rail operator warning it was ‘fighting for survival against a 95% drop in demand’ last November.
This funding consists of £50m equity from shareholders, £150m in new loans from banks that are guaranteed by shareholders, and £50m from restructured existing bank loans.
Eurostar hopes to gradually run more trains as restrictions ease across the coming months. It is currently only running one train per day between London St Pancras and Paris Gare du Nord, and one a day between Amsterdam and Brussels. But, from 27th May, Eurostar will start running two daily return services on the London to Paris route, and three per day from the end of June.
Photo: Getty Images
5. NEW GBR RAIL PLAN
A new ‘Williams-Shapps plan for rail‘ has been revealed that aims to provide a more efficient, accountable system that modernises the network, with the creation of a new Great British Railways (GBR).
GBR will manage and oversee the network and replace Network Rail and its responsibilities, including selling tickets, setting timetables and issuing contracts to train operators. However, this will not be a nationalisation of the railways, and individual, privately run train operators will remain.
A new refund system for delayed and cancelled trains has also been announced, as well as flexible season tickets that will be available to purchase from 21st June. This will allow passengers to travel on any 8 days in a 28 day period. They are believed to be best suited to those travelling 2-3 days per week, as passengers travelling 1 day a week will likely be better off buying daily tickets.
THOUGHTS AND IMPLICATIONS
This new plan comes as a blow to companies such as Trainline who have already had a challenging year due to travel restrictions. Between February 2020 and 2021, the firm only achieved £67m in sales, down 75% from the year before. Since the announcement of the new rail plan, Trainline’s shares dropped 23%.
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