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Commercial Awareness Update - February 2019!
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<blockquote data-quote="kitk" data-source="post: 9605" data-attributes="member: 157"><p>Hello readers <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile :)" loading="lazy" data-shortname=":)" /></p><p></p><p>Welcome to this week’s commercial news write up (20th February 2019).</p><p></p><p>Topics discussed this week cover:</p><ol> <li data-xf-list-type="ol">Agreement over Draft EU Copyright Directive</li> <li data-xf-list-type="ol">Biggest bank deal since the financial crisis: the BB&T and SunTrust merger</li> <li data-xf-list-type="ol">Amazon’s ill-fated NY HQ2</li> <li data-xf-list-type="ol">UK Economic Slowdown</li> </ol><p></p><p><strong><u>1. Agreement over Draft EU Copyright Directive (By: Kit)</u></strong></p><p><strong></strong></p><p><strong>The story: </strong></p><p><strong></strong></p><p>Last week, negotiators from the European Parliament, Council of Ministers and European Commission reached an agreement over a final draft of the EU Copyright Directive.</p><p></p><p>Under this Directive, online platforms like YouTube must negotiate licenses for copyright protected works like songs or video clips before publishing user-uploaded content that incorporates them. Where no licenses are concluded, they are required to make “best efforts” to obtain authorisation to use such content. If platforms are notified of user-uploaded content that infringes copyright, they must act “expeditiously” to remove or block such content.</p><p></p><p>Also, under this Directive, if platforms do not negotiate licences with publishers and journalists or publishers do not waive their rights, platforms will not be able to reproduce longer fragments of articles under headlines. “Individual words or very short extracts of a press publication” are not covered by this “link tax”. “Private or non-commercial uses of press publications carried out by individual users” are also exempted from this.</p><p></p><p>This Directive still needs to be formally adopted by the European Parliament and the Council of Ministers, which is likely to occur in March or April.</p><p></p><p><strong>Impact on businesses and law firms: </strong></p><p><strong></strong></p><p>This Directive is likely to increase the remuneration available to publishers, broadcasters and artists, as well as their ability to enforce their copyright. However, there is some uncertainty as to the bodies to which this Directive applies. For example, although organisations that have been exempted from the rules under this Directive include non-profit online encyclopaedias and online marketplaces, the term “non-profit” is not defined. Also, concepts such as the extracts that are exempted from this Directive are open to interpretation.</p><p></p><p>Under this Directive, “new small platforms”, which have been operating for less than three years in the EU, have a turnover of less than €10 million, and fewer than five million monthly users will only have to prove that they have made their “best efforts” to obtain an authorisation and that they have acted expeditiously to remove the copyright-infringing content. However, this Directive has been criticised for effectively imposing an unduly burdensome and expensive obligation on online platforms to install upload filters for a wide range of content. This can, in turn, impede the growth and innovation of start-up online companies.</p><p></p><p>IP and TMT practices are expected to handle more work in drafting and negotiating the relevant licensing agreements, as well as advising content producers of their rights and content platforms on their policies to ensure compliance with the Directive.</p><p></p><p><strong><u>2. Biggest bank deal since the financial crisis: the BB&T and SunTrust merger (By: Angel)</u></strong></p><p><strong></strong></p><p><strong>The Story</strong></p><p> </p><p>BB&T and SunTrust are two of the largest lenders in the south-eastern US. Earlier this month, they announced a merger that would create a financial institution valued at USD 66 billion- the largest bank deal since the 2008 financial crisis. The agreement is for BB&T to buy rival SunTrust Banks for $28 billion in an all-stock deal. The bidder’s shareholders will take approximately 57% of the combined company.</p><p></p><p>By capital, the combined entity would only be behind the six dominant players in the US banking industry (JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley). Internationally, it will have a higher value that UK Barclays and German Deutsche Bank combined.</p><p></p><p>With regulatory huddles ahead of the deal, the banks plan to complete the deal in the fourth quarter of 2019. US Law firms involved in the deal includes Watchell, Lipton, Rosen & Katz for BB&T and Sullivan & Cromwell for SunTrust.</p><p> </p><p><strong>Impact on businesses and law firms</strong></p><p>The initial market reaction to the merger was surprisingly positive. Both banks observed a rise in market shares after the news. If successful, this acquisition would be a turning-point in a hesitant US banking industry that have been passive from mega deal-making since the M&A frenzies during the financial crisis that have led to the fall of mega-players like Bear Stearns.</p><p></p><p>The deal also shows a more permissive regulatory environment in the US. In fact, it may even be a direct consequence of Mr Trump’s deregulatory agenda, which included a lowering of US corporate taxes. Analysts opine that this will pressure other regional banks to consider taking on deals of their own. While this has the potential to increase M&A activities in the banking sector, others are concerned over the impact of such a merger on the public.</p><p></p><p>Upon a successful merger, the banks will be able to pool their resources which, if put to the right use, can improve the services of the combined entity as a whole. The potential and room for innovation would improve the bank’s competitive advantage. The merger will likely lead to a cut-down of unnecessary costs as well. This may include a closure of unneeded branches especially when consumers are increasingly turning to the use of mobile-banking.</p><p></p><p>Do agree that this deal is a ‘true merger of equals’, as claimed by the banks? What other consequences of the merger can you think of?</p></blockquote><p></p>
[QUOTE="kitk, post: 9605, member: 157"] Hello readers :) Welcome to this week’s commercial news write up (20th February 2019). Topics discussed this week cover: [LIST=1] [*]Agreement over Draft EU Copyright Directive [*]Biggest bank deal since the financial crisis: the BB&T and SunTrust merger [*]Amazon’s ill-fated NY HQ2 [*]UK Economic Slowdown [/LIST] [B][U]1. Agreement over Draft EU Copyright Directive (By: Kit)[/U] The story: [/B] Last week, negotiators from the European Parliament, Council of Ministers and European Commission reached an agreement over a final draft of the EU Copyright Directive. Under this Directive, online platforms like YouTube must negotiate licenses for copyright protected works like songs or video clips before publishing user-uploaded content that incorporates them. Where no licenses are concluded, they are required to make “best efforts” to obtain authorisation to use such content. If platforms are notified of user-uploaded content that infringes copyright, they must act “expeditiously” to remove or block such content. Also, under this Directive, if platforms do not negotiate licences with publishers and journalists or publishers do not waive their rights, platforms will not be able to reproduce longer fragments of articles under headlines. “Individual words or very short extracts of a press publication” are not covered by this “link tax”. “Private or non-commercial uses of press publications carried out by individual users” are also exempted from this. This Directive still needs to be formally adopted by the European Parliament and the Council of Ministers, which is likely to occur in March or April. [B]Impact on businesses and law firms: [/B] This Directive is likely to increase the remuneration available to publishers, broadcasters and artists, as well as their ability to enforce their copyright. However, there is some uncertainty as to the bodies to which this Directive applies. For example, although organisations that have been exempted from the rules under this Directive include non-profit online encyclopaedias and online marketplaces, the term “non-profit” is not defined. Also, concepts such as the extracts that are exempted from this Directive are open to interpretation. Under this Directive, “new small platforms”, which have been operating for less than three years in the EU, have a turnover of less than €10 million, and fewer than five million monthly users will only have to prove that they have made their “best efforts” to obtain an authorisation and that they have acted expeditiously to remove the copyright-infringing content. However, this Directive has been criticised for effectively imposing an unduly burdensome and expensive obligation on online platforms to install upload filters for a wide range of content. This can, in turn, impede the growth and innovation of start-up online companies. IP and TMT practices are expected to handle more work in drafting and negotiating the relevant licensing agreements, as well as advising content producers of their rights and content platforms on their policies to ensure compliance with the Directive. [B][U]2. Biggest bank deal since the financial crisis: the BB&T and SunTrust merger (By: Angel)[/U] The Story[/B] BB&T and SunTrust are two of the largest lenders in the south-eastern US. Earlier this month, they announced a merger that would create a financial institution valued at USD 66 billion- the largest bank deal since the 2008 financial crisis. The agreement is for BB&T to buy rival SunTrust Banks for $28 billion in an all-stock deal. The bidder’s shareholders will take approximately 57% of the combined company. By capital, the combined entity would only be behind the six dominant players in the US banking industry (JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley). Internationally, it will have a higher value that UK Barclays and German Deutsche Bank combined. With regulatory huddles ahead of the deal, the banks plan to complete the deal in the fourth quarter of 2019. US Law firms involved in the deal includes Watchell, Lipton, Rosen & Katz for BB&T and Sullivan & Cromwell for SunTrust. [B]Impact on businesses and law firms[/B] The initial market reaction to the merger was surprisingly positive. Both banks observed a rise in market shares after the news. If successful, this acquisition would be a turning-point in a hesitant US banking industry that have been passive from mega deal-making since the M&A frenzies during the financial crisis that have led to the fall of mega-players like Bear Stearns. The deal also shows a more permissive regulatory environment in the US. In fact, it may even be a direct consequence of Mr Trump’s deregulatory agenda, which included a lowering of US corporate taxes. Analysts opine that this will pressure other regional banks to consider taking on deals of their own. While this has the potential to increase M&A activities in the banking sector, others are concerned over the impact of such a merger on the public. Upon a successful merger, the banks will be able to pool their resources which, if put to the right use, can improve the services of the combined entity as a whole. The potential and room for innovation would improve the bank’s competitive advantage. The merger will likely lead to a cut-down of unnecessary costs as well. This may include a closure of unneeded branches especially when consumers are increasingly turning to the use of mobile-banking. Do agree that this deal is a ‘true merger of equals’, as claimed by the banks? What other consequences of the merger can you think of? [/QUOTE]
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