In a one-line statement issued yesterday, Trinity said it was withdrawing from merger discussions with Mirror "with immediate effect". Senior Trinity executives are understood to have pulled out after concluding that Mirror's board is not fully committed to a deal. Mr Montgomery and John Allwood, the Mirror director in charge of its regional newspaper interests, met Trinity executives last week to discuss the possibility of a merger. MERGER TALKS between Mirror Group and Trinity, the regional newspaper publisher, have collapsed for the second time in a year amid accusations that David Montgomery, Mirror Group's chief executive, is blocking a deal in an attempt to save his job. The purchase price included an element of compensation for previous investments ploughed into Rolls- Royce by Vickers.The sale helped Vickers to buy Ulstein, a Norwegian marine equipment company, for pounds 300m. Vickers already has a presence in marine technology through its subsidiary, KaMeWa. The company still has pounds 200m in cash to spend on further acquisitions.. It is also a success for Paul Buysse, the chief executive, who has been seeking to re-focus the group since his arrival last year.In July, Mr Buysse, formerly of BTR, secured the pounds 479m sale of Rolls- Royce Motor Cars to Volkswagen of Germany.
While around 20 manufacturers make the vehicles, only a handful of governments are likely to place substantial orders.The joint venture with Giat will link Vickers with France's leading manufacturer of LeClerc tanks, competing for export orders from South Africa and Greece.A deal will bring Vickers one stage closer to its aim of ditching its non-core activities and focusing on marine technology. Vickers also considered a link-up with Rheinmetall, a German rival, and the US-based Carlyle group.European governments have been pressing for consolidation in the armoured vehicles industry because of declining orders and a serious problem of over capacity. Vickers will sign a memorandum of understanding with the state-owned group to the effect that it will co-operate on a range of activities and form a new company, owned 50-50 between Vickers and Giat. The company will concentrate on developing armoured vehicles in competition with the "battlefield taxi", a multi-purpose armoured car being commissioned by the German and British governments.Vickers recently lost the race to win an order for the battlefield taxi to Alvis, the rival armaments firm which is part-owned by GKN, Vickers' main rival.The deal with Giat is the outcome of a year-long search by Sir Colin Chandler, chief executive of Vickers, for a partner in the armoured vehicles industry. Even so, this could be enough to safeguard the economy from outright recession.Greater than usual spending on construction, funded by Lottery grants for capital projects, and parties will be one of the biggest effects So will the IT spending on top of normal budgets.. VICKERS WILL this week announce a joint venture with Giat, the French armaments firm, to form a new company making armoured vehicles with combined sales of around pounds 500m.
THE BRITISH economy will get a pounds 1.7bn boost from extra pre-millennial spending, according to a report published today. But the 1999 boost will be followed by a year 2000 bust, according to another influential economist. Spending on millennium construction projects, fixing the year 2000 computer bug, New Year celebrations and stockpiling in case of emergencies by households and businesses ahead of 1 January 2000 will all help to stimulate growth this year, the new report from the Centre for Economics and Business Research (CEBR) calculates. These will more than offset the negative impact on growth of a possible dip in confidence and a credit crunch if banks hold back on making new loans because of the year 2000 problem.But separately, a leading US economist is warning of the high risk of a serious global recession in the year 2000, largely because of glitches caused by the fact that many computers and embedded microchips could go wrong on 1 January.Edward Yardeni of Deutsche Bank in New York is predicting a 70 per cent chance of a global recession next year as a result - probably a "serious" recession. "The global financial crisis of 1997-98 may turn out to be a warm-up act for the year 2000 main event," he said.The US economy too is being boosted in advance by extra spending on information technology to try to sort out the problem.Mr Yardeni calculates that companies in the S&P 500 index have allocated $10.1bn to year 2000 spending. Among the biggest budgets are those of telecoms companies such as AT&T (at $711m), giant corporations including GM ($586m) and investment banks such as Merrill Lynch ($200m).For the UK, the CEBR report estimates the net effect of the millennium at a relatively modest 0.2 per cent boost to GDP growth in 1999, or an additional pounds 1.7bn in spending.
The company said it was concentrating on safer exploration projects and aiming to cut its costs by pounds 30m.News of the talks underlines the mounting pressure for consolidation in the sector owing to the slumping oil price.. In its 1999 projections, the company is banking on an average price of $13 a barrel.The company said its balance sheet was in good shape. It had a current cash balance of pounds 550m, pounds 150m in undrawn facilities, and gearing was 54 per cent.In November, Lasmo said it was cutting 60 per cent of the staff at its London head office - 300 jobs. At $11.73 a barrel, nearly $7 cheaper than in 1997, the oil price is lower than it has been for 10 years.The oil price slump has called into question the value of oil exploration projects planned by the two companies.
