News (#7-8 July-August 2021)

Biznews

Banking & Finance

Ukraine to get EUR 340 million loan from EIB to renovate infrastructure in eastern regions

On 14 July the Verkhovna Rada of Ukraine ratified a financial agreement on the provision of a loan of EUR 340 million to renovate damaged infrastructure facilities in eastern Ukraine.

The financial agreement between Ukraine and the European Investment Bank provides for a loan of EUR 340 million. Another aim of the programme is modernization of social infrastructure in those regions hosting the largest number of internally displaced persons.

In particular, this will be done through renovation and improvement of the social infrastructure (construction, reconstruction, major repairs), namely schools, medical institutions, and social centers. The energy efficiency of dwellings for internally displaced persons will also be increased.

The Ukraine Recovery Programme is a continuation of the Emergency Loan Programme in effect since 2014, which funds implementation of more than 150 projects on the renovation of social infrastructure in Donetsk, Luhansk, Zaporizhzhia, Kharkiv, Poltava, Odesa, Kherson, and Kyiv Regions.

Aviation

New low-cost airline flying to Germany to enter Ukrainian aviation market

Eurowings, the German low-cost carrier, which is part of the Lufthansa Group, has opened sales for the first flight to Ukraine and will fly to and from Düsseldorf.

The flights will start from 1 September through Boryspil Airport three times a week on Mondays, Wednesdays, and Fridays.

A basic ticket costs from USD 49.99 with the possibility of carrying one piece of hand luggage.

M&A

Hitachi acquired GlobalLogic for USD 10 billion

The Japanese conglomerate Hitachi has announced completion of the acquisition of software engineering services company GlobalLogic in accordance with the final agreement signed on
31 March 2021.

As per the agreement, Hitachi will become the indirect owner of 100% of shares issued in Worldwide Holdings, which is GlobalLogics parent company.

The combination of the capabilities of GlobalLogic with the Lumada platform will allow GlobalLogic to expand the digital solutions portfolio of Hitachi in the global marketplace, particulary through flexible cloud application development.

After the acquisition GlobalLogic is expected to be actively involved in all five key areas of Hitachis business: IT, energy, production, mobility and Smart Life, as well as in the automotive systems business (Hitachi Astemo).

Amazon buys Hollywood studio Metro-Goldwyn-Mayer for USD 8.45 billion

Amazon and Metro-Goldwyn-Mayer have officially announced a merger agreement under which Amazon will acquire MGM for USD 8.45 billion.

Metro-Goldwyn-Mayer, which owns the rights to the James Bond series, will complement Amazon Studios, which focuses in the main on producing TV programmes.

Amazon will help to preserve the legacy and catalogue of MGM movies and provide customers with greater access to existing works.

The MGM agreement is Amazons second-largest acquisition, behind its USD 13.7 billion purchase of Whole Foods in 2017.

The purchase price includes the assumption of MGM debt. MGM will continue to operate as a label under the Amazon brand.

Zoom buys cloud service provider for nearly USD 15 billion

Zoom Video Communications has agreed to buy the cloud service provider Five9 for USD 14.7 billion. The agreement is expected to be closed in the first half of 2022.

Zoom is buying a cloud service provider that could be able to support its popular video conferencing app.

Once the agreement is approved, the cloud services company will become an operating unit of Zoom. Five9 had earlier participated in testing of the equipment produced by Zoom.

Zoom shares rose in price fivefold in 2020, and the companys market capitalization exceeded USD 100 billion.

Competition

Google fined EUR 200 million by French regulator

Google has been fined EUR 220 million by the French competition authority for abusing its own dominant position when promoting its own services in online advertising to the detriment of its competitors.

In its statement the authority mentioned that Google did not deny the facts, and the decision on the fine was agreed as part of a settlement procedure with the American giant.

The authority noted that Google has given preferential mode to its patented technologies offered under the Google Ad Manager brand.

The case against Google was opened by the regulator based on a complaint received in 2019 from News Corp., the French newspaper Le Figaro and the Belgian media group Rossel La Voi. Le Figaro group later withdrew from the procedure.

It is a landmark decision, being the worlds first one relating to the complex algorithmic bidding processes by which interactive ATL advertising displayed on the screens of Internet users operates.

Facebooks market value surpassed USD 1 trillion for first time

On 29 June, a United States court rejected an antitrust lawsuit against Facebook that tried to force the company to sell Instagram and WhatsApp.

Facebook shares rose more than 4% after the ruling and put Facebooks market capitalization over USD 1 trillion for thefirst time.

The Federal Court rejected the antitrust complaint of the Federal Trade Commission (FTC) against Facebook, saying the agency did not provide evidence to prove that the social media giant has a monopoly on social media.

It was also stated that the FTC did not provide enough evidence to prove that Facebook has more than 60% of the personal social media market.

Capital markets

Localized ISDA documentation is just around the corner

Participants of the Ukrainian capital and commodity market will soon benefit from standardized documentation for over-the-counter (OTC) derivatives. The documentation will be based upon the International Swaps and Derivatives Association (ISDA) Master Agreement. Such a Ukrainian-law governed version of the ISDA master agreement will help parties to better manage their risks and reduce the time and costs needed for them to reach an agreement. It will provide for common rules and procedures that will be enforceable under Ukrainian legislation and should create a safe, efficient and resilient OTC derivative market for the both the buy side and sell side. A localized ISDA master agreement will be adopted for trades between two Ukrainian counterparties. For example, between banks, corporates and investment firms. It can be used for derivatives with a wide range of referenced assets, such as foreign currency, interest rates, or commodities.

Kinstellar law firm, acting as legal counsel to the national working group, is drafting such localized documentation that will consist of a master agreement, a schedule, confirmation, a margin agreement and standardized terms (booklets) - definitions for foreign currency, interest rate and commodity derivatives. The work is supported by the USAID Financial Sector Transformation Project and is being developed in close cooperation with major industry associations, namely the Independent Association of Banks of Ukraine, the European Business Association and the American Chamber of Commerce. The localized ISDA documentation is expected to be finalized and published in September of this year.

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