Data breaches cost FS $6.08m in 2024, reveals new report

BY Fraser Tennant

The global average cost of a data breach in the financial services (FS) sector was $6.08m in 2024, further expanding demands on firms’ cyber teams, according to a new report by IBM and the Ponemon Institute.

In its ‘Cost of a Data Breach Report 2024’ IBM reveals that the FS sector was the second highest of the 17 industries examined in the report – 22 percent higher than the cross-industry average cost of $4.88m.

The top three initial attack vectors affecting banks, insurers and other financial institutions were phishing, compromised credentials and cloud misconfigurations. Only 28 percent of FS firms employed extensive use of security artificial intelligence and automation last year, but those that did saw average cost savings of $1.9m per incident over institutions that did not.

According to the report, attacks on FS institutions typically took 168 days to identify and 51 days to contain – faster than the cross-industry average of 194 days and 64 days respectively.

Additional cross-industry findings in the 2024 IBM report include: (i) more organisations faced severe staffing shortages in 2024 compared to the prior year; (ii) 44 percent of breaches involved data stored across multiple environments including public cloud, private cloud and on-prem; and (iii) organisations would increase the cost of goods or services because of a breach – a slight increase from last year and the third consecutive year that the majority of businesses would push breach costs to consumers.

“Businesses are caught in a continuous cycle of breaches, containment and fallout response,” said Kevin Skapinetz, vice president of strategy and product design at IBM Security. “This cycle now often includes investments in strengthening security defenses and passing breach expenses on to consumers – making security the new cost of doing business.

“As generative AI (GenAI) rapidly permeates businesses, expanding the attack surface, these expenses will soon become unsustainable, compelling business to reassess security measures and response strategies. To get ahead, businesses should invest in new AI-driven defences and develop the skills needed to address the emerging risks and opportunities presented by GenAI.”

The report is based on an in-depth analysis of real-world data breaches experienced by 604 organisations globally between March 2023 and February 2024. The research, conducted by Ponemon Institute, and sponsored and analysed by IBM, has been published for 19 consecutive years.

Report: Cost of a Data Breach Report 2024

Software provider Mobileum files for Chapter 11

BY Fraser Tennant

In a bid to trim a debt of more than $500m, telecommunications services provider Mobileum and certain of its US-based affiliates has filed for Chapter 11 bankruptcy in order to complete a restructuring support agreement (RSA).

The RSA, which has the full support of its key financial partners, will strengthen Mobileum’s financial foundation, significantly deleverage its capital structure and provide the company with $60m of new money through a debtor-in-possession (DIP)-to-exit facility.

The Chapter 11 filing does not include any of Mobileum’s non-US subsidiaries, and the company’s international operations are not part of the court-supervised restructuring process. Additionally, the RSA contemplates that trade vendors and suppliers will be paid in full under normal terms for goods and services provided on or after the filing date.

Through the RSA and related restructuring transactions, Mobileum is expected to eliminate $529m of prepetition debt and substantially reduce its interest expense burden, positioning the company for sustainable, long-term growth and allowing Mobileum to continue to capitalise on long-term 5G and internet of things tailwinds.

Global operations are expected to continue without interruption during the Chapter 11 cases, including complete continuity of all telecommunications products and services. Mobileum expects to swiftly complete its financial restructuring and emerge from Chapter 11 within 60 days.

“The RSA and filing are important steps forward that will position Mobileum to continue as a leading provider for the telecommunications industry for the long-term,” said Mike Salfity, chief executive of Mobileum. “With a strengthened balance sheet and the committed support of our financial partners, Mobileum will be equipped with the financial flexibility to build for the future and continue driving value for our customers through our suite of category-defining analytics solutions.”

Headquartered in Silicon Valley, Mobileum is a leading provider of telecommunications analytics solutions for roaming, core network, security, risk management, domestic and international connectivity testing and customer intelligence. It has global offices in countries including Germany, Greece, India, Japan, Portugal, Singapore and the United Arab Emirates.

Mr Salfity concluded: “We expect complete continuity during the Chapter 11 and RSA processes, and for our customers to maintain uninterrupted access to Mobileum’s mission critical products and services.”

News: Mobileum goes bankrupt amid PE owners' legal battle

Carlsberg to acquire Britvic in $4.2bn deal

BY Richard Summerfield

Danish brewer Carlsberg has agreed to buy UK soft drinks maker Britvic in a deal worth around $4.2bn.

Following two unsuccessful attempts to acquire the company in June, which Britvic said significantly undervalued it, Carlsberg returned with a sweetened bid of 1315 pence per share – comprising cash and a special dividend of 25 pence a share. The rejected bids priced shares at 1200p and then at 1250p apiece.

Carlsberg expects the deal to deliver a number of benefits, including cost and efficiency savings worth $128m over five years, thanks to common procurement, production and distribution networks. Carlsberg plans to name the new beverage business Carlsberg Britvic.

The deal will also expand Carlsberg’s existing relationship with PepsiCo. Britvic bottles PepsiCo drinks in the UK and Ireland while Carlsberg bottles products for the US giant in other countries such as Norway and Sweden. To facilitate the acquisition of Britvic, PepsiCo agreed to waive a change-of-control clause in its contract with the UK firm.

“Britvic is an outstanding business with a strong heritage built on its portfolio of family-favourite brands, long-standing customer relationships, a well-invested supply chain infrastructure and a fantastic team of people across multiple markets,” said Ian Durant, non-executive chair of Britvic. “All these factors have supported a consistent track record of delivery for Britvic’s stakeholders over a sustained period of time.

“The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors,” he continued. “Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success.”

“With this transaction, we are combining Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and markets in Western Europe,” said Jacob Aarup-Andersen, chief executive of Carlsberg. “The proposed transaction is attractive for shareholders of Carlsberg, supporting our growth ambitions and being immediately earnings accretive and value accretive in year three.

“We are committed to accelerating commercial and supply chain investments in Britvic, and we are confident that Carlsberg Britvic will become the preferred multibeverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands,” he added.

“We are looking forward to building on our long-standing and successful partnerships with both Carlsberg and Britvic,” said Silviu Popovici, chief executive of PepsiCo Europe. “We believe that the combination of Carlsberg and Britvic will create even stronger sales and distribution capabilities for our winning brands in important markets. We look forward to continuing to expand the partnership into further important markets in the future.”

News: Carlsberg to buy Britvic for $4.2 billion

Saks parent HBC acquires Neiman Marcus in $2.65bn deal

BY Fraser Tennant

In a deal that gives them stronger negotiating power with vendors and greater ability to control costs, Saks Fifth Avenue parent HBC will acquire department-store chain Neiman Marcus for a total enterprise value of $2.65bn.

HBC is financing the deal via a $1.15bn fully committed term loan financing from investment funds and accounts managed by affiliates of Apollo, and a $2bn fully committed revolving asset-based loan facility from Bank of America, Citigroup, Morgan Stanley, RBC Capital Markets and Wells Fargo.

The deal has been struck at a time when luxury retailers are battling slowing demand as high interest rates and inflation force customers to reduce budgets, following a luxury retail boom after the coronavirus (COVID-19) pandemic.

Upon the close of the transaction, HBC will establish Saks Global, a combination of world-class luxury retail and real estate assets, including Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman – each of which will continue operations under their respective brands.

“We are thrilled to take this step in bringing together these iconic luxury names,” said Richard Baker, executive chairman and chief executive of HBC. “For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees.”

The boards of directors of HBC and Neiman Marcus Group have approved the transaction.

“This transaction is a testament to our team's unwavering commitment to building rewarding customer relationships, driven by our differentiated business model,” said Geoffroy van Raemdonck, chief executive of Neiman Marcus Group. “We believe this is a proactive choice in an evolving retail landscape that will create value for our customers and brand partners.”

The transaction is subject to the receipt of required regulatory approvals, and other customary closing conditions. Until closing, the companies will continue to operate separately.

Mr Baker concluded: “This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees.”

News: Saks owner to buy luxury retailer Neiman Marcus in $2.65-billion deal

Boeing acquires Spirit in $4.7bn aero deal

BY Fraser Tennant

In a move that sees it repurchase its former subsidiary, global aerospace company Boeing is to acquire aerostructures manufacturer and supplier Spirit AeroSystems in an all-stock transaction valued at approximately $4.7bn.

Under the terms of the definitive merger agreement, Boeing will acquire Spirit for $37.25 per share in Boeing common stock, which represents a 30 percent premium to Spirit’s closing stock price of $28.60 on 29 February 2024.

Boeing has long pondered buying back its former subsidiary, which aerospace analysts say has struggled to thrive independently despite diversifying into work for Europe’s Airbus and others.

“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” said Dave Calhoun, president and chief executive of Boeing. “By reintegrating Spirit, we can fully align our commercial production systems, including our safety and quality management systems, and our workforce to the same priorities, incentives and outcomes – centred on safety and quality.”

Boeing’s acquisition of Spirit will include substantially all Boeing-related commercial operations, as well as additional commercial, defence and aftermarket operations. As part of the transaction, Boeing will work with Spirit to ensure the continuity of operations supporting Spirit’s customers and programmes it acquires, including working with the US Department of Defence and Spirit defence customers regarding defence and security missions.

“After carefully evaluating Boeing’s offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit’s other stakeholders,” said Patrick M. Shanahan, president and chief executive of Spirit. “Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems.”

Concurrently with the closing of Spirit’s acquisition by Boeing, Spirit has entered into a binding term sheet with Airbus. Under the term sheet, the parties will continue to negotiate in good faith to enter into definitive agreements for Airbus to acquire certain Spirit assets that serve Airbus programmes.

The definitive merger agreement with Boeing and the term sheet with Airbus have been unanimously approved by the board of directors of Spirit.  

Mr Shanahan concluded: “We are proud of the part we have played in Airbus’ programmes and believe bringing these programs under Airbus ownership will enable greater integration and alignment.”

News: Spirit Aero to be broken up as Boeing agrees $4.7 billion stock deal