President Donald Trump has ordered the blocking of a planned takeover of chipmaker Qualcomm by Singapore-based rival Broadcom on national security grounds.
The president’s order cited “credible evidence” that the proposed $140 billion deal “threatens to impair the national security of the US”.
There were concerns the takeover could have led to China pulling ahead in the development of 5G wireless technology.
The $140 billion deal would have been the biggest technology sector takeover on record.
According to analysts, a takeover of Qualcomm by Broadcom would have created the world’s third-largest maker of microchips, behind Intel and Samsung.
The chipmaking sector is in a race to develop chips for the latest 5G wireless technology and Qualcomm is considered to be a leader in this field, followed by Broadcom and China’s telecoms giant Huawei.
Qualcomm is highly regarded for its commitment to research and development (R&D), particularly in the field of 5G technology. Huawei is equally committed to R&D in the area.
Broadcom is better known for selling assets and growing through acquisitions, and deemed to be weaker on R&D.
Analysts also say a deal between Qualcomm and Broadcom could have given Huawei the chance to take over the top spot in years to come – a situation US politicians wanted to prevent given their ongoing security concerns around Chinese telecom firms doing business with US carriers.
Broadcom said it was reviewing the order and “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns”.
The company had been pursuing San Diego-based Qualcomm for about four months.
Last week, however, Broadcom’s hostile takeover bid was put under investigation by the Committee on Foreign Investment in the US (CFIUS), a multi-agency body led by the Treasury Department.
Broadcom had rejected approaches from its rival on the grounds that the offer undervalued the business, and also that any takeover would face antitrust hurdles.
Both companies are grappling with sliding sales at US department stores where their products have traditionally been sold.
Coach shares rose 4.6% in New York, while Kate Spade jumped 8.2%.
Image source Flickr
Coach was founded in 1941, while Kate Spade was established in 1993 by former journalist Kate Brosnahan Spade.
The handbag maker expanded quickly and its products stocked by upmarket retailers such as Saks Fifth Avenue and Neiman Marcus.
Although Coach and Kate Spade sell shoes and clothing both are best-known for their handbags.
Kate Spade’s handbags have found favor with millennials due to their subtle logos and quirky and colorful designs, including bags shaped like cats and cars.
Coach CEO Victor Luis said the acquisition would allow his company to target “a new customer segment”.
Prices for a Kate Spade tote bag starts at about $150 and rise to around $450. A Coach equivalent begins at about $285 but can rise to as much as $2,500.
Victor Luis, who took over as chief executive in 2014, has been working to expand Coach’s lines and two years ago acquired shoe company Stuart Weitzman.
Unilever has turned down a takeover offer from food giant Kraft Heinz.
However, the Heinz ketchup maker indicated it would continue working towards striking a deal.
Shares in Anglo-Dutch giant Unilever surged more than 11% in London, but the company said it saw “no merit, either financial or strategic” in the bid.
The deal would be one of the biggest in corporate history, with Unilever currently valued at more than $125 billion.
Unilever, which makes Marmite, Ben & Jerry’s ice cream, Dove soap, and Hellmann’s mayonnaise, said the offer from Kraft “fundamentally undervalued” the company.
“Unilever does not see the basis for any further discussions,” it added.
Kraft Heinz said it had made “a comprehensive proposal” and looked “forward to working to reach agreement on the terms of a transaction”.
Unilever clashed with UK supermarket Tesco in October over its attempts to raise prices to compensate for the steep drop in the value of the pound.
Kraft’s offer was at an 18% premium to Unilever’s closing share price on February 17, Unilever said.
Analysts said Kraft was likely to return for another offer for Unilever, one of the biggest companies on the UK’s FTSE 100 share index.
Warren Buffett and Brazilian private equity company 3G are major investors in Kraft, which also makes Philadelphia cheese and Heinz baked beans.
Kraft merged with Heinz in 2015 to create one of America’s biggest food companies.
Nissan has announced it will acquire a 34% stake in rival Mitsubishi Motors, in the wake of the latter’s recent scandal over fuel efficiency.
According to the Japanese auto giant, the all-share deal is valued at 237 billion yen ($2.2 billion).
Nissan CEO Carlos Ghosn has called the deal “a breakthrough transaction and a win-win” for both companies.
The tie-up is subject to regulatory approval as well as the backing of Mitsubishi shareholders.
If it is approved, the deal is expected to close by the end of 2016 and make Nissan the largest shareholder in Mitsubishi Motors.
The strategic alliance will extend an existing partnership between Nissan and Mitsubishi Motors forged over the past five years.
Both will co-operate in areas including purchasing, technology and sharing platforms.
Carlos Ghosn said: “We will support Mitsubishi Motors as they address their challenges and welcome them as the newest member of our enlarged alliance family.”
Nissan’s Alliance family is built around a 17-year cross shareholding agreement with French auto maker Renault. Nissan has also previously acquired stakes or signed partnerships with other carmakers including Daimler.
Mitsubishi Motors CEO Osamu Masuko said he hoped the deal with Nissan would restore confidence in the company: “It is not an easy task to regain trust, so through the alliance with Nissan, we will be starting a path towards tackling this difficult task.”
The tie-up was announced as Nissan reported a 14.5% rise in net profit to 523.8 billion yen ($4.4 billion) for the 12 months to March.
Nissan said rising demand in North America and China helped to offset unfavorable currency movements and weakness in emerging markets.
For the financial year to March 2017, Nissan is estimating flat profit growth and an 11% fall in operating profit due to the strengthening yen.
Carlos Ghosn said: “Encouraging demand for new models, combined with continued cost efficiency, helped us withstand currency headwinds and volatile trading conditions in several emerging markets.”
Nissan’s recently launched models including the Maxima, Altima and Titan pick-up trucks were expected to contribute to global sales growth in the coming year.
Halliburton and Baker Hughes have abandoned their proposed merger after resistance from regulators in the US and Europe.
The deal would have seen a $34.6 billion takeover by Halliburton of Baker Hughes, creating a powerful rival to global leader Schlumberger.
The US companies are the second and third biggest oil services companies.
That raised concerns about higher prices and reduced competition.
Baker Hughes stands to receive a $3.5 billion break-up fee as a result of the deal falling through.
Failure to satisfy regulatory concerns was not the only reason for abandoning the merger.
The fall in the oil price since the proposal was announced in 2014 changed the financial attractiveness of the cash and shares deal.
The DoJ filed a lawsuit to stop the merger in April, arguing it would leave only two dominant suppliers in the well drilling and oil construction services industry.
The European Commission also expressed concerns that the deal might reduce competition and innovation.
Halliburton and Baker Hughes have been hit by a fall in business as oil and gas giants rein back on projects and investments.
Last week, Baker Hughes reported a bigger-than-expected loss for Q1 of 2016.
Sharp has accepted a $4.3 billion takeover bid by Taiwanese multinational Foxconn.
The announcement came as Sharp’s board completed a two-day meeting to discuss competing takeover offers.
Foxconn assembles most of the world’s iPhones. Sharp is one of Japan’s oldest technology companies.
It is the first foreign takeover of a major Japanese electronics firm in a historically insular technology sector.
Japanese officials had been reluctant to let Sharp fall under foreign ownership because of the distinctive technology behind its display panels.
Founded in 1912, innovations by Sharp include a mechanical pencil in 1915 and pioneering developments in TV engineering.
Although recent years have seen a downturn in Sharp’s fortunes with heavy debts, the company continued to be a leader in liquid display technology, a key asset for Foxconn.
Shares in Sharp, which employs more than 50,000 globally, will be issued to Hon Hai Precision Industry Company, also known as Foxconn Technology Group.
Sharp’s shares were halted from trading ahead the announcement. They later reopened and closed down by nearly 15%.
Earlier this month, as it was considering several takeover offers, Sharp posted a bigger-than-expected net loss of $918 million for the April-to-December 2015 period.
In 2012, Sharp came close to entering bankruptcy. It has struggled with heavy debts and has been through two major bailouts in the last four years.
Foxconn first offered to invest in Sharp in 2012, but talks collapsed.
Allergan has confirmed it has held preliminary talks about a takeover by pharmaceutical giant Pfizer.
The Dublin-based Botox-maker said no agreement had been reached and there was “no certainty that these discussions will lead to a transaction”.
Allergan shares were up more than 6% on October 29 trading in New York.
Analysts said Pfizer needed to boost profits and may be looking to escape relatively high US corporate tax rates by moving its headquarters to Dublin.
“Allergan today confirmed that it has been approached by Pfizer Inc. and is in preliminary friendly discussions regarding a potential business combination transaction,” the company said in a statement.
“The company will not comment on speculation regarding the terms of a potential transaction.”
The talks were first reported in the media on October 28.
In 2014, Pfizer made an offer to buy another UK drugs group, AstraZeneca, but Astra rejected the offer, arguing it undervalued the company.
Giant beer producer SABMiller accepted an increased takeover offer from rival Anheuser-Busch InBev.
SABMiller said it had agreed “in principle” a £44-a-share offer, after four previous attempts from AB InBev.
AB InBev’s brands include Stella Artois, Budweiser and Corona, while SABMiller produces Peroni and Grolsch.
If the deal, worth about £70 billion ($112 billion), goes ahead, the newly-created company will make about 30% of the world’s beer.
SABMiller has a workforce of close to 70,000 people in more than 80 countries, and global annual sales of more than $26 billion. AB InBev has a workforce of 155,000 and global revenues of more than $47 billion.
Photo Reuters
AB InBev had made four previous bid approaches for SABMiller – at £38, £40, £42.15, and £43.50 per share – but they had been rejected by SABMiller, which argued they undervalued the company.
In a statement, the boards of the two companies said they had now “reached agreement in principle on the key terms of a possible recommended offer”.
The two companies have not yet formally finalized the terms of an offer, but the latest development means they have extended the City deadline for a firm offer until October 28.
The latest proposal comes a day before the original deadline, by which AB InBev had to make a formal bid for SABMiller or walk away for six months.
The offer represents a premium of about 50% over and above SABMiller’s share price in mid-September, before the bid battle started.
On October 13, SabMiller’s share price rose 9% to £39.48 in London trade, while shares in AB InBev were 2.85% higher at €101.15 in trading in Brussels.
Nokia is to buy France’s Alcatel-Lucent in a €15.6 billion ($17 billion) takeover deal.
Under the all-share deal, Alcatel-Lucent shareholders will own 33.5% of the new combined company, and Nokia shareholders 66.5%.
Both companies said their boards had agreed the takeover and they expected it to go through in the first half of 2016.
The merger will form a European telecoms equipment group worth more than €40 billion.
Nokia CEO Rajeev Suri said the companies’ complementary technologies would give them “the scale to lead in every area in which we choose to compete”.
Photo Reuters
“I firmly believe that this is the right deal, with the right logic, at the right time,” Rajeev Suri said.
Nokia and Alcatel-Lucent are currently among the weakest players in the telecoms equipment industry. However, the combined company will have a market share of 35%, making it second only to Swedish rival Ericsson, which has 40%, according to Bernstein Research.
The companies expect the merger to cut operating costs by €900 million by 2019, but Nokia said it would not cut jobs beyond what Alcatel had already planned.
“No job cuts” in France was the condition under which the French government said on April 14 that it would back the deal.
Alcatel-Lucent’s shares fell 10% in early trading, with traders attributing the fall to shareholders’ disappointment that the deal did not have a cash element.
However, Nokia’s shares rose almost 5%, despite some analysts saying that the deal could take a long time to pay off.
Yahoo has announced it will buy digital video advertising service BrightRoll for $640 million.
The move would allow Yahoo to grow its video advertising platform, “making it the largest in the US”, the giant tech said.
BrightRoll does automated online video advertising for some of the world’s biggest brands and its net revenue is expected to exceed $100 million this year.
A jump in video advertising would also help offset Yahoo’s slowing growth and boost declining display ad revenues.
Yahoo has announced it will buy digital video advertising service BrightRoll for $640 million (photo Reuters)
“Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business,” said Yahoo CEO Marissa Mayer in a statement on November 11.
Last month, Yahoo had reported that its Q3 revenue from ads fell by 5% from a year earlier. It has struggled to keep up with rivals like Google that have seen ad revenue grow by 17% in third quarter from a year ago.
The acquisition is also Yahoo’s first major purchase since receiving $9.4 billion in September from selling part of its stake in Chinese e-commerce giant Alibaba.
News of the takeover comes after reports in October that said Yahoo was close to investing millions of dollars in mobile messaging startup Snapchat.
Burger King has confirmed it is in takeover talks with Canadian coffee and doughnut chain Tim Hortons.
A merger would create the world’s third-largest fast-food combine, one with a stock market value of about $18 billion.
Burger King and Tim Hortons confirmed the talks on August 24 and said the new group would be headquartered in Canada, where corporate taxes are lower.
Burger King’s majority shareholder, 3G Capital, would stay in overall control.
Burger King has confirmed it is in takeover talks with Canadian coffee and doughnut chain Tim Hortons (photo AFP)
New York and Rio de Janeiro-based investment company 3G Capital bought Burger King in 2010 for about $3.3 billion and floated the company in 2012, holding on to nearly 70% of the shares.
If a deal goes ahead, the remaining shares will be distributed between the current shareholders of Burger King and Tim Hortons.
According to reports, the companies will retain their separate brand identities but save costs by sharing corporate services.
Combined, Burger King and Tim Hortons would have an estimated revenue of $22 billion a year from around 18,000 restaurants in 100 countries.
Tim Hortons used to be owned by US fast-food chain Wendy’s, before being spun off as a separate company in 2006.
Malaysian state fund Khazanah Nasional has proposed a “complete overhaul” of national carrier Malaysia Airlines.
Khazanah wants to buy the shares it does not already own in Malaysia Airlines and delist the carrier.
The airline has been hurt by two major tragedies – the crash of flight MH17 in Ukraine and disappearance of flight MH370 – in recent months.
The two incidents have triggered concerns about the airline’s future.
Khazanah, which currently owns 69.4% of Malaysia Airlines, has offered to pay 0.27 ringgit ($0.08) per share for the remaining stock, a 12.5% premium to the closing price on Thursday.
Khazanah Nasional has proposed a complete overhaul of Malaysia Airlines
Trading in shares in Malaysia Airlines was suspended on Friday, ahead of the announcement.
Malaysia Airlines flight MH370 went missing on March 8 while flying from Kuala Lumpur to Beijing, leading to a massive search and rescue operation that is still continuing and may cost millions of dollars.
The majority of the passengers on board that flight were from China.
The crisis led to a high number of cancellations and reputational damage to the carrier, including a 60% drop in sales from China.
Malaysia Airlines suffered another major setback in July after all 298 people on board flight MH17 died as the plane was brought down in eastern Ukraine, close to the border with Russia.
The company has been losing money for many years and its market value has fallen by more than 40% in the past nine months.
In May, it reported that its net loss had widened by 59% to 443 million ringgit ($138 million) in the January-to-March period.
That marked that the fifth straight quarter of losses for the airline.
Khazanah, which has invested more than $1bn into the airline in recent years, had previously indicated that a major restructuring was on the cards.
On Friday, the state fund said it would look at restructuring all aspects of Malaysia Airlines’ operations including its business model, finances and human capital.
“Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity,” the fund said in a statement.
21st Century Fox has withdrawn its bid to purchase entertainment giant Time Warner for an estimated $80 billion.
Time Warner rejected Fox’s initial offer in July.
Rupert Murdoch’s company wrote in a statement that Time Warner had “refused to engage with us to explore an offer which was highly compelling”.
It added that the reaction in the company’s share price since the proposal was unveiled undervalued Fox.
Fox’s share price has declined by 11% since news of the takeover was revealed.
21st Century Fox has withdrawn its bid to purchase Time Warner for an estimated $80 billion
Meanwhile shares in Time Warner plunged more than 11% in after-hours trading after the surprise news of the withdrawal was announced.
“Time Warner’s Board and management team are committed to enhancing long-term value and we look forward to continuing to deliver substantial and sustainable returns for all stockholders,” said Time Warner in a statement.
A merger between the two giants would have significantly altered the media industry in the US and created one of the world’s largest media conglomerates.
Time Warner owns several lucrative cable channels – including HBO, TNT, and TBS – whereas Fox is the owner of the dominant Fox News channel in the US.
The acquisition offer was seen as a way for Fox to stay competitive as other big players in the industry, including Comcast and AT&T, also engage in mergers and take over offers.
Some observers wondered if the withdrawal was just a ploy by Rupert Murdoch to drive Time Warner’s share price lower as part of his larger takeover strategy.
As part of the announcement, Fox also said it would authorize a $6 billion share repurchase program.
That pleased investors, who sent shares in the company up over 7% in trading after markets were closed.
Both companies are set to report their second-quarter earnings on Wednesday.
Time Warner has rejected an initial takeover approach from rival 21st Century Fox estimated at $80 billion.
The takeover approach by the Rupert Murdoch owned company was made last month, it was revealed.
21st Century Fox confirmed in a statement on Wednesday that its offer for Time Warner had been rejected.
It added it was not currently in talks with Time Warner about pursuing the deal further.
Time Warner has rejected an initial takeover approach from rival 21st Century Fox estimated at $80 billion
“21st Century Fox can confirm that we made a formal proposal to Time Warner last month to combine the two companies,” the company said.
“The Time Warner board of directors declined to pursue our proposal. We are not currently in any discussions with Time Warner.”
21st Century Fox owns movie studio 20th Century Fox and cable news channel Fox News.
According to the New York Times, Fox offered to sell Time Warner-owned CNN as part of the takeover deal proposal for its rival in order to clear any objections US regulators might have had to the deal.
A statement released by Time Warner said after lengthy discussions it had decided it was not in its best interests or those of its shareholders to accept the proposal or to pursue any further discussions with Fox.
Time Warner’s share price jumped some 16.35% higher in the first 20 minutes of trade on the New Stock Exchange to $82.62 per share.
Pfizer’s bid for AstraZeneca is being questioned by senators and Maryland and Delaware governors.
Maryland and Delaware governors have written to Pfizer’s boss saying they are “very concerned” about the deal and the possibilities of job losses in their states.
Meanwhile senators Carl Levin and Roy Wyden are looking to close the tax loophole that Pfizer plans to use.
One of the attractions of the deal to Pfizer is that it could significantly lower the company’s tax bill.
Pfizer’s bid for AstraZeneca is being questioned by senators and Maryland and Delaware governors
In a strategy known as “tax inversion” Pfizer could pay the UK corporate tax rate of 20%, rather than the 35% rate applied in the US, if it bought AstraZeneca.
Senator Carl Levin said in a statement: “I’ve long been concerned about inversions – companies moving offshore on paper, for tax purposes, while the management and operations remain in the United States.
“It’s become increasingly clear that a loophole in our tax laws allowing these inversions threatens to devastate federal tax receipts.
“We have to close that loophole. I am talking to my colleagues about legislation to close the loophole, which I intend to introduce soon.”
Meanwhile governors Martin O’Malley and Jack Markell are concerned about job losses.
AstraZeneca employs approximately 3,100 people in Maryland, and has around 2,600 staff in Delaware.
The governors are concerned about reports that Pfizer has given assurances to the UK government that there will be no British job losses at AstraZeneca.
They say they have had no similar assurances about AstraZeneca facilities in their states.
“Our concern is exacerbated by Pfizer’s history of closing US research facilities, including sites in Michigan and Illinois, after closing on previous corporate transactions,” Martin O’Malley and Jack Markell said in a statement.
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