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Merkel Gives Turkey Hope for E.U. Membership

February 25, 2013 by Leave a Comment

“In recent times, negotiations stalled somewhat and I am in favor of opening a new chapter in order to move forward,” Ms. Merkel said in her weekly podcast, broadcast on Saturday.

She began her tour on Sunday with a visit to German troops who are deployed along the Turkish border with Syria.

There is significant skepticism within Ms. Merkel’s conservative Christian Democratic Union about Turkish membership in the European Union, but as Turkey has continued to grow and the economies of the bloc have stagnated, the dynamic has begun to change.

Germany and Turkey are bound tightly by the large population of Turkish guest workers who came to work in West German factories in the 1960s and remained. In addition, Turkey is one of Germany’s most important trade partners outside of the European Union, with an annual exchange of goods worth roughly $40 billion.

The country pushed through structural reforms to its economy and social services nearly a decade ago as part of its efforts to join the bloc, which have helped contribute to solid growth of about 5.2 percent annually between 2002 and 2011, according to Turkish government figures.

Günther Oettinger, a member of the Christian Democrats who now serves as the energy commissioner for the European Union, stirred debate in Berlin last week when he said in an interview with the newspaper Bild that he believed that if the European Union waited too long to revive negotiations with Turkey, it risked an eventual turning of the tables.

“I’d bet that within the next decade, a German chancellor along with their colleagues from France will go begging on their knees to Ankara saying, ‘Friends, come to us,’ ” Mr. Oettinger told the newspaper.

Turkey has complained bitterly about the lack of support from the German government for its accession campaign, which started in 2005. Recently, negotiations have all but ground to a halt over opposing views on crucial issues, including human rights and a divided Cyprus.

Ms. Merkel’s government and the Christian Democrats have for years called on the bloc to allow Turkey to achieve what they call a “privileged partnership,” instead of full membership. But important party members have begun to indicate their apprehensions toward Ankara may be changing.

France has also resisted the idea of Turkey’s full accession and, with Cyprus and the European Commission, has blocked movement on all but 13 of the 35 policy areas, called chapters, that countries striving for membership must complete. Turkey has so far completed only one.

But President François Hollande of France signaled last week that he was ready to open talks on one chapter blocked under the government of his predecessor, Nicolas Sarkozy.

Prime Minister Erdogan said in Istanbul that he was hopeful that Ms. Merkel’s comments and similar remarks by Mr. Hollande meant there could be renewed movement while the Irish presidency holds the European Union’s rotating presidency, which ends in July.

“Since Ms. Merkel came to office, she has repeatedly used the expression ‘privileged partnership’ about our European Union process,” Mr. Erdogan said, according to Reuters.

He said: “Now there is change in France and a difference in the views of Germany and France. Along with Chancellor Merkel’s positive statement on opening chapters, these will pay off during Ireland’s presidency.”

On Monday, she will hold talks in Ankara with Mr. Erdogan and President Abdullah Gul.

“I think a long negotiating path lies ahead of us,” Ms. Merkel said “Although I am skeptical, I agreed with the continuation of membership discussions. We are engaging in these with an open result.”

Article source: http://www.nytimes.com/2013/02/25/world/europe/merkel-gives-turkey-hope-for-eu-membership.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Dell Goes Private in $24 Billion Buyout, Largest Since 2007

February 5, 2013 by Leave a Comment

The decision to take Dell private puts the company more firmly under the control of Michael S. Dell.Kimihiro Hoshino/Agence France-Presse — Getty ImagesThe decision to take Dell private puts the company more firmly under the control of Michael S. Dell.

9:32 a.m. | Updated

Dell announced on Tuesday that it had agreed to go private in a $24.4 billion deal led by its founder and the investment firm Silver Lake, in the biggest leveraged buyout since the financial crisis.

Under the terms of the deal, the buyers’ consortium, which also includes Microsoft, will pay $13.65 a share in cash. That is roughly 25 percent above where Dell’s stock traded before word emerged of the negotiations of its sale.

Michael S. Dell will contribute his stake of roughly 14 percent toward the transaction, and will contribute additional cash through his private investment firm, MSD Capital. Silver Lake is expected to contribute about $1 billion in cash, while Microsoft will loan an additional $2 billion.

Dell’s board is said to have met on Monday night to vote on the deal. In its statement, the company said Mr. Dell recused himself from any discussions about a transaction and did not vote.

As a newly private company – now more firmly under the control of Mr. Dell – the computer maker will seek to revive itself after years of decline. The takeover represents Mr. Dell’s most drastic effort yet to turn around the company he founded in a college dormitory room in 1984 and expanded into one of the world’s biggest sellers of personal computers.

But the advent of new competition, first from other PC manufacturers and then smartphones and the iPad, severely eroded Dell’s business. Such is the concern about the company’s future that Microsoft agreed to lend some of its considerable financial muscle to shore up one of its most important business partners.

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” Mr. Dell said in a statement. “Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision.”

Still, analysts have expressed concern that even a move away from the unyielding scrutiny of the public markets will not let Mr. Dell accomplish what years of previous turnaround efforts have failed to achieve.

Nevertheless, the transaction represents a watershed moment for the private equity industry, reaching heights unseen over the past five years. It is the biggest leveraged buyout since the Blackstone Group‘s $26 billion takeover of Hilton Hotels in the summer of 2007, and it is supported by more than $15 billion of debt financing raised by no fewer than four banks.

“Michael Dell is a true visionary and one of the pre-eminent leaders of the global technology industry,” Egon Durban, a managing partner at Silver Lake, said in a statement. “Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global I.T. solutions provider.”

Mr. Dell first approached the board about taking the company private in August. That prompted the board to form a special committee, with JPMorgan Chase and the law firm Debevoise Plimpton as advisers. It was charged with considering alternatives to a management buyout, including other deals or borrowing money to pay out a special dividend.

To help ward off accusations of self-dealing by Mr. Dell, the special committee has hired an independent investment bank, Evercore Partners, specifically to oversee a 45-day “go shop” period in which the company will solicit other potential buyers.

“The special committee and its advisers conducted a disciplined and independent process intended to ensure the best outcome for shareholders,” Alex J. Mandl, the head of the Dell independent committee, said in a statement. “Importantly, the go-shop process provides a real opportunity to determine if there are alternatives superior to the present offer from Mr. Dell and Silver Lake.”

Dell itself was advised by Goldman Sachs and the law firm Hogan Lovells, while Mr. Dell retained Wachtell, Lipton, Rosen Katz as legal counsel. Silver Lake was advised by Bank of America Merrill Lynch, Barclays, Credit Suisse, RBC Capital Markets and the law firm Simpson Thacher Bartlett.

On Tuesday, Mr. Dell sent a memo to company employees about the deal. Here is a copy of the memo:

Today, we announced a definitive agreement for me and global technology investment firm Silver Lake to acquire Dell and take it private.

This transaction is an exciting new chapter for Dell, our team and our customers. We can immediately deliver value to stockholders, while continuing to execute our long-term growth strategy and focus on helping customers achieve their goals.

Together, we have built an incredible business that generates nearly $60 billion in annual revenue. We deliver enormous customer value through end-to-end solutions that are scalable, secure and easy to manage, and Enterprise Solutions and Services now account for 50 percent of our gross margins.

Dell’s transformation is well underway, but we recognize it will still take more time, investment and patience. I believe that we are better served with partners who will provide long-term support to help Dell innovate and accelerate the company’s transformation strategy. We’ll have the flexibility to continue organic and inorganic investment, and grow our business for the long term.

I am particularly pleased to be in partnership with Silver Lake, a world-class investment firm with an outstanding reputation and significant experience in the technology sector. They know all the technology business models, understand the value chain and have an extremely strong global network of contacts. I am also glad that Microsoft is part of the transaction, further building on a nearly 30-year relationship.

I am honored to continue serving as chairman and CEO, and I look forward to working with all of you, including our current senior leadership team, to accelerate our efforts. There is much more we can accomplish together. I am committed to this journey and I am grateful for your dedication and support. Please, stay focused on delivering results for our customers and our company.

There is still considerable work to be done, and undoubtedly both challenges and triumphs lie ahead, but as always, we are making the right decisions to position Dell, our team and our customers for long-term success.

Michael

Article source: http://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: $24 Billion Buyout for Dell, Biggest Since 2007

February 5, 2013 by Leave a Comment

The decision to take Dell private puts the company more firmly under the control of Michael S. Dell.Kimihiro Hoshino/Agence France-Presse — Getty ImagesThe decision to take Dell private puts the company more firmly under the control of Michael S. Dell.

9:32 a.m. | Updated

Dell announced on Tuesday that it had agreed to go private in a $24.4 billion deal led by its founder and the investment firm Silver Lake, in the biggest leveraged buyout since the financial crisis.

Under the terms of the deal, the buyers’ consortium, which also includes Microsoft, will pay $13.65 a share in cash. That is roughly 25 percent above where Dell’s stock traded before word emerged of the negotiations of its sale.

Michael S. Dell will contribute his stake of roughly 14 percent toward the transaction, and will contribute additional cash through his private investment firm, MSD Capital. Silver Lake is expected to contribute about $1 billion in cash, while Microsoft will loan an additional $2 billion.

Dell’s board is said to have met on Monday night to vote on the deal. In its statement, the company said Mr. Dell recused himself from any discussions about a transaction and did not vote.

As a newly private company – now more firmly under the control of Mr. Dell – the computer maker will seek to revive itself after years of decline. The takeover represents Mr. Dell’s most drastic effort yet to turn around the company he founded in a college dormitory room in 1984 and expanded into one of the world’s biggest sellers of personal computers.

But the advent of new competition, first from other PC manufacturers and then smartphones and the iPad, severely eroded Dell’s business. Such is the concern about the company’s future that Microsoft agreed to lend some of its considerable financial muscle to shore up one of its most important business partners.

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” Mr. Dell said in a statement. “Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision.”

Still, analysts have expressed concern that even a move away from the unyielding scrutiny of the public markets will not let Mr. Dell accomplish what years of previous turnaround efforts have failed to achieve.

Nevertheless, the transaction represents a watershed moment for the private equity industry, reaching heights unseen over the past five years. It is the biggest leveraged buyout since the Blackstone Group‘s $26 billion takeover of Hilton Hotels in the summer of 2007, and it is supported by more than $15 billion of debt financing raised by no fewer than four banks.

“Michael Dell is a true visionary and one of the pre-eminent leaders of the global technology industry,” Egon Durban, a managing partner at Silver Lake, said in a statement. “Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global I.T. solutions provider.”

Mr. Dell first approached the board about taking the company private in August. That prompted the board to form a special committee, with JPMorgan Chase and the law firm Debevoise Plimpton as advisers. It was charged with considering alternatives to a management buyout, including other deals or borrowing money to pay out a special dividend.

To help ward off accusations of self-dealing by Mr. Dell, the special committee has hired an independent investment bank, Evercore Partners, specifically to oversee a 45-day “go shop” period in which the company will solicit other potential buyers.

“The special committee and its advisers conducted a disciplined and independent process intended to ensure the best outcome for shareholders,” Alex J. Mandl, the head of the Dell independent committee, said in a statement. “Importantly, the go-shop process provides a real opportunity to determine if there are alternatives superior to the present offer from Mr. Dell and Silver Lake.”

Dell itself was advised by Goldman Sachs and the law firm Hogan Lovells, while Mr. Dell retained Wachtell, Lipton, Rosen Katz as legal counsel. Silver Lake was advised by Bank of America Merrill Lynch, Barclays, Credit Suisse, RBC Capital Markets and the law firm Simpson Thacher Bartlett.

On Tuesday, Mr. Dell sent a memo to company employees about the deal. Here is a copy of the memo:

Today, we announced a definitive agreement for me and global technology investment firm Silver Lake to acquire Dell and take it private.

This transaction is an exciting new chapter for Dell, our team and our customers. We can immediately deliver value to stockholders, while continuing to execute our long-term growth strategy and focus on helping customers achieve their goals.

Together, we have built an incredible business that generates nearly $60 billion in annual revenue. We deliver enormous customer value through end-to-end solutions that are scalable, secure and easy to manage, and Enterprise Solutions and Services now account for 50 percent of our gross margins.

Dell’s transformation is well underway, but we recognize it will still take more time, investment and patience. I believe that we are better served with partners who will provide long-term support to help Dell innovate and accelerate the company’s transformation strategy. We’ll have the flexibility to continue organic and inorganic investment, and grow our business for the long term.

I am particularly pleased to be in partnership with Silver Lake, a world-class investment firm with an outstanding reputation and significant experience in the technology sector. They know all the technology business models, understand the value chain and have an extremely strong global network of contacts. I am also glad that Microsoft is part of the transaction, further building on a nearly 30-year relationship.

I am honored to continue serving as chairman and CEO, and I look forward to working with all of you, including our current senior leadership team, to accelerate our efforts. There is much more we can accomplish together. I am committed to this journey and I am grateful for your dedication and support. Please, stay focused on delivering results for our customers and our company.

There is still considerable work to be done, and undoubtedly both challenges and triumphs lie ahead, but as always, we are making the right decisions to position Dell, our team and our customers for long-term success.

Michael

Article source: http://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Separating You and Me? 4.74 Degrees

November 22, 2011 by Leave a Comment

The world is even smaller than you thought.

Adding a new chapter to the research that cemented the phrase “six degrees of separation” into the language, scientists at Facebook and the University of Milan reported on Monday that the average number of acquaintances separating any two people in the world was not six but 4.74.

The original “six degrees” finding, published in 1967 by the psychologist Stanley Milgram, was drawn from 296 volunteers who were asked to send a message by postcard, through friends and then friends of friends, to a specific person in a Boston suburb.

The new research used a slightly bigger cohort: 721 million Facebook users, more than one-tenth of the world’s population. The findings were posted on Facebook’s Web site Monday night.

The experiment took one month. The researchers used a set of algorithms developed at the University of Milan to calculate the average distance between any two people by computing a vast number of sample paths among Facebook users. They found that the average number of links from one arbitrarily selected person to another was 4.74. In the United States, where more than half of people over 13 are on Facebook, it was just 4.37.

“When considering even the most distant Facebook user in the Siberian tundra or the Peruvian rain forest,” the company wrote on its blog, “a friend of your friend probably knows a friend of their friend.”

Though the study was by far the largest of its kind, independent scientists said it was not definitive, and they noted that it raised questions about definitions of terms like “friend” and “acquaintance.”

A Microsoft study in 2008, using a more conservative definition of friend, found an average chain of 6.6 people in a group of 240 million who exchanged chat messages. Eric Horvitz, a Microsoft researcher who led the study in 2008, said that network was based on people who actually exchanged messages, rather than those who simply identified as “buddies.”

“There is an issue of how many friends you actually have,” he said. But, he said, the Internet might have altered the definition.

“My own notion of what a friend is has evolved,” he said.

Jon Kleinberg, a computer science professor at Cornell and a faculty adviser to an author of the new study, said some links might be more meaningful than others.

He offered the example of a man wanted for a crime. A random Facebook user might discover that she once took a class with someone who once rented an apartment from someone who grew up with the suspect. They may all be connected as “friends” on Facebook.

“We are close, in a sense, to people who don’t necessarily like us, sympathize with us or have anything in common with us,” Dr. Kleinberg said. “It’s the weak ties that make the world small.”

Still, he noted that such ties were hardly meaningless. “We should ask what things spread well on weak ties,” he said. “News spreads well on weak ties. Those people I met on vacation, if they send me some cool news, I might send that to my friends. If they send me something about a protest movement, I might not.”

Matthew O. Jackson, an economist at Stanford who studies social networks, raised questions about the bias that was built into a study based on random samples. He said the study confirmed Facebook’s success at being the place where millions of people communicate. “It’s more evidence that they’ve been enormously successful at connecting a large number of people very well,” he said.

The research underscores the growing power of the emerging science of social networks, in which scientists study the ways people interact by crunching gigantic sets of Internet data.

“These social network tools provide individuals with tremendous reach,” said Dr. Horvitz, the Microsoft researcher. “People can share ideas with only a few jumps to a large portion of the world’s population and with even fewer steps to the entire population of a nation.”

In addition to social scientists, a new generation of Internet commerce is using social network research to market products, and Pentagon sleuths are using similar techniques to identify networks of insurgents.

The “six degrees” concept dates to a 1929 short story, “Chains,” in which Frigyes Karinthy, the Hungarian author, suggested that no one is more than a string of six friends away from any other person.

After Milgram published his famous paper “The Small World Problem,” in 1967, the playwright John Guare made “Six Degrees of Separation,” the title of a 1990 play that explored Milgram’s premise. And that gave rise to the parlor game Six Degrees of Kevin Bacon, in which disparate Hollywood personalities are linked to one another. (Elvis Presley was in “Change of Habit” with Edward Asner; Mr. Asner was in “J.F.K.” with Kevin Bacon.)

The Facebook paper, titled “Four Degrees of Separation,” notes that Milgram posed both an optimistic interpretation of his findings and a pessimistic one.

On one hand, it is a startling notion that reaching someone on the other side of the world takes only a small group of social connections. On the other hand, Milgram said, the result could also be evidence of psychological distance: that we were actually, on average, five “worlds apart.”

“From this gloomier perspective,” the new paper says, “it is reassuring to see that our findings show that people are in fact only four worlds apart, and not five.”

Article source: http://feeds.nytimes.com/click.phdo?i=f7fb91ecf1f6a7b1767bfd912d0801a4

Filed Under: Business News Tagged With: , ,