March 29, 2024

DealBook: Glencore Wins European Approval for Xstrata Deal

Copper cathodes at the Yangshan Deep Water port near Shanghai. Xstrata is one of the world's biggest miners of copper.Carlos Barria/ReutersCopper cathodes at the Yangshan Deep Water port near Shanghai. Xstrata is one of the world’s biggest miners of copper.

LONDON — Glencore International gained European regulatory approval on Thursday for its $32 billion takeover of the mining company Xstrata, after agreeing to sell assets and reduce its operations in Europe to satisfy antitrust concerns.

On Tuesday, Xstrata’s shareholders voted to back the multibillion-dollar takeover, which will create a mining giant with a market capitalization of around $80 billion.

The shareholders, however, rejected plans to give around 70 of Xstrata’s top executives bonuses worth a combined $220 million. The failure to secure the payouts, which had been supported by Xstrata’s board, led the company’s chairman, John Bond, to say he would resign upon completion of the deal.

Antitrust authorities had raised concerns that the takeover would reduce competition in a number of commodity sectors.

On Thursday, the European Union ordered Glencore to sell its 8 percent stake in Nyrstar, the world’s largest zinc producer. In an effort to increase competition in the European zinc market, Glencore also must end an agreement with Nyrstar to sell the company’s zinc.

By ending its sales agreement with Nyrstar, Glencore will cut its share of the European zinc market from 50 percent to about 40 percent. Without the concessions, the European Union said, the combined Glencore-Xstrata would have had an incentive to raise zinc prices across the Continent.

“The proposed remedy ensures that competition in the European zinc metal market is preserved,” the European competition commissioner, Joaquín Almunia, said in a statement on Thursday.

Glencore said on Thursday that it had noted the European Union’s approval of the proposed Xstrata deal.

Shares in Glencore rose 3 percent in afternoon trading in London on Thursday, while shares in Xstrata increased 3.1 percent.

The takeover, which has taken more than nine months of sometimes tortured negotiations, is now expected to close early next year, according to people with direct knowledge of the matter, who spoke on the condition of anonymity because they were not authorized to speak publicly.

South African and Chinese antitrust authorities still must approve the deal.

The combination, which initially was opposed by several of Xstrata’s leading investors, including the sovereign wealth fund Qatar Holding, comes at a difficult time for the mining industry. A slowdown in fast-growing emerging economies like China and India has hit commodity prices.

The Glencore-Xstrata deal may also lead to a new round of consolidation in the sector, as companies adjust to the economic reality of lower prices and a decline in demand.

Article source: http://dealbook.nytimes.com/2012/11/22/glencore-wins-antitrust-approval-for-xstrata-deal/?partner=rss&emc=rss

DealBook: Julius Baer to Buy Stake in Italian Money Manager

The headquarters of Julius Baer in Zurich.Michael Buholzer/ReutersThe headquarters of Julius Baer in Zurich.

LONDON – The Swiss bank Julius Baer agreed on Monday to buy about 20 percent of the Italian money manager Kairos Investment Management for an undisclosed amount.

The deal comes a month after Julius Baer announced about 1,000 job cuts after its deal with Bank of America Merrill Lynch to buy that bank’s private banking operations outside the United States and Japan for around $880 million.

Under the terms of the deal with Kairos, Julius Baer will acquire a 19.9 percent stake in the firm, which has about 4.5 billion euros ($5.7 billion) of assets under management. Julius Baer currently manages assets worth 184 billion Swiss francs ($194 billion).

Julius Baer said its private client business in Italy would be combined with Kairos’s existing business, adding that the two firms would set up a new private bank in Italy after receiving regulatory approval for the deal.

The combined wealth management division in Italy will be operated under the name Kairos Julius Baer, according to a company statement.

“Thanks to our strategic participation, we will increase our presence in the domestic Italian wealth management market,” Julius Baer’s chief executive, Boris F.J. Collardi, said in a statement. “This move underlines our commitment to further grow and develop our business in Italy.”

The two firms said they would decide after a few years whether Julius Baer would increase its stake in Kairos, according to a statement from Julius Baer.

Shares in Julius Baer rose less than 1 percent in morning trading in Zurich on Monday.

The deal is expected to close during the first half of 2013.

Article source: http://dealbook.nytimes.com/2012/11/12/julius-baer-to-buy-stake-in-italian-money-manager/?partner=rss&emc=rss

DealBook: Peugeot in Talks to Sell Gefco to Russian Railways

A Citroen C3 is assembled at PSA Peugeot Citroën's plant in Poissy, France.Benoit Tessier/ReutersA Citroen C3 is assembled at PSA Peugeot Citroën’s plant in Poissy, France.

PARIS — The French automaker PSA Peugeot Citroën said Thursday that it was negotiating to sell its Gefco logistics business to J.S.C. Russian Railways as it struggles to stay afloat in the faltering European car market.

PSA Peugeot Citroën, the second-largest automaker in Europe after Volkswagen, has entered exclusive negotiations to sell 75 percent of Gefco for 800 million euros, or about $1 billion. If the deal is completed, Gefco would also pay Peugeot a special dividend of 100 million euros.

The French automaker is reeling from its heavy exposure to the European market and its dependence on relatively low-margin models. New passenger car registrations were down 7.1 percent this year in Europe. With the euro zone in recession and the future of the currency itself uncertain, analysts were not predicting a quick turnaround.

A Finance Ministry report commissioned by President François Hollande this month found that Peugeot needed to move quickly to close a French factory and cut thousands of jobs. In a country where mass layoffs are discouraged, it was an indication of the gravity of the situation.

Fitch Ratings cut its rating on Peugeot on Wednesday, saying that it expected the company to burn cash through 2014 and that it was concerned about the carmaker’s ability to compete in the market for small and medium-size cars. Fitch said it was unlikely that “the ongoing fierce competition and substantial price pressure” will abate in the near term.

Peugeot said the deal, which is contingent on regulatory approval, would help Gefco to grow in China, India, Latin America, as well as in Eastern and Central Europe, and particularly Russia.

Earlier this year, Gefco, which had sales of 3.8 billion euros in 2011 (about $4.9 billion), signed an exclusive long-term contract with Peugeot’s automotive division. In late June, it reached a similar deal with General Motors Europe to supply factories in Poland, Spain, Britain, Germany and Russia and annually ship 1.2 million finished vehicles around the world.

For the Russians, the acquisition is a foothold in Europe that is important strategically despite the weakness in the economy that is troubling Peugeot. J.S.C. Russian Railways, known as RZD, wants to develop an overland freight service between Asia and Europe for cargo that now travels a more circuitous journey by water.

“Russian Railways can offer competitive transportation services along this route after undertaking a significant amount of work recently,” RZD said in a statement about the talks with Peugeot. “The next logical step is to develop a sales network for transit transcontinental transportation services via an international logistics company.”

Article source: http://dealbook.nytimes.com/2012/09/20/peugeot-in-talks-to-sell-logistics-business/?partner=rss&emc=rss

DealBook: NYSE and Deutsche Borse Offer New Deal Concessions

9:11 a.m. | Updated

LONDON — NYSE Euronext and Deutsche Börse have submitted new concessions to the European authorities as the exchanges attempt to gain approval for their proposed $9 billion merger.

The move comes as the European Commission and a local German regulator have raised concerns about the deal, which would give the two companies a dominant position in the exchange-traded derivatives market.

To allay these concerns, the companies said on Tuesday that they had agreed to divest more of their equity derivatives trading operations, as well as provide the new owner access to Eurex Clearing, a clearinghouse for derivatives products.

The concessions include the disposal of all of NYSE Euronext’s single-stock derivatives businesses in Europe, according to a person with knowledge of the matter.

If local regulatory approval isn’t given for divestments in individual European countries, the companies would look to dispose of Deutsche Börse’s complementary operations in those countries, the person added.

NYSE Euronext, the parent of the New York Stock Exchange, and Deutsche Börse also said they would license Eurex’s trading system to third parties looking to offer interest-rate derivatives.

The firms said the European authorities were now expected to make a decision on the merger by February; the previous deadline was January.

“The revisions are designed to reflect the European Commission’s feedback on the initial proposal, and thereby fully address the commission’s remaining concerns while preserving the industrial and economic logic of the merger,” the companies said in a statement.

The new concessions echo a similar move in November when NYSE Euronext said it would sell its pan-European single-equity derivatives units, but not the options businesses in its home markets. Deutsche Börse said it would divest similar operations. The companies had also agreed to give rivals access to Eurex Clearing to offset regulatory concerns that the pending merger would lead to uncompetitive practices.

The European authorities are concerned the merger would give the companies a dominant position in the exchange-traded derivatives market, where the firms’ operations represent up to 90 percent of trading activity in certain contracts.

NYSE Euronext and Deutsche Börse are adamant that the proposed merger does not break antitrust rules. They cite competition from the so-called over-the-counter market, dominated by many of the world’s largest investment banks, which still represents the majority of derivatives trades in Europe.

Under new global regulatory proposals, these opaque deals are being required to use clearinghouses — financial intermediaries that guarantee trades if one side defaults — and to trade on exchanges.

William Rhone, a senior analyst at financial consulting firm TABB Group in New York, said the over-the-counter derivatives market, not the exchange-traded sector, was where antitrust regulators should be focusing their attention.

“The NYSE Euronext and Deutsche Börse is an attractive proposition that will allow them to compete with the oligopoly of the O.T.C. dealers,” Mr. Rhone said. “It’s that market, not the exchanges, where the debate about competition should be.”

Last week, Deutsche Börse’s chief financial officer, Gregor Pottmeyer, said the deal could be in jeopardy if antitrust regulators demanded more concessions.

“We want to pursue the transaction, but not at all costs,” Mr. Pottmeyer said. “Antitrust conditions should not be allowed to endanger the industry and economic logic of this transformational merger.”

Along with antitrust concerns, a local German regulator has also questioned how the deal would affect the companies’ future operations in Frankfurt, where Deutsche Börse is based. On Monday, the Hessian Ministry of Economy, the local regulator for the Frankfurt Stock Exchange, called for changes to the merger to protect trading activity in Frankfurt.

“We have communicated suggestions about how our concerns could be remedied,” said Wolfgang Harmz, a ministry spokesman.

Article source: http://feeds.nytimes.com/click.phdo?i=f0ae09ed56417495a1c792f858fc6e60

DealBook: Deutsche Börse Wins Shareholder Approval of NYSE Euronext Deal

The Frankfurt Stock Exchange in Germany is operated by Deutsche Börse.Alex Domanski/ReutersThe Frankfurt Stock Exchange in Germany is operated by Deutsche Börse.

Deutsche Börse said on Thursday that it had won enough shareholder support to clinch its $9 billion merger with NYSE Euronext, after collecting more than 80 percent of its outstanding shares in a tender offer.

Under German market rules, Deutsche Börse needed to receive at least 75 percent of its stock by midnight on Wednesday for the deal to pass.

The final tally will not be available until later on Thursday or Friday.

With the success of the tender offer, Deutsche Börse and NYSE Euronext have cleared one of the biggest hurdles to their merger, which would create a new international stock market operator with big presences in stock, options and derivatives trading.

Yet the two exchanges must still obtain regulatory approval, a lengthy process that is not expected to conclude until next year. Both companies’ legal teams have been working closely with European antitrust officials, who are expected to closely scrutinize the deal because the merger would meld two of the Continent’s biggest derivatives platforms.

Over the last week, Deutsche Börse and NYSE Euronext spoke frequently with the German market operator’s investors, urging them to back the offer. As recently as July 7, Deutsche Börse had collected just 11.1 percent of its outstanding shares.

Both exchange companies had said that they expected investors to tender their holdings close to the deadline. Some shareholders had waited until NYSE Euronext shareholders approved the deal, which they did last week.

Shares of Deutsche Börse fell less than 1 percent on Thursday, to 52.83 euros. Shares of NYSE Euronext were roughly flat at $33.82.

Article source: http://feeds.nytimes.com/click.phdo?i=0bd0c38b64cc5ecbaccd9948f61a8a36

Lawmakers to Call Murdoch to Testify in Hacking Case

LONDON — Rupert Murdoch’s once-commanding influence in British politics seemed to dwindle to a new low on Tuesday, when all three major parties in Parliament joined in support of a sharp rebuke to his ambitions and a parliamentary committee said it would call him, along with two other top executives, to testify publicly next week about the growing scandal enveloping his media empire.

Mr. Murdoch has been struggling to complete a huge, contentious takeover deal that still needs regulatory approval, the $12 billion acquisition of the shares in British Sky Broadcasting that his company does not already own. In an effort to save that deal from the scandal’s fallout, Mr. Murdoch has already shut down the tabloid at the heart of the scandal, The News of the World. But the accusations have spread to other papers in his News International group, and have taken in an ever wider and more outrage-provoking list of victims.

The House of Commons is scheduled to vote on Wednesday on a motion declaring that “it is in the public interest for Rupert Murdoch and News Corporation to withdraw their bid for BSkyB,” a motion pushed by the opposition Labour Party that the governing Conservatives decided on Tuesday to support. The Conservatives’ coalition partners, the Liberal Democrats, have been vocal in their condemnation of Mr. Murdoch and his executives. With the three parties holding more than 600 of the 650 seats in the house, the motion is expected to be approved overwhelmingly.

Though it would have little direct effect, the motion represents a powerful political headwind blowing against the deal and against Mr. Murdoch, a figure so powerful in Britain that until the current scandal, politicians and others in public life have rarely risked invoking his ire. And it threatened to undercut a last-ditch step that the News Corporation took on Monday, when it withdrew promises it had made to satisfy antitrust concerns about the deal, most notably that Sky News, the target company’s 24-hour news channel, would be spun off.

Before the scandal flared up, the Conservative government had shown readiness to waive a formal antitrust review of the deal, based on those promises. A regulatory review would now not just delay the deal for months, but may kill it.

A parliamentary committee said Tuesday that it would call Mr. Murdoch, his son James and Rebekah Brooks, the chief executive of News International, to testify next week about accusations of phone hacking and corruption at the News International papers. John Whittingdale, chairman of the Culture, Media and Sport Committee, said it would seek to determine “how high up the chain” knowledge of the newsroom malpractices in the Murdoch newspapers went.

New and alarming charges came on Tuesday from the former prime minister Gordon Brown, who said that one of the most prestigious newspapers in the group, The Sunday Times, employed “known criminals” to gather personal information on his bank account, legal files and tax affairs.

Those charges centered on suggestions that The Sunday Times and The Sun, a Murdoch tabloid, used subterfuge to learn in 2006 that Mr. Brown’s infant son, Fraser, had cystic fibrosis, a fact that generated a Sun scoop.

The two papers responded with statements denying wrongdoing. The Sun said it had not accessed the child’s medical records and did not “commission anyone to do so.” Instead, it said, the article originated “from a member of the public whose family has also experienced cystic fibrosis.”

“He came to The Sun with this information voluntarily, because he wanted to highlight the cause of those afflicted by the disease,” the newspaper said.

The Sunday Times said it had “pursued the story in the public interest” and had followed Britain’s press code “on using subterfuge.” “No law was broken in the process of this investigation,” it said.

A separate parliamentary committee investigating years of indecisive police investigations into The News of the World’s rampant phone-hacking operations spent hours on Tuesday grilling police officers who led the inquiries.

John F. Burns and Don Van Natta Jr. reported from London, and Alan Cowell from Paris. Reporting was contributed by Jo Becker, Ravi Somaiya, and Graham Bowley from London, and J. David Goodman from New York.

Article source: http://www.nytimes.com/2011/07/13/world/europe/13hacking.html?partner=rss&emc=rss

U.S. to Sell Its Chrysler Stake to Fiat

President Obama plans to announce the deal during a visit to a Chrysler plant in Toledo, Ohio, on Friday.

“As Treasury exits its investment in Chrysler, it’s clear that President Obama’s decision to stand behind and restructure this company was the right one,” the Treasury secretary, Timothy F. Geithner, said in a statement. “Today, America’s automakers are mounting one of the most improbable turnarounds in recent history — creating new jobs and making new investments in communities across our country.”

The deal on Thursday and Fiat’s purchase last week of 16 percent of Chrysler for $1.3 billion, value Chrysler at a little more than $8 billion. The Treasury owns 6 percent of Chrysler, on a fully diluted basis.

Chrysler last week also repaid the $7.5 billion it owed to the United States and Canada.

The sale of Treasury’s stake is subject to regulatory approval and expected to close in one to three months, said two people with direct knowledge of the transaction’s details but who were not authorized to speak publicly about the matter. It will give Fiat majority ownership of Chrysler, which emerged from bankruptcy protection a little more than two years ago.

In addition to buying Treasury’s shares, Fiat also agreed to buy options held by the American and Canadian governments to purchase Chrysler shares held by a United Automobile Workers union trust fund for $5 billion. Treasury will receive $60 million for the options, and $15 million will go to Canada.

The governments were not interested in buying more shares of Chrysler, according to the people who spoke on condition of anonymity. Fiat would then be able to acquire the vast majority of Chrysler outside of an initial public offering.

After the deal closes, Chrysler will have repaid $11.2 billion of the $12.5 billion it received from Treasury in 2008 and 2009 to prevent its collapse.

A report by the White House National Economic Council this week projected that the government will fail to recoup about $14 billion of the $80 billion it put into rescuing the auto industry.

Article source: http://feeds.nytimes.com/click.phdo?i=d1b32f54de400067949ed79a304f88ad