March 24, 2023

DealBook: Heineken Wins Support for $4.6 Billion Bid for Asia Pacific Breweries

Bottles of Tiger and Heineken beers on the shelf of a grocery store in Singapore.Tim Chong/ReutersBottles of Tiger and Heineken beer on the shelf of a grocery store in Singapore.

LONDON – The Dutch brewer Heineken moved a step closer on Wednesday to securing the rights in Asia Pacific Breweries that it does not already own after a major shareholder backed the proposed $4.6 billion deal.

In a reversal to a standoff that has lasted months, the shareholder, Thai Beverage, said it would now support Heineken’s offer. The company had been increasing its stake in Fraser Neave, the Singaporean conglomerate that has a 40 percent holding in Asia Pacific Breweries, raising speculation that the company would scuttle Heineken’s plans.

Shareholders in Fraser Neave, which received a $7.3 billion takeover offer last week from Thai Beverage’s billionaire owner, Charoen Sirivadhanabhakdi, will vote on Heineken’s bid for Asia Pacific Breweries on Sept. 28.

The corporate maneuvering is expected to give Heineken control of the Asian Brewer, whose brands include Tiger beer, while Mr. Charoen is likely to take control of Fraser Neave, which also owns a large global property portfolio and soft drink business.

After months of uncertainty, investors reacted positively to the news. In morning trading in Amsterdam, shares of Heineken rose 6.3 percent. By the end of trading in Asia, stock in Thai Beverage had jumped 13 percent.

By securing control over Asia Pacfic Breweries, which the Dutch brewer operates through a joint venture with Fraser Neave, Heineken will increase its market share in a number of fast-growing emerging markets.

Global beer makers, including Anheuser-Busch InBev, have shifted their focus to developing economies as growth in mature markets continues to suffer because of the current economic crisis.

In the face of opposition from Thai Beverage, Heineken already had increased its offer to buy the 40 percent stake in Asia Pacific Breweries that it did not already own.

The board of Fraser Neave had backed the bid, and the additional support of Mr. Charoen, who already has a 30 percent holding in the Singaporean company, is expected to secure the multibillion-dollar deal for Heineken.

Article source:

Qantas Airways Grounds Fleet in Labor Dispute

The grounding, preceded by months of tension between the airline and its workers, led to the immediate cancellation of hundreds of flights, the airline said, forcing Prime Minister Julia Gillard’s beleaguered government to try to end the standoff. An emergency meeting of the national workplace relations tribunal worked through the night before adjourning on Sunday morning without a resolution. The panel said it would resume discussions later in the day.

Passengers were being rebooked on other airlines at the airline’s expense, Qantas said. But that was little comfort to stranded travelers, many of whom focused their anger at the airline and its chief executive, Alan Joyce.

“I’m definitely never flying Qantas again,” one passenger, Samantha Palmer, told the Australian Broadcasting Corporation.

A series of labor disputes has hit the airline, the world’s 10th largest, as employees have voiced concern about jobs being moved out of Australia. Qantas has been forced to reduce and reschedule flights for weeks because of the actions, which have included strikes and refusal to work overtime.

Mr. Joyce said the airline’s fleet of 108 aircraft in up to 22 countries would remain grounded until Qantas reached an agreement over pay and work conditions with the unions representing pilots, mechanics and ground staff. Qantas employs about 35,000 people.

A spokesman for the Australian Workers’ Union, one of the country’s oldest and largest unions, with more than 135,000 members, criticized the airline’s decision to ground its fleet without notice. “Words can’t express our anger at the unilateral decision Qantas management has taken — as well as the impact it will have on all Qantas workers and the thousands of travelers now left stranded in Australia and around the world,” the national secretary of the group, Paul Howes, said.

“Unions rightly give 72 hours’ notice before industrial action, but Qantas management has given no notice before this wildcat grounding of their fleet,” he said in a statement on the union Web site.

The airline said that beginning Monday it would lock out all employees involved in the dispute, including pilots and engineers, among others. The grounding of the fleet will cost the airline an estimated $21 million a day. Qantas said it had already been losing $16 million a week in revenue as a result of the job actions.

Barry Jackson of the Australian and International Pilots Association told Sky News that Qantas had “hijacked the nation.” Mr. Jackson added, “It’s forcing the government’s hand on this.”

The Australian Foreign Ministry was adding emergency staff in Canberra, the capital, to help Australians who were stranded.

The leader of Australia’s political opposition, Tony Abbott, suggested that Ms. Gillard’s Labor government was too close to the unions involved and was putting the country’s prestige at risk.

“There’s going to be massive public inconvenience, there’s going to be massive disruption to business and there’s going to be a very big hit on Australia’s international reputation because Qantas really is around the world, to a considerable extent, the face and the symbol of Australia,” he said in televised remarks.

Qantas has several flights a day from Sydney to Kennedy Airport in New York, and to Los Angeles, Dallas-Fort Worth and Honolulu.

Near-empty airports and angry customers became a staple of Australian television on Saturday night, as travelers took to social networking sites like Twitter to vent their frustration.

“Plane door was closed then they announced we were not going,” Christine Walker, a Qantas passenger in Los Angeles, wrote on Twitter in response to a question about her flight.

Matt Siegel reported from Sydney, and Kevin Drew from Hong Kong.

Article source:

Debt Bill Becomes Law, Averting Default

The Senate passed the bill, 74 to 26, earlier on Tuesday after a short debate devoid of the oratorical passion that had echoed through both chambers of Congress for weeks.

A few minutes after the vote, President Obama excoriated his Republican opposition for what he called a manufactured crisis that could have been avoided. “Voters may have chosen divided government,” he said, “but they sure didn’t vote for dysfunctional government.”

The compromise, which the House passed on Monday, has been decried by Democrats as being tilted too heavily toward the priorities of Republicans, mainly because it does not raise any new taxes as it reduces budget deficits by at least $2.1 trillion in the next 10 years. But it attracted many of their votes, if only because the many months of standoff had brought the country perilously close to default. And rather than soothing already nervous markets, the final passage sent stocks lower.

The wrangling also laid bare divisions within both parties, in the House where scores of the most conservative Republicans and most liberal Democrats refused to vote for the bill, and again in the Senate where senators such as Kelly Ayotte of New Hampshire and Mike Lee of Utah, both Republican freshmen blessed by the Tea Party, also voted against it. The last to vote was Senator Olympia J. Snowe of Maine, who conferred for several minutes with Senator Jon Kyl of Arizona, her face twisted in a grimace, then voted yes, as he had done. Ms. Snowe, a moderate Republican who faces re-election next year, is already a target of Tea Party activists in her state.

In a chamber where a Democratic majority was essentially bending to the will of a Republican minority, and where 60 votes were needed under the rules, 28 Republicans voted against the bill but only 6 Democrats voted against it. (One independent went each way.) In contrast, in the House, mostly the Republicans voted yes and about half the Democrats voted no.

Senator Mitch McConnell of Kentucky, the minority leader, who played a central role in the ultimate compromise, said his party’s goal was “to get as much spending cuts as we could from a government we didn’t control.”

“It may have been messy,” he said. “It may have appeared to some that their government wasn’t working, but in fact the opposite was true.” Legislating, he added, “was never meant to be pretty.”

He and Senator Harry Reid of Nevada, the majority leader, had a gentle toe-to-toe as the debate ended, praising each other’s performance while denouncing each other on the substance.

“It’s never, ever personal,” Mr. McConnell said.

Mr. Reid presaged the next battle, when an appointed Congressional committee is to seek new ways to cut the deficit, by rejecting the assertions of his Republican colleagues that the next phase would again exclude revenue increases, which the Democrats failed to include in the first round. “That’s not going to happen,” Mr. Reid said.

Mr. Obama, too, called for the ultimate solution to include new revenues, including raising taxes on the wealthiest Americans and closing corporate loopholes, saying that he would fight for that approach as the Congressional commission considers what to recommend to Congress for an up-or-down vote before the end of the year, as the new law requires.

Enactment of the legislation signals a pronounced shift in fiscal policy, from the heavy spending on economic stimulus and warfare of the past few years to a regime of steep spending cuts aimed at reducing the deficits — so far, without new revenues sought by the White House.

“Make no mistake, this is a change in behavior from spend, spend, spend to cut, cut, cut,” said Senator Lamar Alexander, Republican of Tennessee, as the debate began on the Senate floor.

But the fight, which is only half over until a second round of deficit reduction is completed over the next five or six months, also exposed deep ideological schisms between and within the political parties, and tarnished the images of Congress and the president alike.

And the fight left many lawmakers on both sides deeply uneasy — including Senator Richard J. Durbin, Democrat of Illinois and the assistant majority leader, who said he had consulted with the Senate chaplain over his vote, because “from where I stand it is not the clearest moral choice.” Liberal critics say the plan will hurt an already limping economy. Mr. Obama signed the law privately, away from the cameras.

Despite the tension and uncertainty that has surrounded efforts to raise the debt ceiling, the House vote of 269 to 161 was relatively strong in support of the plan. Scores of Democrats initially held back from voting, to force Republicans to register their positions first. Then, as the time for voting wound down, Representative Gabrielle Giffords, Democrat of Arizona, returned to the floor for the first time since being shot in January and voted for the bill to jubilant applause and embraces from her colleagues. It provided an unexpected, unifying ending to a fierce standoff in the House.

Although the actual spending cuts in the next year or two would be relatively modest in the context of a $3.7 trillion federal budget, they would represent the beginning of a new era of restraint at a time when unemployment remains above 9 percent, growth is slowing and there are few good policy options for giving the economy a stimulative kick.

Republicans and Democrats alike made clear they were not happy with the agreement, which was struck late Sunday between the leadership of Congress and Mr. Obama.

Despite such misgivings, members of both parties welcomed the end of the debt-limit clash after months of intrigue, partisan rancor and stop-and-go negotiations that ultimately left Congress voting just hours before a deadline to avoid default.

“On to the next fight,” said Senator John Cornyn, Republican of Texas.

Article source:

F.A.A. Faces a Shutdown After Talks Fall Apart

WASHINGTON (AP) — Efforts to avert a shutdown of the Federal Aviation Administration failed on Friday amid a disagreement over a $16.5 million cut in subsidies to 13 rural communities, meaning that at midnight nearly 4,000 people were to be temporarily out of work and federal airline ticket taxes suspended.

Lawmakers were unable to resolve a partisan dispute over an extension of the agency’s operating authority, which was to expire at midnight Friday.

The subsidy cut was included by Republicans in a House bill extending operating authority for the F.A.A., which has a $16 billion budget. Senate Democrats refused to accept the House bill with the cuts, and Republican senators refused to accept a Democratic bill without them. Lawmakers then adjourned for the weekend.

Underlying the dispute on rural air service subsidies was a standoff between the Republican-controlled House and the Democratic-controlled Senate over a provision in long-term funding legislation that would make it more difficult for airline and railroad workers to unionize.

Obama administration officials have said the shutdown will not affect air safety. Air traffic controllers will remain on the job. But airlines will lose the authority to collect about $200 million a week in ticket taxes that go into a trust fund for F.A.A. programs.

F.A.A. employees whose jobs are paid for with trust fund money will be furloughed, including nearly 1,000 workers at the agency’s headquarters in Washington, 647 workers at the F.A.A.’s technology and research center in Atlantic City and 124 workers at the agency’s training center in Oklahoma City.

Airline passengers could save money on their airfares, but the situation is complicated. Federal taxes on a $300 round-trip ticket are about $61, according to the Air Transport Association.

Airlines, alerted earlier this week that F.A.A. authority could expire, have been making adjustments to their computer systems and Web sites so that at midnight, taxes were to be no longer added to airfares, the association said.

One airline, US Airways, was already raising fares. Other airlines may try to reap a windfall profit from the tax holiday.

Passengers who bought their tickets before the shutdown, but who travel during the shutdown, may be due a refund, said Sandra Salstrom, a Treasury Department spokeswoman. That is because it is not clear whether the government can keep taxes for travel that takes place during a period when the government does not have authority to collect taxes, she said.

Article source: