Mergers & Acquisitions

JDS—E-TEK: The world's leading fibre optic equipment maker, JDS Uniphase Corp, extended an aggressive expansion and unveiled plans to take over rival E-TEK Dynamics Inc in an all-stock deal worth roughly $15 billion. Under the agreement, E-TEK holders will get 1.1 shares of JDS for every E-TEK share.

Citigroup—Schroders: Britain's Schroders Plc said that U.S. financial giant Citigroup had agreed to buy its investment banking division for £1.35 billion, bolstering its European foothold.

Ericsson—Emerson Electric: Swedish telecoms group Ericsson said it was selling its energy systems business for $725 million to U.S. Emerson Electric Co in line with plans to focus on mobile and Internet.

Enskilda—Orkla: Swedish SEB bank said its investment banking arm, Enskilda Securities AB, had agreed to merge with Norway's Orkla Finans to create the region's largest investment bank and a big equity player.

F.I.—Druid: British software consultancy F.I. Group said it would buy sectormate Druid Group for £670 million in shares, creating a £2.4 billion ($3.93 billion) group with ambitions to grow abroad.

Boeing—Hughes: Boeing Co on Thursday said it would buy the space and communications business of Hughes Electronics Corp for $3.75 billion, making the aerospace giant a leader in satellite communications.

 

Results

Citigroup: Citigroup, the largest U.S. financial services firm, said net income in the October-December period came to $2.62 billion, a 287 per cent jump over the same quarter of 1998.

J.P. Morgan: J.P. Morgan, fourth quarter net income rose 472 per cent over the same period of 1998 to reach $509 million.

Bank of America: Bank of America said it posted net profits of $1.90 billion in fourth quarter 1999, a 63.8 per cent hike over the same period of 1998.

Motorola: The Schaumburg, Illinois-based maker of computer chips and telecommunications equipment said operating profit excluding one-time items: rose to $514 million, or 82 cents per share, from $159 million, or 26 cents per share, in the year-earlier quarter.

AOL: America Online Inc. said its second-quarter earnings more than doubled. America Online said it earned $224 million, or 9 cents per share, for the quarter ended Dec. 31.

Apple: Cupertino, Calif.-based Apple Computer Inc. said net income rose to $183 million, or $1.03 a share, in its first quarter ended Jan. 1, from $152 million, or 95 cents, a year earlier.

Harley-Davidson: Motorcycle maker Harley-Davidson Inc. reported its fourth quarter profits rose 22.8 percent. Harley-Davidson said net earnings for the fourth quarter ended December 31, 1999 were $74.22 million, compared with $61.03 million.

Boeing: The Boeing Company on Wednesday reported a 42 percent jump in fourth quarter net earnings to 662 million dollars compared with the same period in 1998.

 

ABN rejigs retail service

The Netherlands' largest bank ABN AMRO announced big changes to its retail service provision in the Dutch market to meet competition.

Unveiling its " Focus 2005 " initiative, the bank said it will trim its Dutch branch network to 750 branches from 900 now and cut the Dutch workforce by around 10 per cent or 2,500 jobs.

Philippine data mask slowdown

The Philippines reported a surge in its trade surplus, but economists attributed it to weaker imports and said the figures betrayed a slow economy.

The National Statistics Office said that in November, the trade surplus came in at $721 million compared with a surplus of $213 million a year earlier.

For the 11 months to November, the country notched up a surplus of $4.02 billion compared with a deficit of $624 million for the same 1998 period.

Ringgit peg to remain

Malaysia's economic recovery is on track and the government and central bank said there was no immediate plan to adjust the fixed ringgit it credits for helping bolster exports and fuel growth.

But an IMF representative said good economic times provide an opportunity to move away from the fixed rates, while other analysts said the financial future was not without danger signals.

Hong Kong further opens up telecoms

Hong Kong, further liberalising its telecommunication market granted five licences for fixed line network using wireless technology and 12 licences for external telecom gateways using satellite.

The five local fixed telecommunications network services (FTNS) licencees would all be able to offer high-speed voice and data services and compete with the territory's four existing fixed-line telecoms operators.

The government also issued an FTNS licence to Hong Kong Cable TV a unit of Wharf (Holdings) Ltd. to provide telecommunication services over its hybrid fibre coaxial cable networks.

British drug majors tie knot at last

Glaxo Wellcome Plc and SmithKline Beecham Plc said they would merge to form the world's biggest pharmaceuticals group, but their shares fell as cost savings disappointed.

The two British companies— which tried and failed to merge in 1998—said the deal would give them the scientific and financial clout to be the most efficient drug discovery and marketing machine in the industry.

The market, however, marked down the value of the combined group to under £108 billion by the close of trade from £114 billion on Friday.

The new company, Glaxo SmithKline, will have a market share well ahead of its rivals at 7.3 per cent, combined sales of £15 billion a year and a research budget of £2.4 billion.

It will be headquartered in London but run day-to-day from a new operational base'in the United States.

The merger, which is expected to be completed by mid-year, is structured as an offer by Glaxo for SmithKline with new shares swapped for each SmithKline share, valuing the transaction at around £44.3 billion.

Glaxo shareholders will own 58.75 per cent and SmithKline investors 41.25 per cent of the new group.

Jean-Pierre Garnier, currently number two at SmithKline, takes the key role of chief executive while Glaxo head Richard Sykes will be non-executive chairman.

Glaxo's John Coombe will be finance director and SmithKline's Tadataka Yamada head of research. Robert Ingram, currently Glaxo chief executive, will become chief operating officer and president of pharmaceuticals, while Glaxo R&D head James Niedel is named chief science and technology officer.

World's six leading chip firms in landmark tie-up

The world's six leading semiconductor firms announced a revolutionary alliance in technology development aimed at setting a global standard for nex tgeneration microchips.

The firms which agreed to the landmark tie-up included U.S.based Micron Technology Inc and Intel Corp, Infinion Technologies of Germany, Japan's NEC Corp, and South Korean Samsung Electronics Co and Hyundai Electronics Industries Co.

EU revalues drachma by 3.5pc in ERM

European Union officials revalued the Greek drachma's central rate in Europe's exchange rate mechanism by 3.5 per cent, preparing the way for Greece to join the euro single currency next year.

After a nearly four-hour meeting of senior European finance ministry and central bank officials in Brussels, the EU announced the new central rate of the drachma in the exchange rate mechanism had been set at 340.750 to the euro compared to the old central rate of 353.109.

The drachma closed on Friday at about 331.20 to the euro, well above its theoretical ERM central rate.

"This revaluation of the central rate of the Greek drachma will support the authorities in their efforts to keep the economy on a path of sustainable growth with price stability," an EU statement said.

The drachma's fluctuation band of plus or minus 15 per cent around the central rate was led unchanged.

In Athens, Greek Finance Minister Yannos Papandoniou said the revaluation reflected the "strength and vitality" of the Greek economy.

The long-expected revaluation will allow Greece to slash interest rates in preparation for joining the euro, which it hopes to do in January next year.

The central rate chosen is almost certain to be the same rate at which the drachma is locked to the euro from next year.

The 3.5 per cent revaluation was in the middle of forecasts by analysts who had expected a revaluation in the central rate of between two to five percent.

IDB set to introduce $l.5b fund

The Jeddah-based Islamic Development Bank (IDB) will launch a $1.5 billion fund in the next few months for investment in infrastructure projects of its 53-member countries, an adviser to the fund said.

"In the next few months, probably by early summer, the fund will be functional," Moeen Qureshi, who heads the Washington-based Emerging Markets Partnership, said in Karachi.

Qureshi said the IDB was the principal sponsor of the Bahrain-based IDB Infrastructure Fund while Dar Al-Maal Al-lslami Trust (DMI) would act as the lead sponsor and DMI's investment banking arm, the Bahrain-based Investment Co of the Gulf, would be the adviser of the fund.

U.S. redeeming $4.2b of 30-year bonds

The Treasury Department said on Friday it was redeeming $4.2 billion of U.S. government 30-year bonds before maturity, the first time it has redeemed debt early since 1996.

It was one of a series of related moves by the government to take advantage of mounting budget surpluses and reduced borrowing needs to cut its debt.

On Thursday, the Treasury said in a separate announcement that it would buy back up to $30 billion of debt in the bond market this year.

In Friday's announcement, the Treasury said it would take advantage of its right to repurchase or "call" the debt up to five years early. A Treasury official said that the government can save $800 million in interest payments.

Gates hands over reins to Ballmer

The world's richest man got a new job on Thursday.

Microsoft Corp co-founder Bill Gates handed over the reins of the world's biggest software company to his No. 2, Steve Ballmer who will take over as chief executive officer.

Gates, 44, who has served as Microsoft's chief since its birth 25 years ago, said he was staying on as chairman. He also crowned himself "chief software architect", a new job in which he will map the company's vision for the Internet age.

Nasdaq Europe to be launched

Nasdaq said the European piece in its global stocks puzzle will be slotted into place on time by the first quarter of next year, with initial dealings focused on a clutch of new listings.

Asian counterpart Nasdaq Japan will also start handling live trades at the same time to complete the world's second biggest stock exchange's global ambition.

UK to offer radio Net licences

Some say mobile phones are the future of the Internet, others that it's super-powerful cable, but the British government offered a third way—radio.

Indonesia sets up panel to help IBRA

The Indonesian government has set up a committee in co-operation with the World Bank and the IMF, to help the country's bank restructuring agency (IBRA), a senior minister said.

Co-ordinating Minister for the Economy, Finance and Industry Kwik Kian Gie told a news conferencc that the financial sector policy committee's role will be to help speed up difficult debt restructuring cases.

Malaysia to set up $789m gold refinery

Malaysia will set up its first gold refinery in a venture with a South African firm, which is expected to fetch profits of about 3 billion ringgit ($789.5 million) a year, news reports said on Thursday.

The 46 million ringgit plant will be built in Tanjung Malim town in northern Perak state by the third quarter of this year and will provide jobs for about 1,000 skilled workers.

The joint venture involves the Perak state government, a local firm Quantum Refinery Sdn Bhd and Inochem (Pty) Ltd of South Africa. The agreement for the venture was inked Wednesday in Perak.

The plant will extract gold and other metals such as silver from discarded electroplates and wastes from the electronics industry, as well as take on orders from Asian countries to process gold impurities.

Perak chief minister Tajol Rosli Ghazali said the plant, which can produce about six tons of gold and three tons of silver a month, would lead to increased downstream activities in jewellery production.

Yahoo Japan hits ¥100 mln, record for Japan stock

Internet firms in Japan are feeling like a hundred million yen these days and none more so than Yahoo Japan, whose stocks on Wednesday became the nation's first to spring through that level.

Shares in Japan's most popular search directory were trading at 101.4 million yen ($959,600) in late morning trade, continuing a seven-day rally partly inspired by a planned two-for-one share split unveiled last week.

The move — the firm's third share split in the past year was aimed at feeding investors much-needed liquidity in Japan's core Internet stock, which has staged a stunning 30-fold jump over the past year.