Business this week
Sep 7th 2013 |From the print edition
It was a big week for the mobile-phone industry, with the announcement of two long-mooted deals. In the first, and after years of talks, Verizon agreed to buy the 45% stake held by Vodafone in Verizon Wireless, the pair’s joint venture in America, for $130 billion. It is the third-biggest business transaction yet seen (behind Vodafone’s own purchase of Mannesmann and the merger of AOL and Time Warner) and will reap $5 billion for the American taxman. Vodafone’s investors will also benefit, from an $84 billion payout in cash and shares.
Nokia surges, Microsoft drops
In the second big deal of the week Microsoft beefed up its business in mobile devices and services by agreeing to pay euro 3.8 billion ($5 billion) for Nokia’s handset division, which makes smartphones based on Windows. Nokia had tried various turnaround plans to tackle its shrivelling market share. It will still exist, focusing on networks and mapping, but 32,000 of its staff now work for Microsoft, including Stephen Elop, who was its chief executive. He is now a candidate to replace Steve Ballmer when he steps down as Microsoft’s boss.
Samsung unveiled its first smartwatch, the Galaxy Gear, beating Apple in bringing the first significant wearable device to market. The watch will cost $300 and can only link to Galaxy phones and tablets; other new smartwatches will work with lots of Android products. It is still unclear how much demand there is from consumers for the gadgets.
三星发布了其第一款智能手表the Galaxy Gear，击败苹果上市了第一款重要的可穿戴设备
LinkedIn said it would issue new stock in a secondary offering, through which it should raise $1 billion. The social network for professionals has seen its share price rise by 200% since its IPO in 2011.
Who owns the programmes?
Time Warner Cable ended its blackout of CBS channels in several American cities, including New York, after the two sides resolved a dispute over rights. Like other broadcast networks CBS is keen to retain the ability to develop business in the future with blossoming internet-streaming services, such as Netflix, over the heads of the longer-established cable providers.
The European Commission turned its sights on money-market funds, with proposals that would require funds guaranteeing a stable share-price to build up capital buffers. American regulators are also eyeing similar restrictions.
Standard & Poor’s upped the ante in its legal fight with the American government when it asserted that it is being sued in “retaliation” for exercising its right to “free speech” in downgrading America’s AAA credit rating. S&P made the claim in court papers it filed defending itself against the lawsuit, which alleges that S&P gave sound ratings to bad mortgage products to keep its clients in the banking industry happy.
Bank of America decided to sell its remaining 1% stake in China Construction Bank, which should fetch around $1.5 billion. Many big American banks bought stakes in Chinese state banks several years ago, and have been cashing in their lucrative holdings. BofA paid $3 billion for an initial 10% stake in CCB.
The OECD revised its growth forecasts to reflect a moderately better outlook in rich countries and the “widespread loss of momentum” in emerging markets. It now expects output in America, Japan and Germany to expand by 2.5% at an annualised rate in the third and fourth quarters. Britain’s GDP is projected to grow by 1.5% this year, 0.7 percentage points higher than the OECD’s previous estimate.
The latest raft of purchasing-manager surveys suggested that manufacturing in America and the euro zone is growing at the fastest pace in over two years. Britain’s services industry, meanwhile, grew at the quickest rate in six years.
Ryanair’s share price fell sharply after it issued a surprise profit warning amid a price-cutting war among Europe’s budget airlines. The carrier said sales were weak during the summer and bookings are down for this autumn.
The sweet smell of success
Yankee Candle, which is based in Massachusetts, was bought by Jarden, a consumer-products company that owns a wide range of brands in a $1.8 billion deal. The firm started in 1969 when its teenage founder made a Christmas gift for his mother. According to its “Learning Scentre”, it now produces 200m aromatic candles a year and is expanding in Europe.
The annual Global Competitiveness index placed Switzerland in the top spot for the fifth consecutive year, followed by Singapore, Finland and Germany. America reversed a four-year decline to climb to fifth place and Britain fell to tenth. Among the BRICs, China came in at 29th, Brazil at 56th, India at 60th and Russia 64th. Greece was 91st, behind Iran and Moldova, but ahead of Serbia and Libya.