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Wednesday, 14 August 2024
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European Business News (EBN), 97-06-11European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated Wed, June 11 7:13 PM CETCONTENTS
[01] Murdoch forms alliance with PrimestarRupert Murdoch has finally found a new partner in the satellite TV business: Primestar.Murdoch's News Corp. has agreed to fold its nascent satellite operation, ASkyB, into Primestar as part of restructuring of the satellite partnership into a publicly traded company. The deal ends considerable speculation about both Murdoch's satellite business and Primestar, which has 1.8 million subscribers. In exchange for the satellites, News Corp. and MCI will receive a non- voting stake in PrimeStar Inc. They will get non-voting convertible securities with a liquidation value of about $1.1 billion, PrimeStar said in a press release. The deal follows News Corp's failed efforts to join forces with EchoStar Communications Corp. Their proposed $1 billion deal has dissolved into a morass of litigation. 'I couldn't quite say this is a replacement, but because that (Echo) deal didn't work out, this is the next one we're doing,' News Corp. spokesman Jim Platt said. 'This is a way for us to recoup our investment in the satellites.' Primestar said under the restructuring, the new company will be formed from the partnership interests and the 1.8 million direct broadcast satellite suscribers of its partners: TCI Satellite Entertainment, Time Warner/Newhouse, Cox Communications, Comcast, MediaOne of US West Media Group, and General Electric GE American Communications Inc. The company said TCI stokholders will have a 37% stake in the new company, Time Warner/Newhouse a 30% stake, MediaOne a 10% stake, Cox a 9% stake, Comcast a 10% stake and GE American a 4% stake. Primestar said its partners have signed binding agreements committing to the restructuring. Primestar said under the new structure its current distributor structure will be replaced by an agency relationship, and will combine a group of disparate local business units into a cohesive national company. The company named Primestar Partners Chairman and Chief Executive James L. Gray as chairman and chief executive of Primestar Inc. until transition to the new company is completed. Primestar named the president of Time Warner Satellite Services Inc., Daniel J. O' Brien, president and chief operating officer of the new company. [02] Santer reassures European parliament over French stability pact concernsEuropean Union Commission President Jacques Santer told the European Parliament that it is 'perfectly possible' to accommodate French concerns with the planned stability pact.'Without questioning the substance of the stability pact, it is perfectly possible to put more emphasis on employment in order to overcome the concerns of one member state' raised at Monday's E.U. finance minister's meeting, he says. He added that the French concern was shared by the E.U. Commission. Santer reiterated that he is optimistic that full agreement on the growth and stability pact will be reached in Amsterdam. Santer argued that an 'ambitious monetary policy doesn't have any sense unless it's accompanied by a strong employment policy.' Santer added that the stability pact is also a growth pact, and therefore already has a link with job creation. Now that the monetary aspects of the plan are already defined, Santer said the employment aspect will come via closer economic policy coordination that is an integral part of the single currency plan. The Maastricht Treaty already provides for this type of coordination, he noted. [03] Kinkel says the EU must approve the 'Maastricht II Treaty' at the Amsterdam SummitGerman Foreign Minister Klaus Kinkel said that the European Union must approve the so-called Maastricht II Treaty at the summit meeting of European heads of government in Amsterdam next week, and is confident that it will do so.'The Amsterdam meeting on Monday next must bring approval of the European Union Treaty,' Kinkel said. 'We're going into the final negotiations confidently,' he said, adding that 'the European Council in Amsterdam will bring the intergovernmental conference to a conclusion.' The intergovernmental conference, often referred to as Maastricht II, deals with institutional and political reforms within the E.U. to prepare it for expansion eastward and to make it more responsive to the concerns of E.U. citizens. Kinkel noted that the Dutch government, which currently holds the presidency of the European Union, will present its IGC bill to the German government tomorrow. 'To our current knowledge, it's a good, ambitious text, deserving of our support,' Kinkel said. He added that the conditions are good for a successful conclusion to the IGC in Amsterdam. 'Britain is showing more European openness,' he said. 'We're currently conducting intensive talks with the new British government on those points which are giving it the most difficulty.' He also said the new socialist majority-led French government needs time to work out the details of its position on such issues as the IGC, given that it has only been in power 'for a few days,' but said he was confident of an agreement with the French in Amsterdam, and also of France's committment to currency union. 'The new government in Paris is staying on course' for currency union, he said. 'It's sticking to the stability pact - it, like the German government, wants a punctual start to the euro - according to the timetable, and with adherence to the criteria.' Meanwhile, Germany's main government opposition, the Social Democratic Party, called for German Chancellor Helmut Kohl to publicly deny a newspaper report saying the government was considering a delay to Europe's planned single currency. SPD spokeswoman on European affairs Heidemarie Wieczorek-Zeul challenged Kohl to 'officially confirm he plans to stick to his conviction to have currency union start on time and deny newspaper reports that the coalition is planning otherwise.' [04] PacifiCorp said to be close to paying $6 billion for Energy Group of the UKPacifiCorp, a Portland, Oregon, utility, is near an agreement to acquire Energy Group of Britain for $6 billion in cash, a combination that would create an instant international powerhouse with substantial energy assets in the U.S., Britain and Australia, persons close to the discussions told the Wall Street Journal.The negotiations could place PacifiCorp in control of a combined company with $10.4 billion in total annual revenue, matching Southern Co. as the largest U.S. utility. The proposed entity would control huge electric- generating, coal, natural-gas and power-trading operations - serving a base of more than five million customers on three continents. In addition to the $6 billion contemplated for the proposed deal, PacifiCorp is prepared to raise as much as an additional $3.8 billion to eliminate Energy Group's debt and certain lease obligations, one person close to the talks said. PacifiCorp also is considering certain asset sales. PacifiCorp's directors held a special board meeting Tuesday in Portland to evaluate its elaborate acquisition plan. If the talks succeed, the $9.8 billion package now being hammered out would be the largest cash-financed consolidation in U.S. utility history. The board 'is very close' to wrapping up the details, and an agreement could be announced as early as Friday or Monday, this person said. Energy Group officials, negotiating to obtain a 20% premium over the current stock price, said any deal also would probably turn out to be the largest utility buyout in the United Kingdom. [05] Japan's trade surplus nearly doubles, placing strain on Washington- Tokyo relationsThe broadest measure of Japan's trade surplus nearly doubled in April, raising concerns that trade frictions between Tokyo and Washington may flare up again.Japan's surplus in its current account jumped 92.7% to 1.092 trillion yen ($ 9.75 billion) in April compared with the same month a year. It was the second straight month of year-on-year increases in the current account surplus - an indicator that includes merchandise trade but also investment, tourism and other fund flows. The night before the trade report was released, U.S. Trade Representative Charlene Barshefsky told reporters in Washington that she found the trend of rising Japanese trade surpluses 'disturbing.' The comments from Barshefsky augmented concerns that Japan's rising trade surpluses will become an issue at the Group of Seven economic summit later this month in Denver. News of the rise in the current account surplus sent the dollar down against the yen in currency trading in Tokyo. As of midday, it stood at 111.40 yen, down 1.59 yen from late Tuesday. Despite U.S. assertions to the contrary, currency traders believe the United States sees a stronger yen as a useful tool in paring down Japanese trade imbalances. A high yen would make Japanese surpluses more expensive - and thus less competitive - overseas, while making imports more affordable. Some analysts believe, however, that the spike in Japan's trade surpluses in April and March may be due to unusual factors, including a national sales tax increase in April that discouraged consumer spending. [06] Granada will invest $320 million in its media division over next five yearsGranada Group will invest around £200 million ($320 million) over the next five years to grow its media division ''very strongly,'' Chairman Gerry Robinson said.Granada also announced that first half profit had jumped by a third as the benefits of its takeover of Forte last year fed through. Pre-tax profit excluding exceptional items climbed 33% to £243 million in the 26 weeks to end March, just ahead of analysts' forecasts. Granada is poised to expand its British commercial television operations through a deal to acquire northern neighbour Yorkshire-Tyne Tees Television. In addition, the media division growth could lead to the creation of 1,000 jobs within two to three years, Robinson said in an interview with Dow Jones Newswires. This investment, along with the possible acquisition of YTTV Holdings in the near future, could rekindle speculation that Granada is positioning itself to spin off its media arm, with investors speculating that Robinson is trying to build a business weighty enough to stand on its own. But although Granada ''certainly would not rule it (a spinoff) out, we are not likely to do it,'' Robinson said. The chairman said the argument many use to justify spinoffs is that they enhance shareholder value. But he questioned whether Hanson and Thorn shareholders feel value had been enhanced after spinoffs at those companies. Former conglomerate Hanson completed a four-way split earlier this year, and Thorn separated from EMI last August. Earlier this week, Granada and YTTV revealed that they were in talks which could lead to Granada making an offer of around 11.75 pounds per YTTV share. Robinson thinks ''a couple of weeks'' could go by before the talks lead to Granada launching a bid. He expects any deal to be agreed by both sides. Some commentators have said that buying YTTV would give Granada regional dominance in the Independent Television Market in the Northern England and could spark a round of consolidation in the sector. [07] Greenspan is sceptical on Russia's ability to make a smooth transition to capitalismFederal Reserve Chairman Alan Greenspan said that deeply embedded socialist values and the lack of some basic underpinnings of a free-market economy will make Russia's evolution to capitalism very slow.'Altering what a nation teaches its children is a profoundly difficult task, and clearly cannot be accomplished overnight,' Greenspan said in an after- dinner speech prepared for delivery in New York. Greenspan was speaking at the Woodrow Wilson International Center for Scholars. The dismantling of the central planning function in an economy, as some had supposed, does not automatically establish a free market entrepreneurial system, Greenspan said. Greenspan suggested that countries with open economies have mistakenly assumed that much capitalist dogma is human nature. Instead, he said, it is cultural and will take time. He said it took generations for the vast amount of capitalist culture and infrastructure underpinning market economies to evolve - including laws, behaviours and business practices that had no role in communist societies. He noted that manufacturing and prices under communism were not dictated by available capital and demand and supply forces, but rather by specific instructions from state authorities. [08] French government won't interfere with Peugeot Citroen's layoff plansFrench officials said that the government won't hinder car maker Peugeot Citroen's plan to cut 2,816 jobs.While the government has put pressure on rival car maker Renault, which is 46%-owned by the state, to come up with an alternative to the closing of a plant in Vilvoorde, Belgium, it won't put pressure on Peugeot. ''Peugeot consulted its employees and is going through the process of a social plan in a regular way,'' said a senior aide to Prime Minister Lionel Jospin. ''We have no reason to interfere.'' Peugeot said it will cut the jobs, mostly through early retirement, during the next 12 months. The company unveiled the plan June 2, right after the socialists won parliamentary elections which handed them control of government. Socialist leaders said right after the announcement that Peugeot's plan wasn't acceptable and that the government should have been told ahead of time. The Jospin aide said it wasn't the government's intention to seek consultation on each layoff plan so long as employees were consulted by the company, as the law requires. The Jospin aide also indicated that the new socialist government wouldn't be any more accepting than its conservative predecessor for a request by Peugeot and Renault for a massive state-aided early retirement plan. ''There is a structural problem in the industry which must be addressed, but each early retirement plan costs 100,000 francs ($35,700) a year per worker and lasts at least three years, and we have budgetary constraints,'' the aide noted. New car sales in France are down 22.6% through the first five months of the year, a drop attributable in part to an unfavourable comparison with the year-earlier period when sales were aided by a government bonus to buyers trading in an old car. Analysts expect full-year sales to fall about 12%. [09] PTT Nederland, TNT form global postal companyDutch post and telecoms group PTT Nederland said it was merging TNT , GD Express World-wide and parts of PTT Post in a global express transport and business post company under the TNT brand name.According to KPN, the new business will book sales of about 9 billion guilders ($4.7 billion) this year, making it one of the world's four largest players in this sector. Ad Scheepbouwer, currently head of PTT Post, will be chief executive officer of TNT, which will employ over 50,000 people in more than 200 countries and have a turnover of some nine billion guilders in 1997, KPN and TNT said in a statement. TNT will comprise seven business units which will all focus on offering high-quality services to their customers in several submarkets, the statement said. 'The synergies between TNT, GD Express World-wide and PTT Post that we had foreseen at the time of the takeover, indeed exist. We consider this announcement of the new organization as the first in a row of steps toward the ideal structure for the company.' Scheepbouwer said. [10] Incentive sells half its ABB holding for $1.6 billionSwedish conglomerate Incentive said it has sold half of its holding in the Swedish parent, ABB, for around 12.4 billion kronor ($1.6 billion).Investment company AB Investor, like Incentive, a part of the Wallenberg group, bought 55.6 million of the 100.1 million ABB shares for 6.4 billion kronor. The rest of the shares were sold to Morgan Stanley Dean Witter for resale to institutional investors. Incentive realizes a pretax capital gain of around 9.9 billion kronor from the sale. After taxes the capital gain is estimated at 8.5 billion kronor. Incentive had before the sale 32.8% of the voting rights and 24.3% of the capital in ABB which in turn has 50% in Zurich-based Asea Brown Boveri ABB. After the sale Incentive has 12.4% of the capital and 16.9% of the voting rights in ABB. [11] UK unemployment falls slightly to 5.8%The number of registered unemployed in the UK fell by 18,400 in May as the unemployment rate fell to 5.8% from 5.9% in April. The fall was smaller than the 40,000-drop economists were expecting.The Office of National Statistics said the closure of job centres over Easter boosted the fall in unemployment in April but restricted the fall in May. The claimant count data are no longer being affected by changes due to the introduction of the Jobseeker's allowance last October, although the reform may still affect labour market behaviour for some time to come, said the ONS. The level of unemployment, which has fallen in each of the last 15 months, is now at its lowest since July 1990. The rate of unemployment is at its lowest since September 1990. [12] Stena and P&O still hoping for merger clearance despite the EU's 'letter of serious doubts'Swedish ferry company Stena Line and British P&O hope for a 'letter of comfort' from the European Union Commission in early July about a merger of the companies' cross-channel joint venture.Stena and P&O have received a 'letter of serious doubts' regarding the proposed merger. 'We will be responding very shortly to the concerns raised by the E.U. Commission and we look forward to a speedy resolution of the outstanding question,' Stena Line said. The Commission wanted to consider a possible duopoly in the short sea tourist market, and the need to keep the operations of the merged company, P&O Stena Line, separate from those of its parents, Stena said. The 'letter of comfort', that Stena expects will formally conclude the Commission's considerations of the case and enable the merger to proceed, according to the Swedish ferry line. The two companies are still waiting for approval from U.K. authorities while French authorities cleared the merger last week. [13] Corporate and Economic BriefsGerman pharmaceutical wholesaler Gehe forecast first half sales and profits would rise at least 10%. 'Growth in sales as well as pre-tax profits is expected to rise by 10 to 12% in the first half,' Gehe management chairman Dieter Kaemmerer told the group's annual meeting. For the entire year Gehe plans to top sales of 24 billion Deutsche marks ($14.1 billion) with profits climbing at a similarly strong pace.Germany's Volkswagen is suffering a sales slump in its home market and the rest of Europe as potential buyers appear to be waiting for the new Golf model due out later this year, industry analysts said. VW said global sales for the first five months of 1997 rose about 9% to 1.8 million vehicles but sales in Germany fell 11% to about 238,000 vehicles compared with the same period in 1996. Sales also fell 4.4% in western Europe to 595, 000 vehicles for the period from January to May. British investment banking group Hambros has announced improved annual pre-tax profit but said the return on capital of its banking division remained inadequate, although progress was being made. Hambros made profit before tax of £64.7 million ($105.9 million) for the year to March 31, up from £20.6 million the previous year. Earnings per share were 12.5 pence against a 7.6 pence loss and the total dividend was unchanged at 7.5 pence. Diversified German industrial group _Preussag said it was striving for a friendly takeover of freight and travel group Hapag-Lloyd_. Preussag also stressed that it wouldn't break up the Hamburg-based concern. 'A takeover of a majority stake will only take place with Hapag-Lloyd's approval,' Preussag said in a press release. Preussag added that any final decision will be based on price demands by shareholders. 'Talks with all shareholders are continuing,' Preussag said. The Greek parliament adopted the European Union's Schengen open-border pact despite a rebellion by opposition deputies and an all-night vigil outside by protesters including many priests and nuns. Schengen, which provides for border controls between EU member states to be removed and for increased cooperation on police matters, was backed by the ruling socialist party and the main opposition conservatives. Sweden's gross domestic product rose a preliminary 1.6% in the first quarter 1997 from the first quarter 1996, according to data released by national statistics agency SCB. Purchases of cars and recreational equipment as well as an increase in food consumption contributed to the 0.9% rise in private consumption in the first quarter. The buying of cars added 0.6 percentage points to the rise. Finnish energy group Neste reported a 3% increase in pretax profit for the first four months of 1997, with all divisions increasing their sales from 1996, except crude oil trading volumes which continued to decline. For the January to April period, Neste posted pretax earnings of 284 million markkaa ($55.4 million), up from 277 million the previous year. For 1997, the company sees the operating profit improving from the 1.08 billion markka achieved in 1996, in spite of uncertainty about the crude oil price and other market conditions. The performance will also be enhanced due to expansions in production and improvements in productivity, Neste said. Finnish industrial group Metra showed a 24% drop in pretax profit to 38 million markka ($7.4 million) for the first four months of 1997, compared with the corresponding year-earlier period. Metra attributed the shrinking profit mainly to rising costs, with financial costs increasing to 75 million markka, from 63 million markka a year earlier. The group's share of associated companies' results widened to -15 million markka from -6 million markka in the first four months of 1996. [14] World News BriefsA private militia leader launched efforts to mediate a truce between government troops and a warring faction, whose battles raged through the night and forced more evacuations from the city. Heavy fighting with mortars, machine guns and grenades pounded Brazzaville until daylight, when it subsided slightly. French troops ventured into the city to pick up stranded civilians, including many crowded at the French ambassador's residence in a quiet neighbourhood controlled by Bernard Kolelas, an opposition leader whose Ninja militia was involved in clashes in 1993 that left 2,000 people dead.Heavy mortar fire and shooting rang out briefly across Sierra Leone's capital Freetown, causing panic in the city where many fear a Nigerian attack to restore ousted president Ahmad Tejan Kabbah, witnesses said. Two new Nigerian battleships equipped with surface-to-air missiles stand off Sierra Leone, raising fears of more fighting by West African troops trying to drive out leaders of last month's coup. China ended months of doubt by announcing its head of state, President Jiang Zemin, would attend the ceremony marking the handover of Hong Kong to Chinese rule at midnight on June 30. _Pul-i-Khumri, the last major Taleban-held town in northeastern Afghanistan_, fell to opposition forces, witnesses said. They said opposition forces moved into Pul-i-Khumri, south of Mazar-i-Sharif, about 2330 GMT Tuesday after the purist Islamic militia evacuated northwards toward the town of Baghlan. Police raided a hideout of suspected Muslim extremists in southern Egypt and killed three during the assault, security officials said. They said 40 suspected militants were taken into custody, including one wounded in the raid. The officials, speaking on customary condition of anonymity, said the raid was carried out in the village of Tallah near the town of Minya, which is 220 kilometres (135 miles) south of Cairo. They identified one of the victims as Atef Ragab Tughyan, a local leader of the al-Gamaa al-Islamiya, or the Islamic Group, who was wanted for a 1994 attack in which eight policemen were killed. The Khmer Rouge security chief who oversaw the torture and execution of thousands of Cambodians during the group's bloody four-year rule was accused by his comrades of treason. The charge against Son Sen, whose official title was defence minister in the Khmer Rouge government from 1975- 79, was made in a radio broadcast by Khieu Samphan, the only member of the Marxist guerrilla group's leadership who speaks to the public. The accusations revealed a further split in the dwindling ranks of the Khmer Rouge, which lost most of its men when 10,000 troops defected to the government last August. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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