American Home Products, Warner Lambert merge
Mumbai : Warner Lambert Co. and American Home Products Co., two of the world's giant pharmaceuticals have announced a mega-merger worth $72 billion. American Home Products will use its shares to acquire the shares of Warner Lambert. The new company is to be called American Warner Inc. Combined sales are expected to be $26 billion this year and from the third year on, the merged company expects to save around $1.2 billion annually.
The merger is expected to affect the combine's position in India as well. Sales would exceed Rs 650 crore now and the merged company's ranking could jump to number four. Currently, AHP subsidiary Wyeth Lederle is ranked 19, and Parke Davis, owned 40 per cent by Warner Lambert, is ranked 22. Warner Lambert also has a 100 per cent subsidiary, Warner Lambert India.
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Wipro widens acquisition net
Bangalore : The erstwhile Wipro Software and Services, renamed Wipro Technologies for clarity and brevity, has widened its acquisition target net to include companies in telecom and systems software. Earlier, the target list included only e-commerce companies.If the target company is in India, the funding will be through share swaps. If the takeover target is abroad, the funding will be through ADRs. Wipro technologies has identified productised services as its focus in the near future.
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Modern Foods bidders shortlisted
New Delhi : Of the 10 companies that had bid for buying out the 74 per cent government stake in Modern Foods, the committee set up by the government for finalising
the strategic partner has shortlisted Nestle, Hindustan Lever Ltd, Britannia and Evergreen. The final selection will happen in a two-phased process to be completed by the first week of December. The final divestment by the
government will take place on December 15.
The shortlisted companies will be evaluated on grounds of financial and technical viability. Modern Foods' assets have been valued at Rs 109 crore, but the final equity price is as yet not announced.
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Tetley deal may close, finally
Mumbai : Two Tetley executives have arrived in Mumbai to meet top Tata people to finalise the Tetley brand sale to the Tatas. The Indian company has emerged as the sole bidder for the brand and had settled on $270 million for the acquisition. Tetley however, had been expecting $300 million for the sale. Following a due diligence exercise, the Tatas have decided not to pick upTetley's associated coffee brands but settle at a lower, mutually suitable
price.
At the final meetings, it is expected that the Tatas might try for a price lower than $270 million. Tetley has seven per cent market share globally in the $600 million tea category.
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Maruti 800 price to go up
New Delhi : From January 2000, Maruti 800 is going to be 13 per cent more expensive. Its price is going to be increased by Rs 25,000 (ex-showroom), making each car
cost Rs 2.16 lakh. Delhi may find the price going effective from December 1 itself, so Maruti Udyog Ltd. can absorb the extra cost to make the model Euro II compliant.
The Euro II condition imposed by the Supreme Court, which will cut down vehicular pollution significantly, is expected the make the Zen, Maruti 800 and the Omni range from the Maruti Udyog stable costlier by between Rs 18,000 and Rs 25,000.
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National Panasonic to push digital flat CTVs
New Delhi : National Panasonic India Ltd is planning to launch 14 models of digital flat colour televisions, under the Tau brand name, in 2000 in the country. It expects these to contribute 30 per cent to its sales in the year. By the end of 2000, it hopes to capture five per cent of the CTV market, towards which goal it is planning out an aggressive marketing strategy and competitive
pricing.
Nine of the 14 new models are to be locally manufactured. The company is making a Rs 50 million investment in the Tau series. In addition, it intends
to launch its microwave ovens, starting February 2000. Having invested around Rs 110 crore for manufacturing facilities for its washing machines and airconditioners, the company also hopes to garner seven per cent market
share for its washing machines.
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IDBI to tie up with a commercial bank
Mumbai : IDBI is expected to finalise its plans to tie up with a commercial bank which would have a much bigger retail reach than itself, in order to widen its own reach in the retail banking business. This is a crucial step in its
plans to be a universal banking entity and for raising cheaper funds.
The process will be in two steps: first, IDBI will pick up some equity stake in the bank; this will be followed by merging the bank with itself.
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AOL, Blockbuster join hands
Los Angeles : In a distribution tie-up that will tap a combined base of over 60 million US customers, the world's leading Internet service provider, AOL, has joined
strengths with top home video rental group, Blockbuster, a Viacom subsidiary.
This is a major leap for Blockbuster, which launched its internet strategy last month but did not manage to make any waves with it. AOL will invest $30 million in Blockbuster to develop broadband delivery content and systems, while Blockbuster will distribute AOL's free software and services through its network of over 4,000 stores, catering to two million or so customers a
day.
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FrontlineSoft ties up with PneumaSoft
Hyderabad : The Hyderabad-based FrontlineSoft Ltd, a software development company specialising in offshore software development, has signed a joint venture agreement with Canadian software company PneumaSoft Inc. According to the agreement, PneumaSoft will market FrontlineSoft's products in the US.
The joint venture will enable services in consultancy and software in the US, where PneumaSoft already has offices. FrontlineSoft's services will also be offered in Europe by PneumaSoft and a new company, International Stock Information Corporation, is to be set up to offer stock market information.
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Leo and MacManus merge
New York : Advised by Morgan Stanley Dean Witter, Leo - parent company of Leo Burnett - and MacManus, the parent of D'Arcy Masius Benton & Bowles, have decided to merge. This will be the biggest merger in the global advertising industry in more than a decade.
No value has been put on the deal since both parties are equals in strength. The new entity emerging out of the merger, is to be called BDM for the time being. It will be headquartered in Chicago.
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Ipitata up for sale
Mumbai : The Tata group has decided not to merge its Orissa-based Ipitata Refractories with Tata Refractories, as planned earlier, because it feels Ipitata would pull down the bottomline of Tata Refractories. Instead Ipitata is now to be sold. Tata Refractories has already reduced its stake in Ipitata from its earlier 51.9 per cent. The name of the company has also been changed from Ipitata Refractories to Nilachal Refractories and prospective buyers have been approached though nothing has come out of it
yet.
Ipitata/Nilachal, which primarily supplies to steel and cement companies and mainly produces fire clay and high alumina refractories, has been severely hit by the recession. While in 1998-99, it clocked a turnover of Rs
20.5 crore, its net losses ran into Rs 19.62 crore. In the first half of this year, however, it has reportedly achieved a cash breakeven.
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Alcoa to acquire stake in Hyundai company
Chicago : Global aluminium giant Alcoa of the US, has signed a letter of understanding with the heavily indebted Hyundai group, to pick up a majority stake in Korea's Koralu Aluminium. The terms of the deal are still under wraps.
The Hyundai Group has been under pressure from the Korean government to sell some of its businesses to reduce its debt load by half.
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Agfa to be independent entity
New Delhi : In line with its decision to globally bring its entire imaging business under its wholly-owned subsidiary, the $5 billion Agfa Gevaert NV, Bayer AG will spin off its photographic and medical equipment division in India, currently part of its domestic subsidiary (51 per cent stake), into a separate entity. The company has already approached the FIPB for approval to set up Agfa Gevaert India and wants to set up the new company in the first
quarter of 2000.
The parent company will bring in the necessary Rs 8,00,000 to 1 million to set up the new company. The Agfa brand of photo films will, however, continue to
be marketed by MCC Imaging Pvt Ltd in India. The idea behind the formation of the new company is to better leverage the Agfa brand and garner bigger market share in India's fast growing imaging sector.
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GE to set up IT subsidiary in India
New Delhi : The Indian government has reportedly approved the US-based General Electric's proposal to set up a wholly-owned IT subsidiary in the country to service the Indian and global markets. The significance of GE's decision lies in the potential the company sees in the emerging IT sector in India.
GE is expected to start out with a small investment in the subsidiary, at $25,000. The company believes the investment is adequate for the time being.
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San Miguel may pick up stake in London Pilsner
Bangalore : Associated Breweries Ltd, which has a licensing agreement with San Miguel Corporation of Philippines to manufacture and distribute San Miguel lager
beer in India, may offer a minority stake to the Philippines-based company in its Mumbai-based subsidiary, London Pilsner Breweries Ltd.
Talks have happened, though decisions have yet to be taken. London Pilsner Breweries has been floated to set up a 1.5 lakh hecta litre brewing facility in south Goa. On an initial investment of Rs 40 crore, the facility is expected to be completed in 18 months. Picking up the equity stake would give San Miguel direct entry into India.
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