WTO revises drafts on subsidies and tariffs to push trade talks
Mumbai: The World Trade Organisation has issued fresh drafts on the most contentious issues of lowering farm subsidies and cutting industrial tariffs, in a renewed effort to bring the global trade talks back on track.

Under the revised draft, the US would have to cut farm subsidies to between $13 billion and $16.4 billion a year. Its current limit is around $48 billion, while Washington has offered in the WTO negotiations a new cap of $17 billion.

The European Union has to cut its highest tariffs on farm imports by 73 per cent, more than the 60 per cent it has offered so far.

Developing countries would also cut import tariffs on industrial goods, such as cars or chemicals, but not by as much as rich nations, the draft said.

Major developing countries like Brazil, China and India will also have to offer greater market opportunities for industrial exports, according to the new draft prepared by agriculture and manufacturing mediators.

Trade analysts, however, said the documents do not indicate any common ground between the extreme positions of the developing and developed countries with regard to the formula and the modalities for reduction of farm subsidies.

As a result, the Doha Round of world trade talks was to conclude in the beginning of 2005 and is running much behind the original time line. (Read More)
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Imperial Tobacco to acquire Altadis in $22-billion cash deal
Three months after closing its $1.9-billion buyout of Commonwealth Brands, which enabled it to expand into the US market, Europe's second-biggest cigarette maker, the UK-based Imperial Tobacco Group Plc, today announced its decision to acquire its Franco-Spanish rival Altadis, for €50 in cash per share.

The offer is an improvement from its previous proposal of €45 and €47 a share, rejected by Altadis, and 29-per cent higher than Altadis' share price on the day prior to Imperial's offer in March, this year, and values the transaction at €16.2 billion ($22.4 billion / Rs93,036.6 crore), including debt..

The price also matches a rival offer from Europe's second-largest leveraged buyout firm, London-based CVC Capital Partners.

Altadis said it would back the Imperial offer in the absence of a higher offer from CVC. Imperial plans to finance this takeover, the European tobacco industry's largest, by issuing new shares worth £5.4 billion.

Through the takeover, Imperial that owns the Davidoff brand will gain the Gitanes and Gauloises brand of cigarettes and some of the world's best-selling cigars like Montecristo and Don Diego.

The deal will strengthen the British company's position as the world's No.4 cigarette maker. (Read More)
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Sainsbury confirms bid approach from Qatari group
The UK's third-largest grocery supermarket chain, J Sainsbury Plc, the parent company of Sainsbury's Supermarkets Ltd that operates the Sainsbury's stores and supermarkets, has received a preliminary takeover approach from Qatari investment group Delta Two, the government owned investment vehicle.

According to earlier reports, Delta Two, which already owns about 25 per cent of Sainsbury and is considered a potential bidder, had indicated being prepared to offer 610 pence a share, valuing the group at around £12 billion.

According to a report in the UK business daily Financial Times, the proposal from Delta Two did find favour with the Sainsbury family, which owns around 18 per cent of the company, though the management headed by chief executive Justin King, was willing to discuss the offer.

Three months earlier, the family had rebuffed a 582 pence a share approach amounting to £10.1 billion from a private equity consortium led by Europe's second-largest leveraged buyout firm, the London-based CVC Capital Partners. (Read More)
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Walker report calls for more disclosures by UK's buyout firms
Mumbai: Buyout firms should boost their transparency and disclose how much debt they use to acquire companies, according to a review commissioned by the industry to fend off government regulation of private equity funds.

Sir David Walker, a leading figure and former Bank of England director, criticised the private equity industry for secretive behaviour, but stopped short of saying that the controversial buyout bosses should disclose any details of their pay or taxes, in a 50-page report.

Companies owned by buyout firms should publish annual accounts within four months of their fiscal year ends, instead of the nine months allowed under UK law, according to the review. He stopped short of recommending disclosure of how much dealmakers and executives at the companies are paid.

The firms, which acquire companies by using vast sums of debt, have been accused of buying companies on the cheap, paying little or no tax, then making off with millions in profit when they sell the businesses a couple of years down the line.

The report, which was commissioned by the private equity industry's own trade group, is the first attempt by the buyout firms to stem a rising tide of political and union pressure over the way they do business.

Separately, a panel of lawmakers and the UK treasury are reviewing how private equity firms are taxed. (Read More)
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Air France-KLM plans rival bid for Iberia
Mumbai: Air France-KLM is planning a rival bid to a British Airways-led consortium's offer of €3.4 billion ($4.6 billion) for Spanish airline Iberia.

Air France-KLM will jointly bid with private equity group Apax to acquire Europe's fourth largest airline.

BA has teamed up with private equity groups TPG Capital, Vista Capital, Inversiones Ibersuizas and Quercus Equity to make the 3.4 billion euros ($4.6 billion) offer.

Separately, TPG on its own has already informally offered €3.4 billion for Iberia.
BA already owns a 10 per cent stake in Iberia and has an option for another 30 per cent. The UK airlines also confirmed that it is part of a consortium looking at bidding for Spanish airline Iberia.

Although BA appeared unfazed by news of a possible offer from Air France, observers believe a bidding war may break out for Iberia, following the latest comments from Air France-KLM that it will actively promote consolidation of the industry.
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Dow Jones board clears $5 billion News Corp bid, seeks Bancrofts' nod
Mumbai: The board of Dow Jones & Co. Inc. has endorsed a $5-billion buyout offer from Rupert Murdoch's News Corp., sending the deal to the controlling Bancroft family for final approval.

The 16 directors of New York-based Dow Jones committed to accepting the $60 a share bid if a sufficient shares belonging to members of of the Bancroft family, who together control 64 per cent of the voting shares, accept the cash offer.

The members of the board, who met for several hours in the evening, were not unanimous in their decision but a "strong majority" voted to recommend approving the deal, said one source familiar with the matter.

The deal could be completed within a week if the company's defiant controlling shareholders heed their directors' advice.

Bancroft family members have extracted guarantees from News Corp that it would not influence coverage in Dow Jones' main publication, The Wall Street Journal. But the 35 family members with voting rights are still divided on whether to accept the offer.

The Bancroft family has controlled Dow Jones since 1905. It now owns less than a quarter of all Dow Jones shares on issue, but has retained its dominance by holding many Class B shares, which have 10 times the voting power of Class A shares.

Meanwhile, internet entrepreneur Brad Greenspan, who offered to buy a 25 per cent stake in Dow Jones at $60 per share, said before Dow Jones released its statement that he remained "engaged in the process". (Read More)
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Pratt & Whitney bags upper stage engine contract for new Ares rockets
The National Aeronautics and Space Administration of the USA (NASA) has signed a $1.2-billion contract with Pratt and Whitney Rocketdyne Inc of Canoga Park, California, for design, development, testing and evaluation of the J-2X engine that will power the upper stages of its new Ares I and Ares V launch vehicles, popularly known as rockets.

The J-2X is an updated version of the powerful J-2 engine that propelled the Apollo-era Saturn IB and Saturn V rockets, and the J-2S, developed and tested in the early 1970s.

Pratt and Whitney Rocketdyne designed, developed, produced, refurbished and improved both the J-2 and the J-2S. The J-2X engine will incorporate significantly higher parameters to meet higher performance and reliability requirements for new the Ares vehicles.

The Ares I is a two-stage rocket that will blast the new Orion crew exploration vehicle — which will be able to accommodate as many as six astronauts — into low Earth orbit. The first stage will consist of a single reusable solid propellant rocket booster similar to the one on the present space shuttle, with an additional fifth segment.

The second stage will consist of a J-2X cryogenic main engine operating on liquid-oxygen-and-liquid-hydrogen fuel, and a new upper stage fuel tank. (Read More)
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Alitalia's sale faces the risk of being grounded
Italian airline Air One has withdrawn from the bidding for a substantial stake in state-owned rival Alitalia.

It said it took the decision because Alitalia's "sustainable growth" would be compromised by the sale conditions. The group led by Air One was the last serious contender for the stake in loss-making Alitalia after Russian airline Aeroflot pulled out last month.

Its withdrawal threatens to derail the Italian government's plans to privatise the national carrier.

Interested parties have until 23 July to make legally binding offers for the government's stake - up to a maximum of 49.9 per cent - it plans to sell. The deadline has been extended twice and the bidding process has been further confused by uncertainty over Alitalia's true financial situation.
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