GE-Honeywell merger blocked by EU
Strasbourg—As was widely expected the European Commission (EU) has blocked General Electric's proposed $42-billion acquisition of Honeywell International despite it having been approved in the US.
The proposed merger had been billed as the world’s largest industrial merger.
At a meeting in Strasbourg the 20-member EU executive blocked the deal over concerns that it would force rivals in several aerospace and related markets out of business. EU proposed that GE agree to certain concessions for the deal to be approved, but GE was unwilling to consider those concessions.
A senior official in EU said the merger between GE and Honeywell would have severely reduced competition in the aerospace industry and resulted ultimately in higher prices for customers, particularly airlines.
The decision leaves Honeywell to an uncertain future and a battered share price. The two companies had considered pulling the merger before the EU blocked it, but were apparently unable to agree to do so.
The last chance to save the deal evaporated on Friday when GE CEO Jack Welch rejected a suggestion by his counterpart at Honeywell, Michael Bonsignore, that he slash $1.7 billion from Honeywell’s price tag to compensate for extra selloffs to win Brussels’ approval.
Back to News Review index page  

FIs , Reliance play stake games in BSES
Mumbai-- Even as Reliance, the single largest shareholder in BSES, has been hiking its stake in the company through the creeping acquisition route, FIs have not been far behind. Most recently, through creeping acquisitions the FIs hiked their stake by 3 per cent from 36 per cent to around 39 per cent in BSES at the end of June.
Industry analysts said an intensified battle is in the offing as both Reliance and FIs promise to get active with creeping acquisitions.
The share price of BSES is currently hovering around Rs 190-200.
Earlier FIs had earlier refused to hand over management control of BSES to Reliance, after the latter raised its stake to 26 per cent in an open offer last year and had refused to bring down their stake from the 35-36 per cent levels.
FIs are the largest stakeholders (cumulatively) in BSES.
Back to News Review index page  

Modis’ open offer gets extension till July 16
Mumbai--The Modis’ open offer got an extension today, after it managed to garner 14-15 per cent shares, according to HSBC Securities, lead managers to the offer. The Bombay High Court extended the open offer for a 35 per cent stake in Modi Rubber at Rs 90 per share, to July 16. Earlier it had been scheduled to close on July 4.
The extension comes as the Bombay High Court directed Sebi to keep the offer open for seven more days, so that Mahendra Kumar Modi could subscribe to the offer in case he gets the market regulator’s approval.
Sebi officials say a section of the shareholders filed a petition in the courts today saying that if the offer was to be kept alive for one category of shareholders, it should be open to the others as well and thus the offer is now open to all categories of shareholders until July 16.
Though the financial institutions, which hold a 44 per cent stake in Modi Rubber, decided against participating in the offer, Modi remained hopeful that they would now do so. Some financial institutions had earlier said that they needed more time to arrive at a decision.
Back to News Review index page  

VSNL mulls NLD telephony launch by year-end
Mumbai—Visdesh Sanchar Nigam Ltd (VSNL) is thinking of launching its national long-distance phone service by the end of this year.
S K Gupta, chairman and managing director, said the organization was in talks with companies having or in the process of laying a nationwide optic-fibre network to buy or lease capacity for its foray into domestic long-distance telephony.
State-run VSNL, due to be privatised this year, has been promised free entry into national long-distance telephone business as part of a compensation package for ending its monopoly on overseas calls two years ahead of schedule.
Gupta said that VSNL would either buy bandwidth, a dark fibre or even an entire duct.
It is looking at companies like Reliance group, New Delhi-based unlisted Bharti group and state-owned telecoms giant Bharat Sanchar Nigam.
Back to News Review index page  

GM’s Opel Swings launched; priced competitively
New Delhi—After Fiat’s station wagon Fiat Weekend, Ford’s Ikon 1.6 Zxi and Hyundai’s Accent 1.5 GLS comes Opel Swing from General Motors India.
Modeled as a station wagon with five-doors, Opel Swing will be available in 1.4 and 1.6 litres variants and will be priced at Rs 6.21 lakh (for the 1.4 variant) and Rs 6.66 lakh (for the 1.6 variants) ex-showroom Delhi.
At the launch of the new model, GMI president and managing director Aditya Vij said, the company was looking at sales of about 200 vehicles a month and should notch up about 1,000 till December this year.
Swing is positioned between stationwagon models Siena Weekend and Baleno Altura and notchback models Ikon 1.6 Zxi and Accent 1.5 GLS and will target volumes from both segments said vice-president marketing Rajeev Chaba.
Back to News Review index page  

Eli Lilly picks up 50 percent stake in JV with Ranbaxy
New Delhi--Eli Lilly, the US pharma major has picked up the 50 per cent stake owned by Ranbaxy Laboratories in the joint venture Eli Lilly Ranbaxy (ELRL) for $17 million, said Rajiv Gulati, managing director of Eli Lilly (India operations). The deal includes the brand name and shares, which will be transferred to the parent company Eli Lilly in August this year.
He said Eli Lilly Ranbaxy is a joint venture between Ranbaxy and Eli Lilly Netherlands BV, a subsidiary of US-based Eli Lilly was set up in 1993 and was conceived to focus on clinical trials of drugs for which Rs 8 crore has been earmarked this year.
ELRL would soon be Eli Lilly.
The company has set this year's sales target at Rs 112 crore which was Rs 90 crore the previous year, Gulati said.
Back to News Review index page  

Oracle hikes India investment to $50m
Hyderabad—Indian software techies have attracted yet another US software giant to hike its investment in India. Now US software giant Oracle plans to invest $50 million in India within 12-18 months to take advantage of the country's expanding pool of cost-effective software developers.
Say company officials at Oracle that there was no downturn in India and the company was looking at shifting more work to India.
The bulk of the money will go towards boosting Oracle's Indian product development centre, which designs and develops software for many of Oracle's high-profile web products and would also cover Oracle's sales and marketing, customer support and consulting units in India
Oracle aims to double staff to 1,200 at its seven-year-old product development group, located in Bangalore and Hyderabad.
Oracle is the world's second-largest software maker.
Oracle has invested about $100 million in its Indian operations in the past seven to eight years.
Back to News Review index page  

Samtel acquires 70 pc stake in French co arm
New Delhi—Samtel, India’s largest domestic manufacturer of picture tubes, through group company Teletube Electronics Ltd, has acquired a 70 per cent stake in the German subsidiary of a leading French cathode ray tube manufacturer Thales Electron Devices GmbH. The latter is a subsidiary of Thales Electron Devices Group, France. The acquisition has led to the creation of a new company registered in Ulm (Germany) as Samtel Electron Devices GmbH.
The German firm valued at Rs 14.5 crore, will make available its manufacturing capability and the technical skills of over a hundred people for the design and manufacturing of cathode ray tubes for high resolution professional applications such as diagnostic imaging, avionics and measurement instruments.
This business currently has an annual turnover of 22 million Euros. TED GmbH has 40 per cent marketshare in this product category in France, Germany and the UK.
Samtel Electron Devices GmbH is expected to post an operating profit of Rs 9 crore this year on an expected turnover of Rs 90 crore.
Samtel’s group company Teletube is a leading manufacturer of professional CRTs in India, exporting almost all its products to USA and Europe.
The acquisition marks the first signals of a growing interest among domestic firms to set up manufacturing bases overseas. Kaura himself did not rule out the possibity of further acquisitions in Europe.
Back to News Review index page  

1,000 workers from IBM Global Services laid off
New York—And yet another lay off in the US! This time International Business Machines (IBM) has announced that it is laying off about 1,000 workers in its Global Services Group as their skills are no longer needed.
Global Services, the consulting and outsourcing arm of the technology giant, is one of IBM's fastest-growing units globally, employing about 150,000 workers, with the US division accounting for roughly 40-60 per cent of the workforce. As a whole, IBM employs over 315,000 employees worldwide.
In March, IBM offered workers an incentive of up to 26 weeks pay to leave the company in a "voluntary" reduction of the group. But Jan Butler, an IBM spokeswoman, said the group would likely end the year with more than 150,000 workers because of additional hiring planned for the unit this year.
Back to News Review index page  

Hewlett-Packard asks workers to take pay cuts
Palo Alto (California)— In an effort to trim costs Computer and printer maker Hewlett-Packard has asked 14,000 of its workers in Asia to take pay cuts or use additional vacation days.
The employees have three choices: Take a 10 per cent pay cut, use up eight paid vacation days, or take a 5 per cent cut and four vacation days.
The programme is voluntary and about 23,000 workers worldwide have signed up so far, said a Hewlett-Packard spokeswoman.
The pay cuts for both Asian and American workers will be implemented for four months. Employees can decide until July 6 if they want to take part.
Back to News Review index page  

Shell may foray into gas distribution
Ahmedabad- Shell, the global oil and gas major, is exploring plans to enter into gas distribution business in India.
Steve Twilley, a director in Shell International, said that the subsidiary of Shell International--Shell India definitely wants to get into gas distribution business in India.
He said Shell has a presence in the gas distribution business all over the world as a first step, Shell would bid for gas distribution circles in Gujarat, whenever it is opened for bidding.
Shell has already evinced keen interest in picking up 11per cent equity in the 1,507-km, Rs 2,345-crore Gas Grid project in Gujarat at $11 million. The Gas Grid project is being promoted by Gujarat State Petronet.
Back to News Review index page  

Telco plans to sell investments to pay debts
Mumbai—Tata Engineering and Locomotive Company (Telco) is planning to raise about Rs 300 crore through the sale of investments and will use the proceeds to pay off its high-cost debts.

Recently, the automobile major mopped up Rs 145 crore through the sale of its entire US-64 holding which was yielding low returns.
The company is also planning to divest its equity holdings in non-core businesses and is also exploring the option of unlocking funds through the sale of real estate.
Funds from the sale of the investments will be used to prepay part of Telco’s high-cost debt amounting to Rs 500 crore. The debts carry an interest liability of 14 to 16 per cent, while Telco’s average cost of funds aggregates to around 11 per cent.
Telco, which posted its highest ever loss in 2000-01 due to the slump in commercial vehicle and passenger car sales, is also exploring all possible options to bring down costs.
Miserably enough, the March-June quarter is turning out to be worse than that of last year and the company has taken a decision to divest its shareholdings in non-core businesses.
Back to News Review index page  

Universal Studios mulls setting up $500 m theme park in India
New Delhi--Universal Studios the Hollywood films giant, is planning to set up a theme park in India at an estimated cost of about $500 million and is scouting for an Indian partner for the venture. Industry sources say Universal Studios broached the subject during recent talks held in Los Angeles with an Indian delegation led by information and broadcasting minister Sushma Swaraj, which included members of Ficci’s entertainment committee and Bollywood bigwigs.
Reportedly the International Finance Corporation, a World Bank subsidiary, has earmarked about $100 million to be invested in the Indian media and entertainment industry.
The global media and entertainment industry’s interest in the Rs 9,600 crore Indian film and media industry is growing. The industry is expected to almost treble in size to Rs 28,600 crore by 2005 as per a study done by Arthur Andersen for Ficci. The TV broadcasting segment alone is expected to grow to Rs 8,400 crore by 2005. The current turnover of the sector is estimated to be around Rs 3,000 crore.
Back to News Review index page  

Rallis sells property to TCS for Rs 133 crore Mumbai—Rallis India has sold its surplus land at Andheri, a suburb in Mumbai, to Tata Consultancy Services (TCS) for Rs 133 crore. This is probably the second largest sale of real estate in Mumbai in recent times. TCS, India’s software powerhouse, will develop a state-of-the-art software park on the land. The acquisition will also enable TCS to consolidate its operations at one place in the city.
At present, the company’s operations are spread over 12 different locations in Mumbai. This stretches from the city’s commercial hub at Nariman Point to Borivli, another Mumbai suburb which is about 30 kilometres away.
Back to News Review index page  

Full-time home shopping from HLL
Mumbai—Hindustan Lever Ltd has launched what it calls a "full line" grocery home shopping service called Sangam Direct. A consumer now just has to telephone the service (2000333 in Mumbai) or get online and place his/her order. The theme of Sangam Direct is ‘Shopping Ghar Baithe.’
At present Sangam Direct has been launched as a pilot project at Thane in Mumbai will go nationwide if the project takes off in a big way. The service offers customers some 5,000 branded and grocery products, ranging from toiletries and provisions to home maintenance and beauty products to over the counter drugs.
Not only this, Sangam Direct will offer not only Lever products but also those of its competitors.
Service of this sort is already being offered at least through phone lines if not e-mail by any number of small grocers in most cities in India. Lever is however the first big Indian company to leap into this service-oriented area.
Sangam Direct promises to deliver all your goods within 24 hours to your home. You can also order on the website-www.sangamdirect.com. Home delivery is absolutely free for orders above Rs 400. For orders under Rs 400, a nominal delivery cost of Rs 20 is charged.
Back to News Review index page  

Kuoni takes over Tour Club
Mumbai--Kuoni India has acquired Tour Club Private Ltd, a firm giving incoming services to tourists coming from the West Asia and Africa, in an ‘earn-out deal which means that the final price of the acquisition will depend upon the profits generated from the company within the next 3-5 years.
Tour Club has over 60 per cent market share in terms of tourists coming from West Asia and Africa.
Kuoni India is targetting a base level profit of Rs 3 crore from Kuoni Tour Club, which is expected to grow at a compound annual rate of 20 per cent per annum for five years, which aggregates to a projected profit of Rs 7.46 crore.
Back to News Review index page  

ICICI Bank ties up with BPL Mobile for co-branded credit card
Mumbai--ICICI Bank and BPL Mobile today tied-up to launch a co-branded credit card to be named ICICI Bank-BPL Mobile Credit Card. The card will be operational by the end of August this year.
This tie-up will help the two to shore up their customer base. Currently, ICICI Bank has a customer base of around three lakh, while BPL Mobile has around seven lakh customers. Both are able to acquire 30,000 new customers monthly.
A senior official at ICICI Bank the co-branded card will allow both companies to increase their customer base and also create stickiness with customers, thus ensuring customer retention.
The co-branded card also allows an auto-debit feature, whereby the customer can gain a longer credit period for paying the phone bills, once he authorises ICICI Bank to effect a direct debit on the card for payment of phone bills. These advantages of the co-branded credit card will not be available to prepaid BPL Mobile customers, which forms around 40 per cent of the customer base.

Rangan said, "We have around 56 per cent of the corporate market share in Mumbai and this will offer ICICI Bank an entry. Also in the areas where we are weak, we can tag along with ICICI Bank.". Kochhar added that BPL Mobile can tap the relationship that the bank has with the corporates through its PowerPay Accounts.
Back to News Review index page