ENERGY
Southern buys gas stake
Southern Co bought a 50 percent stake in Kinder Morgan Inc’s Southern Natural Gas pipeline system in the latest expansion into natural gas transportation by a utility as power demand ebbs. Kinder Morgan will continue to operate the 12,000km system that connects natural gas supply basins in Texas, Louisiana, Mississippi, Alabama and the Gulf of Mexico to markets in the southeastern US, the companies said in a statement. Inclusive of existing Southern Natural Gas debt, the transaction equates to a total enterprise value of about US$4.15 billion, which implies a value of US$1.47 billion for Southern Co’s 50 percent share of the equity interest. With demand for electricity declining and natural gas taking market share from coal, Atlanta-based Southern was among the first utility owners to seek growth by buying a gas transporter.
AVIATION
Boeing mulls acquisitions
Boeing Co is considering smaller acquisitions that it could “bolt on” to the defense division to boost revenue, particularly in the services sector, Leanne Caret, the division’s chief executive officer, told reporters on Sunday. Caret wants to make Boeing the market leader in six areas: commercial derivatives, such as its aerial refueling tanker built from modified 767 jetliners, rotor craft, autonomous vehicles, satellites, services and human space flight. Boeing, the second-largest US defense contractor, is charting strategy ahead of the eventual retirement of its F/A-18 and F-15 series next decade, its largest source of defense sales. Like peers, the US planemaker is resetting priorities for a world in turmoil and with constrained government spending. The heightened focus on the six areas does not mean it is expecting to exit the fighter-jet business, Caret said. Caret, who took charge of Boeing’s defense business four months ago.
STOCK EXCHANGE
Deutche Boerse mulls cap
Deutsche Boerse AG might lower the threshold for shareholder approval of its London Stock Exchange Group PLC acquisition, according to a person familiar with the discussions. The Frankfurt-based exchange operator may reduce the needed approval to about 60 percent of investors from 75 percent, said the person, who asked not to be named because the talks are confidential. Deutsche Boerse investors have until today to tender its shares after LSE shareholders approved the merger last week in a near-unanimous vote. Deutsche Boerse management has said that the UK’s decision to leave the EU makes the deal even more important. In addition to worries that enough Deutsche Boerse shareholders might not approve the transaction, Brexit has raised questions about whether London will retain its role in euro-denominated clearing.
TELECOMS
Telefonica sells stake
Telefonica SA, facing roadblocks in the planned sales of its assets following Britain’s vote to leave the EU, sold part of its stake in China Unicom Ltd (中國聯通) to raise US$364 million. The Madrid-based carrier sold 361.8 million shares, or a holding of about 1.5 percent, at HK$7.8 apiece, according to a regulatory filing by Telefonica yesterday. The company retains a stake of about 1 percent in China Unicom. Telefonica is raising cash to improve its balance sheet. The carrier risks having its credit rating cut should it fail to identify a path toward reducing debt by year end, Moody’s Corp analyst Carlos Winzer said last month. Telefonica shelved plans to sell a stake in its British wireless carrier O2 amid market volatility following the country’s referendum.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by