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.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure