CHEMICALS
Total sells Atotech
Total SA agreed to sell its specialty chemicals unit Atotech to Carlyle Group LP for US$3.2 billion as the French oil company disposes of non-core assets to weather a slump in crude and preserve payouts to shareholders. The sale price is 11.9 times Atotech’s adjusted earnings for last year before interest, tax, depreciation and amortization, the companies said in a statement yesterday. Equity for the transaction is to come from buyout funds Carlyle Europe Partners IV and Carlyle Partners VI. Atotech, which had revenue of 1 billion euros (US$1.1 billion) last year, has more than 4,000 employees, mainly in China and Germany.
RETAIL
Wal-Mart sees flat earnings
US retail giant Wal-Mart Stores Inc on Thursday predicted that earnings would be flat in fiscal year 2018 as it pumps up investment in e-commerce initiatives. Wal-Mart said earnings for the next fiscal year that begins on Feb. 1 next year will be essentially unchanged from those of fiscal 2017, which are expected to come in at US$4.15 to US$4.35 a share. The company forecasted an overall capital budget of US$11 billion in both fiscal 2017 and 2018, down from US$11.5 billion in fiscal 2016. It will open 130 new stores in the US in the current year, down from a prior plan to build 135 to 155 stores. The company expects to build 55 new stores in the US in fiscal 2018.
INVESTMENT
Norwegian fund posts profit
Norway’s US$882 billion sovereign wealth fund, the world’s biggest, returned a profit in the third quarter thanks to strong stock markets, it said yesterday. The fund earned a return of 4 percent in the quarter, or 240 billion Norwegian kroner (US$29.7 billion), beating its benchmark by 0.2 percentage points. In the second quarter the fund booked a profit of 1.3 percent. “Equity investments performed strongest during the quarter with positive returns in all regions. This was the main contributor to the fund’s results,” fund deputy chief executive Trond Grande said in a statement.
AVIATION
CIT sells leasing unit
The CIT Group, a commercial lender, on Thursday agreed to sell its aircraft leasing business to a Chinese-owned competitor for about US$10 billion, signifying a big step by CIT to slim itself down in the face of pressure from investors. CIT is selling its aircraft leasing unit — which owns and manages 334 planes and has an additional 133 on order — to Avolon Holdings Ltd, which is based in Ireland, but is owned by the HNA Group (海航集團) of China. CIT will use the proceeds to pay out more than US$3 billion to its shareholders and to further bolster its balance sheet.
RETAIL
Seven & i restructuring
Seven & i Holdings Co unveiled a restructuring plan to divest struggling department stores and set up a real-estate division, in a bid to focus on boosting profit at its core 7-Eleven business. The new unit, to be created this fiscal year, will explore redeveloping property occupied by under-performing general merchandise stores into housing for seniors or other residential and commercial facilities, company president Ryuichi Isaka said on Thursday. Seven & i also announced a capital alliance with a local retailer and is to transfer three Sogo & Seibu department stores to the partner. Seven & i Holdings shares yesterday fell the most in three months in Tokyo trading in the wake of the plan’s announcement.
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
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
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