VITAMINS
Nestle to buy Bountiful
Nestle SA agreed to buy vitamin maker Bountiful Co for US$5.75 billion, becoming a world leader in the field of minerals and supplements, as the COVID-19 pandemic boosts demand for pills. KKR & Co and Carlyle are selling the company for 16.8 times earnings before interest, tax, depreciation and amortization. Nestle said it expects the purchase to close in the second half and weigh on profitability this year. Nestle chief executive officer Mark Schneider dove into the field of vitamins and supplements in his first year as CEO in 2017 with the US$2.3 billion acquisition of Atrium Innovations Inc.
FRANCE
Economy returns to growth
The economy returned to growth in the first quarter after the government delayed implementing strict COVID-19 lockdowns that have since clouded the outlook. The nation’s economy grew 0.4 percent in the three months through March, helped by President Emmanuel Macron’s decision to put off the tougher restrictions imposed in other European countries. Reports from two of the eurozone’s three largest economies show how far behind the EU is in recovering from the pandemic amid a slow vaccine rollout. France’s stronger-than-expected performance was supported by continued growth of business investment and a slight rebound in consumer spending after a slump at the end of last year. Trade dragged on output. The resilience might not last into the second quarter now that the government has enforced a strict month-long lockdown.
CHINA
Factory activity growth falls
Factory activity growth last month slowed and missed forecasts as supply bottlenecks and rising costs weighed on production, and overseas demand lost momentum. The country’s official manufacturing purchasing managers’ index (PMI) fell to 51.1 from 51.9 in March, data from the Bureau of Statistics showed yesterday. It remained above the 50-point mark that separates growth from contraction on a monthly basis, but was below the 51.7 expected in a poll of analysts. “Some surveyed companies report that problems such as chip shortages, problems in international logistics, a shortage of containers and rising freight rates are still severe,” bureau statistician Zhao Qinghe (趙清河) said in a statement accompanying the official PMI. That contrasted with a private-sector survey, which showed that factory activity last month expanded at the fastest pace in four months, although businesses in that release also reported a sharp surge in input costs.
CHINA
Firms face added curbs
Regulators on Thursday imposed wide-ranging restrictions on the fast-growing financial divisions of 13 companies, including Tencent Holdings Ltd (騰訊) and ByteDance Ltd (字節跳動), in a crackdown on the tech sector. Units of JD.com Inc (京東), Meituan (美團) and Didi Chuxing (滴滴出行) were also among firms summoned to a meeting with several watchdogs, including the People’s Bank of China, which spelled out a raft of requirements, including stricter compliance when listing abroad, and curbs on information monopolies and the gathering of personal data. Companies must restructure their financial wings into holding companies as part of a broad effort to subject themselves to more rigorous supervision, and sever “improper links” between their existing payments services and financial products, regulators said in a statement.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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