Weekly Bulletin, January 16, 2012
Forbes' List of the Top 30 Social Entrepreneurs
Darell Hammond read a Washington Post article about children who suffocated while playing in an abandoned car because they had nowhere else to play. Willy Foote met vanilla farmers in Mexico who didn’t have access to credit and couldn’t connect to markets. Sara Horowitz was working at a lawyer, didn’t qualify for health insurance because she was considered a “freelancer,” and started thinking about other people who faced the same problem. While working in Argentina, Linda Rottenberg wondered why more Latin American entrepreneurs didn’t create global companies.
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FORBES: Outlook 2012
Every new year offers an opportunity to start fresh, and it's easiest to make the most of that fresh start if we know what lies on the road ahead. This year, read expert advice on what to expect in 2012 and how to make – and keep – your financial resolutions. From the "10 Financial Questions You Need To Ask Yourself In 2012" to "The IPO Class Of 2012," our Outlook 2012 feature will get you ready for a happy and financially healthy new year.
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Novartis to Cut Jobs, Take Charge on Diovan, Tekturna
By Thomas Mulier and Simeon Bennett, Bloomberg, Jan 13, 2012
Novartis AG (NOVN) will cut 1,960 jobs in the U.S. and take $1.22 billion of charges to prepare for generic competition to its best-selling blood pressure pill Diovan and lower sales potential of the Tekturna drug.
Novartis will take a charge of $900 million in its fourth quarter 2011 results related to Tekturna, and a charge of $160 million to end research on two experimental drugs, the Basel, Switzerland-based company said in a statement today. The job cuts will lead to a charge of $160 million in the first quarter of 2012 and annual savings of $450 million by 2013.
Chief Executive Officer Joe Jimenez has been reducing costs since he took the job in February 2010. He has also been trying to boost sales from specialist-prescribed drugs, such as the multiple sclerosis pill Gilenya and the cancer drug Afinitor, to replace revenue from Diovan, which lost patent protection in Europe last year and will do so in the U.S. in September.
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Apple IPhone Sales in China Stores Suspended
By Bloomberg News, Jan 13, 2012
Apple Inc. (AAPL), whose skill at hyping new products helped make it the world’s most valuable technology company, became a victim of its own success after a botched introduction of its iPhone 4S in China led it to suspend sales.
Would-be customers who waited overnight as temperatures dropped below minus 9 degrees Celsius reacted with fury after the company’s main store in Beijing’s Sanlitun district failed to open. The company sold out of the handsets at stores that did open and later halted sales of all iPhones at its five retail outlets in the country “for the time being,” spokeswoman Carolyn Wu said by phone.
Apple had advertised that the store would open at 7 a.m. At 7:15 a.m., people began chanting “Open the door!” and “Liars!” after an unidentified man said over a bullhorn that the phone wouldn’t go on sale today, without giving an explanation. The store stayed closed “for safety reasons,” Wu said. Beijing police temporarily cordoned off the shop after it was pelted with eggs by the crowd.
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Toyota Camry under Siege from Tougher Rivals
By David Welch and Alan Ohnsman, Bloomberg, Jan 12, 2012
Toyota Motor Corp. (7203) survived a massive recall two years ago and the effects of Japan’s tsunami last year. Now the company faces an unprecedented rush of competitors for its franchise car, the Camry family sedan.
The Camry, the best-selling mid-size car in the U.S. for the past 10 years, faces new family-sedan competition this year from Honda Motor Co. (7267), Nissan Motor Co., Ford Motor Co. (F) and General Motors Co. (GM) Volkswagen AG (VOW), Hyundai Motor Co. (005380) and Kia Motors Corp. have raised production of their family cars, making the market even more competitive.
Add it all up and the mid-size car market is as tough as it has ever been, even for a dominant franchise like the Camry. Family cars represent 15 percent of the U.S. market and a vital way to reach new buyers and keep them in their brands for years beyond the first purchase.
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Lenovo CEO Says Tablets Make up Niche Market Dominated by Apple
By Douglas MacMillan, Bloomberg, Jan 11, 2012
Lenovo Group Ltd. Chief Executive Officer Yang Yuanqing said there’s scant room for growth in the tablet market, and that devices running Google Inc. software -- including his company’s machines -- will keep trailing the iPad.
“Tablets will not replace the traditional” personal computer, Yang said in an interview yesterday at the Consumer Electronics Show in Las Vegas. “The traditional PC is changing to adapt to the customer requirements. The tablet is an extra market for some niche customers.”
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Microsoft Says 4Q PC Shipments Likely Fell Short
By Dina Bass, Bloomberg, Jan 11, 2012
Microsoft Corp. (MSFT), the world’s largest software maker, said industry wide sales of personal computers will probably be lower than analysts projected in the fourth quarter because supply was hurt by flooding in Thailand.
Analysts have estimated that total PC shipments fell about 1 per cent in the period, Tami Reller, chief financial officer of Microsoft’s Windows unit, said at an investment conference yesterday. The actual number is probably lower, she said. Bill Koefoed, Microsoft’s general manager of investor relations, echoed those remarks at a separate event.
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RBS Eliminates 272 Jobs at U.K. Corporate Unit Before Investment-Bank Cuts
By Howard Mustoe and Robert Hutton, Bloomberg, Jan 11, 2012
Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, will cut 272 jobs from its U.K. corporate banking unit to help reduce costs.
Employees are being informed of the reductions today, an RBS spokesman said in an interview. The cuts will be made across the U.K. and will include reductions in sales staff, managers and support personnel. RBS’s corporate unit, which lends to businesses, employs about 13,500 people which means the cuts represent about 2 percent of the total.
Tomorrow RBS will announce a plan resulting in the loss of as many as 5,000 investment banking jobs, according to two people familiar with the matter. The Irish unit, Ulster Bank, is meanwhile preparing its second round of job cuts in four years as part of an effort to save about 50 million euros ($63.9 million), according to two people with knowledge of the plan today.
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Gamesa Opens Wind Power Blade-Manufacturing Factory in India
By Marc Roca, Bloomberg, Jan 11, 2012
Gamesa Corp. Tecnologica SA, Europe’s second-largest wind-turbine maker, opened a turbine blade-manufacturing plant in India as part of a plan to boost production in the wind energy market.
The company, with about 30 factories worldwide, started production at Vadodara in the western state of Gujarat after an investment of 25 million euros ($32 million), it said today in a statement. The facility, which created 157 jobs, will primarily supply India’s northern states.
The factory is part of a 60 million-euro investment plan announced by Zamudio, Spain-based Gamesa in March to strengthen its manufacturing base in India to tap rising demand in the country’s wind market. India now accounts for 20 percent of the megawatts it sells around the world after almost tripling in a year, it said.
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Sanofi CEO Is Open to Deals of Up to $2.6 Billion This Year
By Albertina Torsoli and Robert Langreth, Bloomberg, Jan 11, 2012
Sanofi, the French drugmaker that bought Genzyme Corp. of the U.S., is planning “bolt-on” acquisitions of up to 2 billion euros ($2.6 billion) this year, Chief Executive Officer Chris Viehbacher said.
Viehbacher, who defines his acquisition strategy as a “string of pearls,” will keep on adding “more pearls” going forward, the 51-year-old executive said in an interview in San Francisco today.
Paris-based Sanofi will stick to transactions “in the order of 1 billion to 2 billion euros per year,” Viehbacher said. “It’s not a budget. I am pretty happy with the shape of the company. All we want to do is continue to look for opportunities, particularly in emerging markets.”
Sanofi is interested in countries that “aren’t everybody’s focus,” beyond China and India, Viehbacher said. It’s also looking for deals to grow in animal healthcare, he said, declining to name specific targets.
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Life Technologies Rises Most Since 2009 on New Gene-Sequencing Machine
By Michelle Fay Cortez and Robert Langreth, Bloomberg, Jan 10, 2012
The race to parse the building blocks of life has accelerated with competing reports from Life Technologies Corp. (LIFE) and Illumina Inc. (ILMN) that they’ve built machines that can sequence a genome in a day, rather than weeks or months.
The announcement boosted Life Technologies 8.3 per cent to $46.17 at the close in New York, the biggest single-day jump in almost three years. Illumina rose 3.7 per cent to $33.01.
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Bristol Inhibitex Purchase Won’t Be Last as Loss of Three Top Drugs Looms
By Drew Armstrong and Meg Tirrell, Bloomberg, Jan 9, 2012
Bristol-Myers Squibb Co. (BMY), the drug maker that will lose patent protection for three of its top four drugs within three years, will follow its $2.5 billion Inhibitex Inc. (INHX) purchase with more deals as the company’s “string of pearls” acquisition strategy begins to pay off.
Bristol-Myers is satisfied the plan is working and is in “a very good financial position” to pursue it further, said Chief Financial Officer Charles Bancroft by telephone yesterday. The company had $8.2 billion in cash and equivalents in the third quarter of 2011, according to data compiled by Bloomberg.
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