from MacroScope:
Is U.S. economic patriotism hurting?
Any Americans believing that their country is being bought up by the Chinese might want to pay heed to a new report from the Vale Columbia Center on Sustainable International Investment. It says that China is a minimal player in terms of foreign direct investment in the United States and that Washington should in fact be doing a lot more to get it to gear up its buying.
To start with, look at the magic number. In 2010, the last year for which numbers are available, only 0.25 percent of FDI into the Untied States came from China. Switzerland, Britain, Japan, France, Germany, Luxembourg, the Netherlands, Canada were all far bigger. In the U.S. Department of Commerce's report on the year, China, numbers were so small they were lumped into a category simply called "others".
This is not enough, the Vale Columbia report says. Given China's burgeoning economic role across the globe, America can benefit from a lot:
First, FDI provides an influx of capital into the struggling economy, increasing employment at no cost to the taxpayer. Second, jobs in foreign affiliates are typically better remunerated than similar jobs in domestically owned companies. Third, keeping the US open to foreign investment demonstrates a global example for international openness. Finally, Chinese money refused by the U.S. could alternatively be directed to competitors or even the U.S.’s enemies.
(On the latter point, its worth reading our global economic correspondent Alan Wheatley's story on China's influence in Europe)
The Vale Columbia report acknowledges that Chinese FDI is controversial - primarily because a lot of Chinese companies are state-controlled and therefore raise fears that FDI may be more strategic that profit-seeking. There is also the concern about subsidies, piracy and economic espionage.
But the gains from opening the door to Chinese outweigh the risks, the report -- entitled Economic Patriotism: Dealing with Chinese direct investment in the United States -- says, recommending a series of steps such as dumping reciprocity clauses in FDI bilateral dealings.
M & A wrap: Glencore and Xstrata in mega merger talks
Xstrata and Glencore are in talks over an all-share merger that could create a combined group worth more than $80 billion, shaking up the industry with its biggest deal to date.
Glencore, the world’s largest diversified commodities trader, already owns 34 percent of mining group Xstrata and a tie-up between the two Swiss-based companies — in a deal which would trump Rio Tinto’s $38 billion acquisition of Alcan in 2007 — has long been expected, as Glencore aims to add more mines to its trading clout.
Now that Facebook has filed its hotly anticipated initial public offerings, analysts told Reuters correspondents Alexei Oreskovic and Alistair Barr that the social networking company’s honeymoon with investors may already be over.
Despite the massive IPO, CEO Mark Zuckerberg will exercise almost complete control over Facebook. Here is Zuckerberg’s letter to investors.
The graffiti artist who took Facebook stock instead of cash for painting the walls of the social network’s first headquarters made a smart bet, The New York Times says.
Venture capitalists are flocking to to China, leaving Europe behind, Deal Journal says.
M & A wrap: Can Facebook live up to the hype?
As Facebook is expected to submit paperwork to regulators for its initial public offering, Reuters Social Media Editor, Anthony De Rosa, uncovers three problems standing in the way of Facebook’s future growth.
Which exchange will Facebook choose to “friend”? Bloomberg reports NYSE and Nasdaq are competing now for what may be the biggest ever by a technology company.
European Union regulators have blocked the merger of exchange operators Deutsche Boerse and NYSE Euronext to avoid giving them a stranglehold on the European futures market. “The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide,” EU Competition Commissioner Joaquin Almunia said in a statement.
The failure of the NYSE Euronext/Deutsche Borse tie-up is a stark reminder to dealmakers that the fate of their work often rests in government hands, Deal Journal writes.
It hit a lifetime low of 26.44
And it’s MCap now is 56 billion $ odd..
Crazy.. It was too much hyped..
M & A wrap: Owners, insiders jockey ahead of LME sale
Market parties are jockeying ahead of a sale of the London Metal Exchange (LME), a deal that could radically alter the sway that banks and brokers hold over the world’s largest metals market.
Meanwhile, London Stock Exchange chief Xavier Rolet says he aims to put last year’s failed bid for Canada’s TMX Group behind him by forging ahead with plans to diversify.
Eastman Chemical is buying specialty chemical maker Solutia Inc for about $3.38 billion in cash and stock to extend its reach in emerging markets, particularly the Asia-Pacific region.
In a punishing year for hedge funds, the world’s biggest hedge fund is also one of the best performers, DealBook says. Bridgewater Associates, which manages nearly $120 billion, posted returns of 23 percent in 2011 — a year when the average hedge fund portfolio lost 5 percent, it added.
Roche Holding AG’s rivals Sanofi SA and Novartis AG see no need to match the Swiss drug maker in buying a gene-decoding business like Illumina Inc and reckon they can do partnerships instead.
M & A wrap: Illumina unveils poison pill to stave off Roche
Gene sequencing company Illumina unveiled a “poison pill” defense strategy against a hostile bid from Swiss drugmaker Roche, saying it would trigger a rights agreement if any party bought 15 percent of its stock. Roche is offering $5.7 billion in cash for Illumina.
Analysts say it is likely to be a protracted battle lasting well into 2012 based on Roche’s past deal playbook and possible regulatory hurdles. “This is going to take a while. There’s room for a protracted wait-them-out strategy as Roche puts pressure on Illumina’s board,” one arbitrageur, who declined to be named, told Reuters.
Amgen Inc, the world’s largest biotechnology company, says it would pay over $1 billion to buy Micromet Inc, which has several cancer drugs in development.
Japan is set to launch a $13 billion bailout of the stricken Tokyo Electric Power Co after the utility dropped resistance to a public fund injection, sources say. Tepco’s Fukushima plant was wrecked by a quake and tsunami last March, sparking the world’s worst nuclear crisis in 25 years. It will be one of the world’s biggest bailouts outside the banking sector.
The chief executive officers of some of Europe’s richest companies discuss takeovers at this week’s World Economic Forum amid a flood of negative economic forecasts, Bloomberg reports.
M & A wrap: Roche goes hostile for gene firm Illumina
Roche is offering $5.7 billion in cash to buy U.S. gene sequencing company Illumina Inc in an unfriendly takeover bid that marks a major play by the Swiss drugmaker into the gene technology field.
AMR Corp, the bankrupt parent of American Airlines, is the prize in a likely bidding war by rival carriers, but any merger involving the third largest U.S. airline is expected to come on its own terms and timing, Soyoung Kim and Kyle Peterson write.
Morgan Stanley’s tech team is going after a big prize — the chance to lead the much-anticipated Facebook IPO that is expected to raise $10 billion, The Wall Street Journal reports.
Hedge funds that in the last month or so have purchased an estimated $5.2 billion of beaten down Greek bonds that mature on March 20 are now trying to unload their positions, DealBook says.
The Deal Professor takes a look at efforts to study the value of private equity.
M & A wrap: NYSE-Deutsche Boerse deal faces tough vote
NYSE Euronext and Deutsche Boerse are unlikely to garner enough support from European Union commissioners to overturn a looming veto over their plan to create the world’s largest exchange, Bloomberg says, citing four people familiar with the situation.
Here are the various options open to Deutsche Boerse and NYSE Euronext ahead of the Commission’s decision.
SPX Corp plans to sell its automotive service business to Germany’s Robert Bosch GmbH for $1.15 billion in cash as the diversified U.S. manufacturer looks to focus on its fast-growing flow technology segment.
The new chief executive at Research In Motion dismissed talk of drastic change at the BlackBerry maker. “I don’t think that there is some drastic change needed. We are evolving … but this is not a seismic change,” said Thorsten Heins, who took the helm at a once-dominant smartphone company that now struggles to compete. But impatient investors say Heins has only 12 to 18 months to turn RIM around.
Oil and gas deal-making is on fire so far this year, leading all sectors as a target for mergers and acquisitions, Deal Journal quoted Dealogic as saying.
Japan’s Elpida Memory is in talks to merge with Micron Technology and Taiwan’s Nanya Technology, the Yomiuri newspaper reported, as the memory chip makers battle a weak market and well-funded South Korean rivals.
M & A wrap: Takeover talk swirls around BlackBerry maker
Takeover talk swirled around Research In Motion as investors and analysts pondered whether new Chief Executive Thorsten Heins had been appointed to lead a turnaround of the struggling phonemaker or prepare it for sale.
Here is a brief biography of Thorsten Heins, the little known insider at RIM’s helm.
Gas producer Apache is to buy privately owned oil and gas company Cordillera Energy Partners III in a cash-and-stock deal valued at $2.85 billion to expand its acreage of oil and petroleum liquid fields. The deal will give Apache access to Cordillera’s portion of Granite Wash — a geological formation that holds tight gas trapped in its sands.
Sony Corp and Fujifilm Holdings are leading contenders for an equity stake in Olympus Corp, sources familiar with the situation told Reuters, as the scandal-hit medical equipment maker moves to shore up its finances.
Time’s Joe Klein writes about the trouble with private equity.
M & A wrap: Kodak files for bankruptcy
Eastman Kodak, which invented the hand-held camera and helped bring the world the first pictures from the moon, has filed for bankruptcy protection, capping a prolonged plunge for one of America’s best-known companies. The more than 130-year-old photographic film pioneer said it had also obtained a $950 million, 18-month credit facility from Citigroup to keep it going.
Kodak is preparing to appoint a chief restructuring officer who would report to the board and could have broad powers to manage the company’s finances and operations, The Wall Street Journal reports.
BankUnited Inc’s private equity owners abruptly pulled the lender off the market after a brief sale process drew offers below expectations.
The New York Times says hedge funds may sue Greece in a human rights court if the country doesn’t make good on its bond payments.
Hedge fund titan Steven A. Cohen is once again in the spotlight over allegations of improper trading at his $14 billion SAC Capital Advisors.
The transactions that JPMorgan handled for MF Global are drawing increased scrutiny because understanding MF Global’s money flow could aid in identifying missing customer funds, people familiar with the situation told Reuters.
M & A wrap: “Chief Yahoo” resigns
Yahoo co-founder Jerry Yang has quit the company he started in 1995, appeasing shareholders who had blasted the Internet pioneer for pursuing an ineffective personal vision and impeding investment deals that could have transformed the struggling company.
Wall Street views the exit of “Chief Yahoo” Yang as smoothing the way for a major infusion of cash from private equity, or a deal to sell off much of its 40 percent slice of China’s Alibaba, unlocking value for shareholders.
Yang’s exit removes one of the last vestiges of a management team chided by investors for failing to find a buyer or negotiate a sale of stakes in Asian assets worth more than $10 billion, Bloomberg says.
Goldman Sachs Group Inc’s fourth-quarter profit fell 56 percent as trading and investment banking revenue plunged, but the bank managed to beat analysts’ expectations, which had dropped considerably in recent weeks.
How much does a Goldman employee make? Average pays at Goldman Sachs is $367,057 for 2011, that’s down 15 percent from a year ago, according to Deal Journal.
Solyndra failed to attract any bids from buyers who could have restarted production, brought back some laid off staff and kept the bankrupt solar panel maker operating.
Samsung says BlackBerry maker Research In Motion is not on its immediate shopping list.
