Biznews
Mergers & Aquisitions
AT&T acquires Time Warner
American telecommunications holding company AT&T has acquired media company Time Warner for the princely sum of USD 85.4 billion.
AT&T will pay Time Warner USD 107.5 per share. The transaction is estimated at USD 108.7 billion; of which USD 85.4 billion is the cost of acquiring the company and the remaining amount constitutes debts assumed by AT&T. It is expected that the transaction shall be closed by the end of 2017. After that, Time Warner shareholders will own from 14.4% to 15.7% of AT&T.
The company expects profit in the amount of USD 1 billion in three years after completion of the transaction.
Time Warner, which is headquartered in New York, is one of the largest world conglomerates in the news and entertainment sector. It was formed in 1990 through the merger of Warner Communications Company with printed products publisher Time Inc.
Founded in 1983, AT&T is the largest provider of both local and international telephone services in the United States, as well as one of the largest US mobile operators and Internet access providers.
Chinese company buys 25% stake in Hilton hotels
Chinese conglomerate HNA Tourism Group has reached agreement to acquire 247.5 million shares, or a 25% share of all securities of the hotel chain Hilton Worldwide Holdings Inc. from the Blackstone investment fund for USD 6.5 billion.
HNA shall pay USD 26.25 per company share, which is 15% above its market quotation at the close on 21 October and will become the largest shareholder in the well-known hotel chain.
It is expected that two representatives of Chinese company will join the Hilton Board of Directors, and that both representatives of Blackstone, including Jonathan Gray, the chairman of the Board of Directors, will retain their positions.
Hilton shares rose on Monday by 1.4%, the company capitalization is estimated at USD 22.7 billion. The company owns more than 4,700 pieces of real estate in 104 countries.
Qualcomm takes over NXP
The largest producer of chips for mobile devices, Qualcomm, is taking over the largest producer of chips for automotive industry, NXP Semiconductors, for USD 47 billion. The full amount shall be paid in cash. The deal shall help Qualcomm to diversify markets, to cut costs through synergy from the merger, and to take advantage of the semi-conductor market’s growth for car infotainment systems.
The leading producer of processors for mobile devices shall finance the deal out of available funds, but also shall attract debt capital from the banks JPMorgan and Goldman Sachs. This will add USD 11 billion to Qualcomm’s debt obligations, which it shall be able to improve quickly due to funds generated by the company abroad. There is currently more than USD 30 billion on its foreign accounts.
Qualcomm Corporation is the first one among chip suppliers that began using the “fabless” business model, where a company-developer does not have its own factories, and it is only concerned with development and sale of chips. Popular processors for wireless communication by Qualcomm, used in Apple and other manufacturers’ smartphones, are mainly produced at factories of Taiwan Semiconductor Manufacturing Ltd. The deal is the largest in the history of the semiconductor industry.
Regulatory
Online registration of land plots
On 12 October 2016 a new electronic service for on-line registration of land plots was introduced in Ukraine. Before the end of the year, this electronic service will be available for the city of Kiev and Chernigov Region in pilot mode, but from 1 January 2017 it will operate throughout Ukraine.
Registration of land plots is one of the most important and, at the same time, complex administrative services. Each year, Ukrainians register more than 500,000 land plots. Today, such registration requires two visits to state authorities, while the introduction of this service makes it possible to eliminate the first visit, and it will only be necessary to receive documents after registration of a land plot.
From now on, one may apply for registration of a land plot in on-line mode via e.land.gov.ua in the space of a few minutes. Furthermore, due to automation, the process for considering an applicant’s documents and the relevant decision-making is greatly accelerated.
A reminder that before the end of 2016 three more e-services in the land sector are planned for introduction.
Banking & Finance
Chinese Yuan officially became an IMF reserve currency
The Chinese Yuan has been officially included in the calculation of Special Drawing Rights (SDR) basket of the International Monetary Fund (IMF). The decision, adopted almost a year ago, came into force on 1 October.
The currency was immediately ranked third out of five according to its specific weight in the basket. Now the latter looks as follows: 41.73% — USD, 30.93% — EUR, 10.92% — Yuan, 8.33% — Japanese Yen, 8.09% — GBP. The EUR lost most of its weight as compared with previously stated values.
It was decided to include Yuan, taking into consideration the growing participation of China in the world economy.
Development of energy infrastructure
The Ministry of Finance and German government-owned development bank KfW have signed a loan agreement of EUR 150 million for development of the energy infrastructure.
The funds will be spent on restoration of four transformer sub-stations that cover five regions with a total population of about 14 million Ukrainians.
These EUR 150 million are part of the loan package of EUR 500 million, which was agreed with Germany at the start of 2015. In two years Ukraine received EUR 200 million of the total package of EUR 500 million.
NBU reduces bank rate to 14% per annum
The National Bank of Ukraine has adopted a decision to reduce the bank rate by 1% point, or to 14% per annum from 28 October. The next meeting of the Board of the NBU on monetary policy will take place on 8 December.
The National Bank cut its bank rate by 0.5% points from 16 September – to 15% per annum, taking a decision to reduce bank rate for the fifth month in a row. The maximum historical value of the NBU bank rate at 30% per annum was in force from 4 March to 28 August 2015.
Economic discussion
Industrial revolution depends on innovations
On 6-7 October the Third Kiev Economic Forum was held with the outlook on the Fourth Industrial Revolution. The venue traditionally brings together star economists and reform-makers, businessmen and investors. The important message from the foreign community was advice not to copy and paste the road map of reforms of particular countries.
Grzegorz Kolodko, former Polish Minister of Finance, noted that even the positive experience of Poland may not work in contemporary Ukraine. Representatives of the Ukrainian government signaled state encouragement of foreign investment and announced the establishing of an investment support office. It was admitted that there is a gap between inventing innovations and implementation in the economy. Big potential is considered in those niches where Ukrainian innovations could ensure a rapid growth point. Another gap is certainly present in the outdated system of education, as a new paradigm is wanted here.
