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REWIND: International Business News #30

Posted on July 9th, 2012 | Author:

  • The tablet wars look to be heating up.  Following Google’s reveal of the Nexus 7 last week, sources within Apple indicate that the company plans to introduce a smaller and cheaper version of the iPad by the end of the year.   The announcement of the Nexus 7 garnered attention as the device aims to combine the sleekness and user experience of the iPad at a price—about $200 compared to iPad’s starting price of $500—and size—7 inches compared to iPad’s 9.7 inches—to rival Amazon’s Kindle Fire.  The smaller iPad will supposedly have a similar size and price point to the Nexus and Fire, but would come with the benefit of having the numerous apps tailored for the iPad.  Microsoft has also announced that it will be releasing a Windows 8-based tablet, the Surface, later this year.
  • Rupert Murdoch announced that the News Corporation would be separated into two companies.  One company, which would include newspapers such as the Wall Street Journal, the New York Post, and the Times of London, will be focused on the publishing businesses, while the other, comprising of companies such as FX, Fox News, and 20th Century Fox, would be focused on entertainment.  Analysts speculate that the decision may have been motivated by the desire to protect the entertainment arm from the fallout of the UK phone-hacking scandal which has affected the news businesses.  Murdoch would serve as chairman of both companies and the chief executive of the newly formed entertainment company.  In addition, current News Corp. shareholders would receive one share of common stock in the new company for each share they hold in the current company, and both companies would maintain a dual-class share stock structure.  This structure would enable the Murdoch family to maintain control of 40 percent of the voting power.
  • Pharmaceutical giant GlaxoSmithKline pled guilty to criminal charges and will pay a $3 billion fine, in the largest health care fraud settlement in US history.  Among other charges, the Department of Justice accused GSK of promoting Paxil and Wellbutrin, two of the company’s antidepressants, for unapproved uses and for failing to report safety data about its top diabetes drug, Avandia.  The investigation was spurred by claims made by four GSK employees who raised questions about the company’s drug marketing and promotion practice, including misreporting data from clinical trials and paying for luxurious gifts to encourage doctors to prescribe the drug.
  • The small nation of Cyprusassumed the presidency of the European Union this week.    The country, which joined the EU in 2004 and the eurozone in 2008, has already begun its term with some controversy, as it asked the eurozone for a bailout to assist its banks just a week prior.  Despite, this Cyprus President Demetris Christofias has indicated that his priority for the EU will be to reach a deal on theUnion’s budget for the 2014-2020 period.
  • Japanapproved the merger of the Tokyo Stock Exchange and the Osaka Securities Exchange.  The merged entity, to be called the Japan Exchange Group, would be the world’s third largest stock exchange, and the largest exchange in Asia.  The move may have been motivated by a decline in the number of companies making their initial public offerings in Japan, as more companies turned to exchanges in China and Hong Kong.  The merger is expected to result in cost savings and a boost to Japan’s strength in the market.  Still the merger is subject to shareholder approval, and some funds have raised concerns about the structure of the new exchange.