Norris McLaughlin & Marcus, P.A.

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REWIND: International Business News #49

Posted on December 21st, 2012 | Author:

  • A symbol of the American markets, the New York Stock Exchange has entered into an agreement to be bought by Atlanta-based Intercontinental Exchange for $8.2 billion.  Unlike NYSE Euronext’s proposed deal with Deutsche Borse or Intercontinental’s bid to purchase the NYSE with Nasdaq OMX Group, Inc., the deal between NYSE and Intercontinental is expected to face less regulatory hurdles as both exchanges have different focuses.  NYSE concentrates on stocks and derivatives, while Intercontinental focuses on trading commodities and so is less likely to face antitrust inquiries.  The deal is projected to be completed in the latter half of 2013, and is expected to save the exchanges approximately $450 million.
  • General Motors Co. announced its intention to purchase $5.5 billion of its stock back from the United States government at the price of $27.50 per share. The purchase is expected to take place over the next 12 to 15 months and will reduce the government’s ownership stake from 26% to 19%. While it is not clear that the U.S. government will be able to recoup its investment in the GM bailout, as it needs to sell its shares for an average price of around $50, the reduction of the government’s stake in GM was well received by the markets and potential investors who had been wary of the government’s ownership role in the automaker.  In addition as a result of the sale, certain restrictions placed on GM’s management, such as limitations on buying corporate aircrafts, will be lifted.
  • In a bid to get itself out of bankruptcy, Eastman Kodak Co. has agreed to sell approximately 1,100 of its patents.  The digital imaging patents will sell for $525 million and allows the company to satisfy a condition of an $830 million financing facility.  The sale will be to consortium, Intellectual Ventures, LLC, which will in turn license the patents to some of the world’s largest technology companies such as Microsoft, Amazon.com, Samsung, Apple, Google, Facebook, and Fujifilm.  Following its emergence from bankruptcy, Kodak is expected to shift its focus on its commercial printing and imaging markets.
  • South Korea elected its first female President, conservative party member Park Geun Hye, defeating her rival Moon Jae-in.   Park, whose father ruled South Korea as a military dictator from 1961 to 1979, has pledged to reign in the chaebol, the business conglomerates, such as Samsung, that are a large portion of the country’s economy, but whose expansion South Koreans have felt have led to widening income gaps; improve the country’s social safety net; and strengthen relations with North Korea. Upon news of Park’s election, the country’s construction and insurance stocks rose.