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REWIND: International Business News #56

Posted on February 8th, 2013 | Author: Oren M. Chaplin

  • Liberty Global Inc. is set to acquire Virgin Media Inc. for$16 billion. The two companies will represent a strong competitor in the UK to British Sky Broadcasting Group PLC. The consideration for the transaction is believed to be structured as part cash ($47.87 per share of Virgin Media) and part stock. Virgin already holds a strong UK position with nearly 5 million pay-television customers. The two companies “said they expect about $180 million in annual cost savings once the companies are fully integrated”, noting that they already have many existing synergies “coming from areas like network and IT and procurement.”
  • Changes are coming early to the Bank of Japan. Governor Masaaki Shirakawa will step down from his post 3 weeks before his term concludes on April 8. Japan’s Liberal Democratic Party has criticized Gov. Shirakawa over his monetary policy since the party gained power in late 2012. With Japan’s economy stagnating, his successor will be at a crossroads where each decision will likely have far reaching consequences on the future of Japan’s economy. Candidates for the position include Toshiro Muto, Chairman Daiwa Institute of Research, Haruhiko Kuroda President, Asian Development Bank, and Kazumasa Iwata, President, Japan Center for Economic Research.   Professionals are already expecting the Bank to change course to a more “aggressive monetary policy.” The markets have already reflected a strengthening of the Japanese currency since news of the change emerged.
  • The SEC is positioned to impose a fine on Nasdaq OMX Group in an amount that could rise to $5 million. The fine arises out of allegations that the company “provided market data to some customers ahead of others, giving clients on customized feeds and edge”. At issue are the circumstances surrounding the Facebook IPO. “The day of Facebooks’ IPO, Nasdaq’s systems got caught in a loop while lining up orders before the social-networking company’s shares started trading. The opening of trading in Facebook shares was stalled by half an hour. For almost three hours more, Nasdaq failed to send order confirmations to brokers, causing uncertainty about who held what positions.” Those problems highlight a concern over Nasdaq’s lack of system-wide controls. In addition the fine, Nasdaq faces additional payment obligations from customers that are related to their losses that were incurred also in the process of the IPO.