Tag Archives: Real Estate Markets

UK watchdog to clamp down on insurance loyalty penalties

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LONDON, Feb 18 (Reuters) – Britain’s Financial Conduct Authority said on Tuesday it was finalising “remedies” to stop home and car insurance companies penalising loyal customers.

The watchdog said the “loyalty penalty” cost longstanding customers an extra 1.2 billion pounds ($1.56 billion) in 2018.

More than four in five adults in Britain have one or more insurance products, and consumers who stay with their existing insurer at renewal almost always pay higher premiums than those who switch or negotiate, the FCA said in Sector Views, its annual review of key concerns for the year ahead.

The FCA also said high-risk retail investment products were exposing consumers to more risk than they can absorb, the FCA said.

“Some of the highest-risk products are often marketed directly to retail consumers with poor communication of the risks involved and implications that the investments are regulated, when this is not the case,” it added.

Many new payments firms had been able to enter the market and grow quickly, and some of their products had offered no protection for consumers.

Sector Views are used by the FCA to shape its business plan for the coming financial year and determine whether to open new market investigations and use its powers to intervene.

$1 = 0.7696 pounds
Reporting by Huw Jones; editing by John Stonestreet

Our Standards:The Thomson Reuters Trust Principles.

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Oil rises to three-month excessive on upbeat information, Center East rigidity

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LONDON (Reuters) – Oil costs rose to three-month highs on Monday, underpinned by optimism over an anticipated China-U.S. commerce deal and upbeat industrial information, whereas merchants saved an in depth watch on the Center East following U.S. air strikes in Iraq and Syria.

FILE PHOTO: An oil pump is seen simply after sundown outdoors Saint-Fiacre, close to Paris, France September 17, 2019. REUTERS/Christian Hartmann

Brent crude futures LCOc1 had been up 0.9% at $68.75 a barrel, up 59 cents. The worldwide benchmark has risen round 27% in 2019.

West Texas Intermediate (WTI) crude futures CLc1 rose 22 cents or 0.2% to $61.94 a barrel by 0940 GMT. The U.S. benchmark is up about 36% to date this yr.

“Oil costs have reached their highest stage for the reason that Saudi oilfield assault in mid-September”, stated market analyst Margaret Yang of CMC Markets.

Regardless of a the comparatively low value positive factors regardless of an array of bullish elements, Yang added: “Merchants are additionally cautious about profit-taking prospects.”

Tensions within the Center East have flared up as america carried out air strikes on Sunday towards the Kataib Hezbollah militia group, whereas protesters in Iraq on Saturday briefly compelled the closure of its southern Nassiriya oilfield.

In the meantime, Libyan state oil agency NOC stated it’s contemplating the closure of its western Zawiya port and evacuating workers from the refinery because of clashes close by.

Oil costs had been additionally supported by declining U.S. crude shares, which fell by 5.5 million barrels within the week to Dec. 20, far exceeding a 1.7-million-barrel drop forecast in a Reuters ballot.

In China, manufacturing unit exercise had probably expanded once more in December on stronger exterior demand and an infrastructure push at dwelling though the tempo of progress is about to ease as markets await extra certainty on a U.S.-China commerce truce, a Reuters ballot confirmed.

China’s Commerce Ministry stated it’s in shut contact with america on the signing of a long-awaited commerce deal.

The 2 international locations on Dec. 13 introduced a “Part one” settlement that reduces some U.S. tariffs in alternate for what U.S. officers stated can be a giant bounce in Chinese language purchases of American farm merchandise and different items.

Some analysts, nevertheless, cited ample international crude shares as a serious impediment in 2020 to efforts to rein in output by the Group of the Petroleum Exporting International locations and its allies like Russia.

“At the same time as OPEC and its non-OPEC companions endeavor to make further provide cuts in Q1 2020, we’re not satisfied this will likely be enough to avert giant international stock,” stated Harry Tchilinguirian, international oil strategist at BNP Paribas.

“We stay of the opinion that oil fundamentals proceed to current draw back threat.”

Extra reporting by Seng Li Peng, modifying by Louise Heavens

Our Requirements:The Thomson Reuters Belief Ideas.

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China’s indebted HNA group names chairman’s son as president: Caixin

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A HNA Group emblem is seen on the constructing of HNA Plaza in Beijing, China February 9, 2018. REUTERS/Jason Lee

SHANGHAI (Reuters) – China’s indebted HNA Group has appointed its chairman’s son as president as a part of enterprise restructuring on the finance-to-aviation conglomerate, Chinese language monetary journal Caixin reported on its web site on Saturday.

Chen Xiaofeng, son of HNA Chairman Chen Feng, has been appointed president of the group, changing Zhang Ling, in accordance with Caixin.

HNA’s official web site named Chen Xiaofeng as president, in addition to a member of the board. Chen, a graduate of the College of Washington, can be chairman and CEO of HNA’s North American unit, in accordance with the web site.

Chen Feng has been HNA’s sole chairman after Wang Jian, the group’s co-chairman, died throughout a enterprise journey in France in July, 2018.

Since final 12 months, HNA has been ramping up gross sales of its property to stave off an intensifying money crunch as Beijing curbs abroad enlargement by personal corporations. By way of asset disposals, HNA is paring again an empire that when unfold from Deutsche Financial institution (DBKGn.DE) to Hilton Worldwide (HLT.N).

Reporting by Samuel Shen and John Ruwitch

Our Requirements:The Thomson Reuters Belief Ideas.

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Paddy Energy and Poker Stars house owners to create on-line playing chief

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DUBLIN (Reuters) – The house owners of Paddy Energy Betfair and Poker Stars have agreed to merge in an all-share deal that may create the world’s largest on-line betting and playing firm by income to reap the benefits of the opening up of U.S. markets.

FILE PHOTO: Paddy Energy emblem is seen behind a keyboard and playing cube on this illustration taken in Sarajevo, September 10, 2015. REUTERS/Dado Ruvic/File Photograph

Flutter Leisure (FLTRE.I), previously generally known as Paddy Energy Betfair, is to mix with Nasdaq- and Toronto-listed Stars Group Inc (TSG) (TSGI.TO), proprietor of Poker Stars, the businesses mentioned on Wednesday.

Following the merger, shareholders of Flutter would personal roughly 54.64% of the brand new firm, with TSG shareholders proudly owning about 45.36%.

The merger is the most recent in a sequence of offers because the trade responds to the rising variety of gamblers utilizing on-line and cellular gadgets and the chance created by the comfort of guidelines on sports activities betting in the USA.

Shares in Flutter jumped 15 p.c in early buying and selling, whereas playing rivals GVC (GVC.L) and William Hill (WMH.L) had been additionally lifted by the prospect of additional consolidation.

Mixed annual revenues would have totaled 3.eight billion kilos ($4.7 billion) in 2018, making Flutter-TSG the most important on-line betting and gaming operator globally, the businesses mentioned.

Flutter CEO Peter Jackson, who will retain his function within the mixed group, mentioned the deal would “turbocharge” Flutter’s current technique and “present world-class capabilities throughout sports activities betting, gaming, every day fantasy sports activities and poker, in addition to higher geographical and product diversification.”

The merged group can have its headquarters in Dublin and its major itemizing in London.

FOX BACKING

The merged group shall be boosted by a partnership in the USA with FOX Sports activities, which can have the fitting to amass an 18.5% stake in Flutter’s FanDuel U.S. enterprise from 2021.

Dublin-based Flutter merged its U.S. enterprise with fantasy sports activities firm FanDuel final yr in a deal it mentioned would create the trade’s largest on-line enterprise in the USA.

TSG had bolstered its British operations final yr when it purchased Sky Betting & Gaming in a $4.7 billion deal.

Flutter has sharpened its concentrate on North America as the doubtless large U.S. market opens up and it faces increased taxes and elevated rules in its major British, Irish and Australian markets.

Betting trade Betfair and Paddy Energy, which runs excessive road betting outlets in addition to a web based enterprise, merged in 2016, though the mixing took longer than anticipated and a toll on product funding for a time.

The merger is predicted to ship pretax value synergies of 140 million kilos per yr, together with alternatives to cross-sell merchandise to 1 one other’s clients in worldwide markets and decrease finance prices, the businesses mentioned.

The deal can be anticipated to spice up Flutter’s underlying earnings per share by at the very least 50 p.c within the first full monetary yr following completion.

Beneath the phrases of the merger, TSG shareholders shall be entitled to 0.2253 new Flutter shares for every TSG share.

Reporting by Graham Fahy; Modifying by Muralikumar Anantharaman and Mark Potter

Our Requirements:The Thomson Reuters Belief Ideas.

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SoftBank turns towards WeWork’s dad or mum CEO Neumann: sources

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(Reuters) – Japan’s SoftBank Group Corp (9984.T), the largest investor in WeWork proprietor The We Firm, is exploring methods to exchange Adam Neumann as chief government of the U.S. office-sharing start-up, 4 folks aware of the matter mentioned on Sunday.

FILE PHOTO: Adam Neumann, CEO of WeWork, speaks to visitors throughout the TechCrunch Disrupt occasion in Manhattan, in New York Metropolis, NY, U.S. Might 15, 2017. REUTERS/Eduardo Munoz -/File Photograph

The uncommon showdown between SoftBank and considered one of its largest investments comes after We Firm postponed its preliminary public providing (IPO) final week, following pushback from perspective traders, not simply over its widening losses, but additionally over Neumann’s unusually agency grip on the corporate.

This was a blow for SoftBank, which hoped for We Firm’s IPO to bolster its income because it seeks to woo traders for its second $108 billion Imaginative and prescient Fund. It invested in We Firm at a $47 billion valuation in January, but inventory market investor skepticism led to the startup contemplating a possible valuation within the IPO earlier this month of as little as $10 billion, Reuters reported.

Administrators on We Firm’s seven-member board which are aligned with SoftBank are deliberating learn how to exchange Neumann as CEO, the sources mentioned. Benchmark Capital, one other huge investor in We Firm, would additionally like Neumann to step apart, one of many sources mentioned.

No problem to Neumann has but been tabled, the sources mentioned. A We Firm board assembly to debate Neumann’s future might be held as early as this week, one other of the sources mentioned.

One possibility that SoftBank is contemplating is asking Neumann to develop into interim CEO whereas a headhunting agency is employed to search out an exterior alternative, the primary supply mentioned.

The sources requested to not be recognized as a result of the matter is confidential. We Firm and SoftBank declined to remark, whereas Neumann and Benchmark Capital couldn’t be instantly reached for remark. The Wall Avenue Journal first reported on SoftBank exploring methods to exchange Neumann as CEO.

As co-founder of the We Firm, Neumann holds particular voting shares that allow him to dismiss dissident board administrators and shoot down any problem to his authority. Nonetheless, SoftBank may select to not again We Firm’s IPO or present it with extra funding. It has already funded the cash-burning start-up to the tune of $10 billion, and was discussing committing one other $1 billion to the IPO.

We Firm mentioned final week it’s aiming to develop into a publicly traded firm by the tip of the 12 months.

In an indication of the deteriorating relations between SoftBank and WeWork, Neumann didn’t take part in a gathering of executives of corporations backed by SoftBank that occurred in Pasadena, California, final week and was organized by SoftBank CEO Masayoshi Son, based on two folks aware of the matter.

Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; Extra reporting by Greg Roumeliotis in new York and Rishika Chatterjee in Bengaluru; Modifying by Sonya Hepinstall and Daniel Wallis

Our Requirements:The Thomson Reuters Belief Ideas.

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Divided Fed set to chop rates of interest this week, however then what?

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SAN FRANCISCO (Reuters) – Deep disagreements inside the Federal Reserve over the financial outlook and the way the U.S. central financial institution ought to reply is not going to cease policymakers from chopping rates of interest at a two-day assembly that begins on Tuesday.

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell testifies earlier than a Senate Banking, Housing and City Affairs Committee listening to on the “Semiannual Financial Coverage Report back to Congress” on Capitol Hill in Washington DC, U.S., July 11, 2019. REUTERS/Leah Millis/File Photograph

Whereas an oil worth spike after assaults on Saudi Arabian oil amenities over the weekend added to the checklist of dangers dealing with an financial system already slowed by ongoing commerce tensions and world weak spot, the deep divide evident across the Fed’s policymaking desk means additional charge cuts could possibly be removed from a accomplished deal.

At one finish of the Fed’s large boardroom sit St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari, who’re anticipated to argue for a steep discount in borrowing prices to counter low inflation and an inverted Treasury yield curve.

Pushback from the alternative finish is prone to come from Cleveland Fed President Loretta Mester, who opposed the Fed’s charge minimize in July, and Philadelphia Fed President Patrick Harker, who solely reluctantly supported it and says he needs to depart charges the place they’re “to see how issues play out.”

Fed Chair Jerome Powell, seated halfway down the desk, faces the fragile activity of taking over board these views and the disparate arguments of the opposite dozen policymakers to construct consensus.

(To chop or to not minimize? right here)

(Communications breakdown: right here)

A high problem: making sense of financial information that means the U.S. manufacturing trade could also be contracting and inflation stays weak, at the same time as households proceed to spend and employers total are including loads of jobs.

“The discord is extraordinarily seen,” mentioned Gregory Daco, chief U.S. economist at Oxford Economics. “Should you take a look at the financial system right now, you take a look at an financial system that’s bifurcated … The important thing query is whether or not that weak spot seeps by means of the financial system, and whether or not that’s aggravated.”

For the reason that Fed’s 8-2 resolution to chop charges in July, a transfer that Powell referred to as a ‘mid-cycle’ adjustment, the financial information has delivered combined indicators.

Sturdy retail gross sales and continued wage progress might add to Boston Fed President Eric Rosengren’s confidence that present financial circumstances don’t justify additional coverage easing. He dissented within the July coverage resolution.

The continuing U.S.-China commerce battle makes Dallas Fed President Robert Kaplan amongst others involved about slowing manufacturing unit output and a slide in enterprise funding. Kaplan supported July’s charge minimize.

‘MIXED OPINION’

The latest wild card to consider to the talk emerged unexpectedly in Saturday’s assaults on the Saudi oil amenities, which triggered the most important spike in oil costs in additional than 20 years. [nL5N2674W4][nL5N2672I3]

Fed officers might see the event both as a danger to an already fragile progress outlook, which might help the case for extra easing, or as a fine addition to inflation, which might again a case for standing nonetheless for now.

Merchants of futures contracts tied to the Fed’s coverage charge have been pricing in, as of Monday afternoon, a 65.8% probability that the central financial institution would minimize its benchmark in a single day lending charge by 1 / 4 of a proportion level to a variety of 1.75% to 2% on Wednesday.

And although the conviction for additional charge hikes has softened since final week, merchants total proceed to anticipate yet another discount in borrowing prices by the tip of the yr.

“If everybody was on the identical web page on the Fed I might perceive it,” mentioned Lee Ferridge, head of macro technique for North America at State Road World Markets.

“However clearly there’s disagreement on the Fed … If the Fed may be very cut up and Powell can’t give a powerful sign, doesn’t that indicate only a few strikes are possible, reasonably than these dramatic cuts?”

Fed policymakers will deliver to the assembly their very own views of the place charges ought to be by December. In June, the final time they printed their forecasts, about half of policymakers anticipated a complete of two charge cuts this yr; about half thought no charges can be applicable.

That divide within the so-called Fed “dot plot” has borne little relation to how coverage has truly formed up, but it surely might add to confusion over the speed outlook after the conclusion of this week’s assembly.

With extra dovish policymakers like Bullard, Kashkari and Chicago Fed President Charles Evans calling for extra easing, and extra hawkish policymakers like Mester, Harker and Kansas Metropolis Fed President Esther George extra skeptical, “anticipate the 2019 dots to mirror this combined opinion,” mentioned Jefferies economist Ward McCarthy.

Reporting by Ann Saphir; Enhancing by Dan Burns and Paul Simao

Our Requirements:The Thomson Reuters Belief Ideas.

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OxyContin maker Purdue Pharma information for chapter safety

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NEW YORK (Reuters) – OxyContin maker Purdue Pharma LP filed for chapter safety Sunday evening, succumbing to stress from greater than 2,600 lawsuits alleging the corporate helped gasoline the lethal U.S. opioid epidemic.

Purdue’s board met Sunday night to approve the long-expected chapter submitting, which the corporate is pursuing to restructure below phrases of a proposal to settle the widespread litigation.

Purdue, which filed for Chapter 11 safety in a federal chapter courtroom in White Plains, New York, reached a tentative deal to resolve lawsuits with 24 states and 5 U.S. territories, in addition to lead legal professionals for greater than 2,000 cities, counties and different plaintiffs, the corporate mentioned.

Two dozen states stay opposed or uncommitted to the proposed settlement, setting the stage for contentious authorized battles over who bears accountability for a public well being disaster that has claimed the lives of almost 400,000 individuals between 1999 and 2017, in accordance with the most recent U.S. knowledge.

Hundreds of cities and counties, together with almost each state, have sued Purdue and, in some circumstances, its controlling Sackler household. The lawsuits, in search of billions of {dollars} in damages, declare the corporate and household aggressively marketed prescription painkillers whereas deceptive docs and sufferers about their dependancy and overdose dangers.

Purdue and the Sacklers have denied the allegations.

Opposing states, together with Massachusetts, New York and Connecticut, need the Sacklers to ensure extra of their very own cash will go towards a settlement, and have questioned Purdue’s calculations valuing the general deal at greater than $10 billion.

The Sacklers, who would cede management of Purdue within the proposed settlement, have supplied $three billion in money and an extra $1.5 billion or extra by way of the eventual sale of one other firm they personal, known as Mundipharma, in accordance with the corporate and folks aware of the phrases. The Sacklers have declined to revise their supply.

“That is the fork within the highway. There are solely two methods to go from right here,” mentioned Purdue Chairman Steve Miller in an interview with Reuters.

Miller mentioned Purdue plans to argue to opposing states that preventing the proposed settlement will doubtless end in protracted litigation, growing authorized charges and depleting worth that might be steered to U.S. communities reeling from opioid abuse. He described chapter proceedings because the “finest hope for finalizing and implementing a worldwide decision to this litigation.”

In an announcement, members of the Sackler household controlling Purdue mentioned they hoped these opposing the present settlement supply would ultimately change their minds.

FILE PHOTO: Bottles of prescription painkiller OxyContin tablets, made by Purdue Pharma LP, are seen on a counter at an area pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey

“It’s our hope the chapter reorganization course of that’s now underway will finish our possession of Purdue and guarantee its property are devoted for the general public profit,” the household mentioned.

The result of Purdue’s tried chapter reorganization and settlement negotiations will assist decide how a lot cash U.S. communities obtain from the corporate and the Sacklers to deal with hurt from opioids. A reorganization and settlement would in the end should be permitted by a U.S. chapter choose.

States suing the Sacklers, together with a number of over the previous week, allege the household improperly reaped billions of {dollars} from opioid gross sales regardless of information of their dangerous results. The Sacklers, a few of whom beforehand served on the Purdue’s board and are well-known rich philanthropists, have denied the allegations.

Purdue’s proposed settlement envisions it changing into a belief that might contribute to U.S. communities, at little or no value, tens of thousands and thousands of doses of medicine the corporate developed to fight opioid overdoses and dependancy, the corporate mentioned.

Purdue values the medication at $4.45 billion over a decade, the individuals aware of the matter mentioned. Underneath the proposal’s phrases, the restructured Purdue could be completely sure by so-called injunctive aid, which incorporates restrictions on the promotion and sale of opioids.

States opposing the settlement supply have vowed to battle makes an attempt by Purdue and the Sacklers to make use of chapter proceedings to comprise the litigation.

On Friday, New York Lawyer Basic Letitia James mentioned she uncovered roughly $1 billion in wire transfers “between the Sacklers, entities they management and completely different monetary establishments, together with those who have funneled funds into Swiss financial institution accounts.”

The knowledge, in information an unnamed monetary establishment produced in response to a subpoena from James’s workplace, detailed monetary transfers involving former Purdue board member Mortimer D.A. Sackler, in accordance with courtroom paperwork her workplace filed.

He allegedly used shell firms “to shift Purdue cash by way of accounts world wide after which conceal it in no less than two separate multimillion-dollar actual property investments again right here in New York, sanitized (till now) of any readily-detectable connections to the Sackler household,” a lawyer in James’ workplace mentioned in one of many courtroom filings.

“There’s nothing newsworthy about these decade-old transfers, which had been completely authorized and acceptable in each respect,” a spokesman for Mortimer D.A. Sackler mentioned in an announcement.

“This can be a cynical try by a hostile AG’s workplace to generate defamatory headlines to attempt to torpedo a mutually useful settlement that’s supported by so many different states and would end in billions of {dollars} going to communities and people throughout the nation that need assistance,” the assertion added.

FILE PHOTO: Bottles of prescription painkiller OxyContin tablets, made by Purdue Pharma LP sit on a counter at an area pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey/File Photograph

Purdue, in the meantime, plans to ask a chapter choose to halt lively litigation so it could negotiate a closing settlement, the individuals mentioned. However the firm is making ready for states to argue their lawsuits can’t be halted by a Chapter 11 submitting as a result of their authorized actions had been delivered to implement public well being and security legal guidelines – exempting them from the standard chapter guidelines that might cease their complaints.

One other thorny authorized query entails the Sacklers and below what circumstances Purdue may use chapter legislation in an try and additionally halt lawsuits in opposition to them.

These authorized skirmishes may take a while to develop, as Purdue initially should search courtroom approval to proceed paying workers and tackle routine working bills.

Reporting by Mike Spector; modifying by Edward Tobin and Stephen Coates

Our Requirements:The Thomson Reuters Belief Ideas.

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Huawei unveils new OS to be used in smartphones, different units

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FILE PHOTO: A Huawei gadget is pictured within the Manhattan borough of New York, New York, U.S., July 22, 2019. REUTERS/Carlo Allegri/File Picture

DONGGUAN, China/HONG KONG (Reuters) – Huawei Applied sciences [HWT.UL] unveiled on Friday its proprietary working system to be used in smartphones and different units, as U.S. commerce curbs imposed in Could threaten to chop the Chinese language agency’s entry to essential U.S. applied sciences akin to Android.

“Concord OS is totally totally different from Android and iOS,” stated Richard Yu, head of Huawei’s client enterprise group, referring to working programs developed by Alphabet Inc’s (GOOGL.O) Google and Apple Inc (AAPL.O).

“You’ll be able to develop your apps as soon as, then flexibly deploy them throughout a variety of various units,” he advised a builders’ convention held in Dongguan in southern China, the place Huawei has constructed a lavish new campus modeled after European cities.

Concord, referred to as Hongmeng in Chinese language, is prepared to be used in smartphones however Huawei prefers to stay to Android for now to help its app builders, Yu stated, including the Honor sensible display product it plans to unveil on Saturday would be the first product utilizing the Concord OS.

He stated it could be tough for Huawei to satisfy its earlier purpose of changing into the world’s largest smartphone maker by shipments this 12 months because of the U.S. curbs.

The corporate would have been capable of ship 300 million smartphones this 12 months with out such restrictions, Yu stated.

Reporting by Sijia Jiang; Enhancing by Miyoung Kim and Muralikumar Anantharaman

Our Requirements:The Thomson Reuters Belief Rules.

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Lockheed Martin to keep Pennsylvania plant open at Trump’s request

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FILE PHOTO: The logo of Lockheed Martin is seen at Euronaval, the world naval defence exhibition in Le Bourget near Paris, France, October 23, 2018. REUTERS/Benoit Tessier

(Reuters) – Lockheed Martin Corp has decided to keep the Sikorsky helicopter plant in Coatesville, Pennsylvania, open after U.S. President Donald Trump pressed its chief executive to continue operations, the company said on Twitter on Wednesday.

“At the request of President Trump, I took another look at our decision to close the Coatesville, PA, facility and have decided to keep it open while we pursue additional work,” Lockheed Martin quoted CEO Marillyn Hewson as saying.

Trump applauded the decision in a tweet, saying, “We are very proud of Pennsylvania and the people who work there. Thank you to Lockheed Martin, one of the USA’s truly great companies!”

The F-35 fighter manufacturer had announced plans to close the plant, which does “completion work” for Sikorsky’s S-92 and S-76D helicopters, citing a multi-year slump in the rotorcraft industry. The plant employs about 465 employees.

“We look forward to working with the government and PA Congressional delegation to find more work for this facility,” the company said.

Republican Pennsylvania Senator Patrick Toomey said in a statement that Lockheed’s decision provided short-term certainty for workers at the plant who had expected to either lose their jobs or be re-located later this year.

Fellow Pennsylvania Senator Bob Casey, a Democrat, was skeptical about the announcement, however, saying he was concerned about the lack of a specific plan.

U.S. automaker General Motors Co has been under pressure for months from President Trump over the fate of an idled assembly plant in northeast Ohio which it has since announced it will sell.

Both Ohio and Pennsylvania are crucial to Trump’s chances of being reelected in 2020.

Reporting by Mekhla Raina in Bengaluru; Editing by Sonya Hepinstall

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From Paris to Omaha: How Occidental CEO out-maneuvered Chevron in Anadarko bid

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NEW YORK (Reuters) – Occidental Petroleum chief executive Vicki Hollub was caught off guard when U.S. oil giant Chevron swooped in last month with a $33 billion offer to buy Anadarko Petroleum, the oil and gas exploration and production firm she had been wooing for nearly two years.

FILE PHOTO: Vicki Hollub, President and CEO of Occidental Petroleum, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/File Photo

Chevron, nearly five times larger than Occidental, appeared to have out-maneuvered its smaller rival. But on Sunday Hollub showed the fight was not over. After a whirlwind few days to raise more cash, Hollub offered a sweetened deal. By Thursday, Chevron had bowed out.

In edging out Chevron, Hollub leaned on global relationships and knowledge forged from 35 years in the oil industry, according to about a dozen people familiar with the talks leading up to the company’s latest offer.

Occidental had struggled to win over Anadarko because its first public $38 billion offer of 50 percent cash and 50 percent stock, as well as previous offers made privately, required the approval of Occidental shareholders, and Anadarko was not convinced they would go for the deal, two sources familiar with the discussions told Reuters.

Hollub knew she needed to substantially increase the cash offer – thereby making shareholder approval unnecessary – and moved swiftly to secure it, the sources said.

She was in Paris on April 26, just two weeks after Chevron’s announcement, and struck an $8.8 billion deal with French major Total SA to sell Anadarko assets her company didn’t yet own.

Two days later she was in Omaha, Nebraska, securing $10 billion in financing from billionaire investor Warren Buffett’s Berkshire Hathaway Inc, who typically does not partner with companies pursuing unsolicited takeovers.

Occidental declined to make Hollub available for an interview for this story. The company’s shares are down 9 percent since making their offer public in late April.

The combined company would establish Occidental as the largest operator in the Permian basin in west Texas and New Mexico, the heart of the U.S. shale revolution, where a boom in production has propelled the United States into becoming the world’s largest oil producer.

It would make Occidental the third-largest U.S. oil company with a market value of about $80 billion, dwarfed only by global giants Exxon Mobil and Chevron.

“She’s doing the boldest M&A thing that’s happened since the ‘80s,” said Amy Myers Jaffe, energy consultant and senior fellow at the Council on Foreign Relations. “You’re having an atypical M&A battle in a very competitive space where (usually) the bigger you are, the more you’re going to win.”

Hollub’s challenge has stunned an industry where the last attempt to break up an agreed-upon deal between two U.S. oil companies was in 1984 when Texaco challenged Pennzoil’s acquisition of Getty Oil.

It has also angered some Occidental investors who say Hollub is overstretching the company’s balance sheet in an ill-advised quest for size in a volatile industry.

“Our concern is the willingness of the management team at Occidental to cut very favorable deals against the interests of shareholders on a longer-term basis,” said John Linehan, portfolio manager at T. Rowe Price.

T. Rowe, the sixth-largest holder of Occidental shares, announced it would vote against the board of directors on the annual shareholder meeting Friday. But such a move may be mostly symbolic.

An Occidental spokesman declined to comment on the concerns but pointed to Hollub’s defense of her strategy that it was better to raise cash than issue new debt.

Hollub’s background in the technical aspects of oil production contrasts with her predecessor, a banker and known dealmaker. She has been described as down to earth by former and current employees, differing from flamboyant energy CEOs.

LONGTIME DISCUSSIONS

Buying Anadarko was seen as the best way for Occidental to gain more acreage in the Permian shale basin, where it markets nearly a quarter of all barrels produced in the region.

When Chevron announced a deal on April 12 to buy Anadarko, Hollub gathered the merger team. They were shocked that Anadarko had accepted a bid that was $11 per share below what Occidental had privately offered, three of the people familiar with the discussions said.

“She thought, we’re in it to win it. Let’s make our offer public so their shareholders know what they passed up,” one of the sources said.

In a letter to Anadarko’s board of directors on April 24, Occidental said they “were surprised and disappointed” that Anadarko had not agreed to their previous two offers in April.

Anadarko executives, however, remained concerned that Occidental shareholders could scuttle the deal, leaving them without a buyer, two sources familiar with the situation said. The board of directors wanted to stick with Chevron.

Just two days after sending the letter, Hollub was in Paris meeting with Total CEO Patrick Pouyanne to discuss Anadarko’s African assets, according to two sources familiar with the discussions.

The two already had a relationship stemming from the Dolphin Gas Project, a Middle East cross-border gas initiative where both companies have an equal share. Total had made it known to her that they coveted Anadarko’s properties, including a liquefied natural gas project in Mozambique.

“Vicki wanted to show that she could quickly put the cash on the table. In less than 10 days she had the cash ready,” a Paris-based source said.

Omaha, Nebraska was next. Buffett is known for moving quickly when a deal piques his interest, but he tends to avoid getting involved in hostile takeover bids.

The meeting was set up by BofA CEO Brian Moynihan, whose bank was helping to provide financing for the Anadarko deal. Hollub later said Buffett was “warm and wonderful” in their meeting, a source familiar with the discussions said.

Buffett, cash flush and on the hunt for new deals, agreed to provide $10 billion in financing in return for an 8 percent premium, a concern for dividend-focused shareholders who believe the terms are too pricey.

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The two deals enabled Hollub to submit a revised offer on Sunday, increasing the cash component from 50 percent to 78 percent.

On Thursday, Chevron said it would collect its $1 billion termination fee and walk away from the negotiations.

(For a graphic on ‘Oxy-Anadarko would be third largest U.S. oil company’ click tmsnrt.rs/2VSZ3hY)

Reporting By Devika Krishna Kumar and Jessica Resnick Ault; additional reporting by David Gaffen, Bate Felix, David J. French, Jennifer Hiller, Jennifer Ablan; Writing by David Gaffen; Editing by Ross Colvin

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