Thursday, Apr 12, 2012 6:45 AM UTC
By Frank Jordans, Associated Press
GENEVA (AP) — Swiss drug maker Roche Holding AG reported Thursday that group sales dipped one percent to 11.03 billion Swiss francs ($12.05 billion) in the first quarter, while hinting that it might be prepared to raise its offer for U.S. diagnostics firm Illumina Inc.
Excluding the effect of the strong Swiss currency, group sales rose two percent compared to the same period last year.
Analysts had expected slightly higher sales of around 11.58 billion francs.
“We remain on track to achieve our targets for the full year,” Roche chief executive Severin Schwan said in a statement citing forthcoming new drugs to combat skin cancer and other diseases.
Sales in the United States grew six percent in the first quarter, led by hepatitis C medicine Pegasys and cancer drug Rituxan — known as MabThera outside the U.S. and Canada. Sales in Western Europe fell four percent partly due to cutbacks in government-funded health programs.
Roche, which reports earnings only every six months, said group sales are expected to grow at low to mid-single-digit rates for the full year 2012.
Addressing the monthslong effort to take over California-based Illumina, which specializes in gene sequencing to analyze patients’ DNA, the Roche CEO indicated that a higher bid might still be possible.
Last month, Roche raised its offer to $51 cash per share from $44.50 per share, said by Illumina to be too low.
But Illumina’s board has since dismissed the higher offer too, urging shareholders not to sell their stock.
“We continue to believe that on the basis of the public information that has been available to us, our offer price of $51 per share is full, fair and extremely attractive by every conceivable financial metric,” said Schwan.
But he added that “if Illumina were to engage with us, we would consider any information supporting Illumina’s contention that our offer undervalues the company and its prospects.”
“Our goal has always been to enter into a negotiated transaction with Illumina and we firmly believe that our present offer is more than adequate to serve as a basis to begin that negotiation with Illumina,” said Schwan.
On Wednesday, Roche sent a letter to Illumina shareholders ahead of the company’s annual meeting in New York on April 18.
In the letter, Roche warned that Illumina’s financial success was far less certain than the California company’s board made out when it described itself as “the Apple of the genomics business.”
“Unlike at Apple stores, crowd control of eager buyers has not been a problem for Illumina and not even Illumina has projected any surge in revenues from its products in any specific foreseeable time period,” Roche said.
Tuesday, Apr 10, 2012 12:00 PM UTC
By Frank Jordans, Associated Press
GENEVA (AP) — Northern Africa’s Sahel region risks being plunged into a dramatic humanitarian crisis unless aid for those affected by drought, conflict and poverty is scaled up soon, three senior United Nations officials warned Tuesday.
The U.N.’s High Commissioner for Refugees, Antonio Guterres, said the situation in the 3,400-mile (5500-kilometer) zone that stretches from the Atlantic to the Red Sea is suffering from lack of attention because of the conflict in Syria.
“We badly need to put this crisis on the map because its humanitarian dimension is becoming extremely, extremely dramatic,” he told reporters in Geneva.
The region, which includes countries such as Mali, Chad and Niger has been hit hard by political instability and three droughts in less than 10 years. A U.N. appeal in December for $724 million to fund aid operations in the Sahel has elicited only half that amount so far, Guterres said.
UNICEF’s Executive Director Anthony Lake said at least 1 million — and possibly up to 1.5 million — children in the region face acute, severe malnutrition, putting them at risk of death from starvation or disease. Of these, about 330,000 children are in Niger, some 208,000 are in northern Nigeria, 178,000 are in Mali and 127,000 are in Chad. The figures, which also cover Burkina Faso, Mauritania, northern Senegal and northern Cameroon, don’t even include Sudan or South Sudan, where simmering conflicts are also stoking a humanitarian crisis.
“Someday there will be no excuse for looking back and saying why didn’t we do more quickly,” said Lake, who also shared the podium with the World Health Organization’s Director-General Margaret Chan.
Unless donor countries provide more funds, “the result will be many children will die and many families will suffer,” he said.
Chan said previous droughts in 2005 and 2010 meant many of the 15 million people affected by the crisis in the impoverished region have already sold off their reserves to survive, and aid needs to arrive by July at the latest.
“We are down to the last grain,” she said.
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Tuesday, Mar 20, 2012 2:00 PM UTC
By Frank Jordans, Associated Press
GENEVA (AP) — Swiss-based commodities firm Glencore International PLC agreed Tuesday to buy Canada’s largest grain handling company Viterra Inc., in a deal valued at 6.1 billion Canadian dollars ($6.14 billion).
Glencore will immediately sell on the majority of Viterra’s Canadian assets and certain other businesses to Agrium and Richardson International for about CA$2.6 billion in cash, it said.
The announcement comes a day after Viterra revealed it was in exclusive talks with a potential buyer.
Glencore said it will buy all shares of Viterra for CA$16.25 per share in cash, a premium of about 50 percent over its trading value before the first word of a possible deal emerged March 8.
“The acquisition of Viterra is consistent with Glencore’s strategy of strengthening its position as one of the global leaders in grain and oilseeds markets,” said the company based in Baar, Switzerland.
Shares in Glencore were down 2.3 percent at 411 pence in afternoon trading in London.
Glencore is already one of the world’s biggest traders in raw materials, such as coal, cotton and corn. Last year, Glencore underwent a $10 billion IPO and it recently announced plans for a $90 billion merger with Anglo-Swiss mining group Xstrata PLC.
Canadian authorities will likely examine whether the takeover of Viterra is a “net benefit” to Canada. They have previously blocked Glencore rival BHP Billiton’s takeover of Potash Corp. because of concerns.
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Tuesday, Mar 6, 2012 5:45 PM UTC
By Frank Jordans, Associated Press
A TV reporter explains the features of the new Mercedes A-Class on Tuesday, March 6, 2012, at the Geneva Motor Show in Switzerland. (AP Photo/Frank Jordans)(Credit: AP)
GENEVA (AP) — Mercedes-Benz unveiled a radical redesign of its A-Class vehicles Tuesday, the first in a series of facelifts for the German luxury automaker’s fleet.
The sleek, sporty look of the new A-Class contrasts sharply with its dowdy predecessor, favored by the over-50s since it was launched more than a decade ago.
“We’re looking for younger and more female customers,” said Dieter Zetsche, the CEO of Mercedes’ parent company Daimler.
The customer reaction so far had been positive, he said, calling the new design strategy on which the A-Class is based “an exclamation point.”
“It visualizes how we are changing the company,” Zetsche told reporters at the Geneva Motor Show.
Don’t expect the premium brand to dive into the mainstream just yet, though.
Mercedes also rolled out seven other new models that resemble more closely the company’s cool, conservative style.
These include the E-Class 300 BlueTEC, a business vehicle with diesel-hybrid propulsion, and the powerful SL 63 AMG.
All vehicles tout greater fuel efficiency, with the A-Class coming in at just under 99 grams of CO2 per kilometer. Zetsche said the company is aiming to get its fleet average down to 125 grams of CO2 per kilometer by 2015.
The Daimler CEO was upbeat about his company’s prospects in a challenging global market for automobiles.
Worldwide sales for the industry are expected to grow by about 4 percent, said Zetsche. “We very much believe that we will be better than that.”
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Tuesday, Mar 6, 2012 1:45 PM UTC
By Colleen Barry and Frank Jordans, Associated Press
The new Audi A1 quattro car is shown during the press day at the Geneva International Motor Show in Geneva, Switzerland, Tuesday, March 6, 2012. The Motor Show will open its gates to the public from March 8 to 18, presenting more than 260 exhibitors and more than 180 world and European premieres. (AP Photo/Keystone, Martial Trezzini)(Credit: AP)
GENEVA (AP) — Small cars were looking more sleek and sporty at the Geneva Auto Show on Tuesday as global automakers struggling to make a profit in Europe tried to entice consumers to look past the continent’s economic gloom.
Ford premiered the B-Max, a subcompact aimed at families, while Mercedes is looking for younger buyers — read under 50 — for the new A Class. Audi rolled out the third-generation in its A3 series, which 15 years ago was the first compact in the premium market.
Fiat launched its 500L, an elongated version of the tiny 500 city car that is being made in Serbia, and Toyota has put a little snarl on the hybrid version its best-selling Yaris to give it a more aggressive look. Peugeot is setting an automotive standard by making its new 208 smaller than its predecessor.
The launches are a far cry from the days when small cars were spartan money-savers. While remaining easy on fuel consumption and light on emissions, these models are tooled with the latest safety features and touches of luxury to spruce up the compact and subcompact segments that comprise some 80 percent of the European market.
“Remember when smaller cars used to be cheap and cheerful? Now the consumers want the finest quality, the finest fuel efficiency, safety and design,” said Ford CEO Alan Mulally.
The problem for European mass market automakers is that consumer demand has shriveled under the pressure of the sovereign debt crisis: this year sales are expected shrink nearly 5 percent to 12.9 million units, according to the Center for Automotive Research.
The onset of the financial crisis in 2008 brought cash-for-clunker incentives that allowed drivers to get a bonus to buy a new car if they junked an old one. The incentives propped up the industry and delayed the inevitable reckoning with the fact that Europe has too many idle factories — something most European auto executives say shouldn’t be repeated.
“I don’t want incentives or financial assistance,” said Fiat and Chrysler CEO Sergio Marchionne told reporters. “Fiat is financially solid and opposes any intervention to prop up the market.”
Fiat is among a long list of European automakers that is losing money in Europe that includes Peugeot-Citroen PSA, General Motors’ Adam Opel, and Renault. Fiat is aiming to build cars in Italy for export to the United States, where it has a 58.8 percent share in Chrysler through a nearly three-year-old alliance.
But it first needs to streamline its Italian factories, which are operating at just 60 percent capacity, according to figures from IHS automotive.
Idle production lines cut profits, and European automakers frequently have faced national resistance to any moves to close factories in response.
Stephen Odell, CEO of Ford of Europe, said European policymakers should stop getting in the way of plant closures as the industry seeks to balance supply with shrinking demand. Ford plants are running above 90 percent, thanks to closures in 2008 and 2009.
“I believe policymakers can stop making statements that they understand capacity should be taken out — but not in my country,” Odell said.
A fresh alliance inked last week between General Motors Peugeot is a sign that the industry is looking at ways to cut costs.
GM will take a 7 percent stake in Peugeot, Europe’s No. 2 automaker, in a deal that foresees a common platform by 2016 and synergies in the purchase of parts. The carmakers say it will save them $2 billion a year within five years, split roughly equally.
So far, the automakers have not discussed the possibility of job cuts and factory closures — moves expected by analysts.
The head of General Motors Europe, Karl-Friedrich Stracke, on Tuesday tried to dampen fears of mass job cuts in Europe, but didn’t rule them out.
“We need a sustainable setup. No company can keep making a loss,” Stracke said.
Meanwhile, Japanese car maker Nissan, which is in an alliance with French automaker Renault, announced it is investing 125 million pounds ($198 million) to build the new Invitation compact car at its British factory — a rare expansion of auto production in western Europe. Nissan said the Invitation will compete with Ford’s Fiesta and Volkswagen’s Polo models, and debut next year.
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Tuesday, Mar 6, 2012 12:09 PM UTC
By Colleen Barry and Frank Jordans, Associated Press
GENEVA (AP) — Ford launched its new B-Max family car at the Geneva Motor Show on Tuesday, amid concerns that faltering demand in Europe may require mass market automakers to consider further plant closures.
The subcompact B-Max, to be sold only in Europe, is recognizable for its missing pillar between the front and rear doors and is aimed squarely at a demographic squeezed by government austerity measures.
It features Ford’s EcoBoost fuel-saving technology, another nod to cost-conscious consumers looking to counter rising gas prices.
Ford’s chief executive Alan Mulally insisted the company still considers Europe an important market, despite losing money there last year.
“Europe, even now with the slowdown, we’re at nearly 14 million units,” he told The Associated Press at a pre-show event late Monday. By comparison, Ford’s estimate for North America is only slightly higher, with 14.5 million units.
But Mulally said that to compete, automakers need to aggressively meet consumer demand. At the moment there is a strong appetite for small, sleek and sporty vehicles in Europe, he said. “Remember when smaller cars used to be cheap and cheerful? Now the consumers want the finest quality, the finest fuel efficiency, safety and design.”
Meanwhile, Ford Europe’s CEO told reporters Tuesday that European policymakers should stop getting in the way of plant closures as the industry seeks to balance supply with shrinking demand.
“I believe policymakers can stop making statements that they understand capacity should be taken out — but not in my country,” Odell said.
He also criticized the European free trade agreement with Korea as being lopsided — resulting in seven times more cars arriving from South Korea than heading there from Europe. He hopes the same thing won’t happen with an Indian accord being negotiated.
Idle production lines in Europe are cutting profits as automakers face a contracting market. Odell said Ford plants are operating just above 90 percent thanks to earlier plant closures, and emphasized that Ford Europe has been profitable for six of the last eight years despite a difficult economic environment.
More recently, Ford Europe has dropped a Belgian plant to four days a week and reducing the temporary work force at plants in France and Britain.
Ford made difficult decisions on plants during the 2008 and 2009 crisis — something that didn’t happen Europe-wide “for a number of national reasons,” Ford CFO Lewis Booth told The Associated Press.
Ford will focus on cost containment to return to profitability until demand is restored, but he declined to speculate on possible measures. Booth said Ford Europe could lose $500 to $600 million dollars this year, after recording losses of $190 million in the last quarter of 2011.
“The European consumer is nervous about spending money because he doesn’t know what the future holds,” Booth said.
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