Murdoch gets ‘The Journal’

Finally, he did it! Dow Jones is now a Rupert Murdoch property. News Corporation is acquiring Dow Jones at a price of $5.6 billion and this was certainly not a smooth sail for Murdoch. Four months of intense negotiations and innumerable conferences over the future of The Wall Street Journal has yielded the result. Few members of the Bancroft family, who hold 37% of the voting rights of Dow Jones, at a point of time, demanded that Murdoch also bear their legal and banker’s expenses incurred in the deal process. This was finally agreed upon and reportedly gave Murdoch what he wanted! Rupert Murdoch, Chairman and CEO of News Corporation, said that he was deeply gratified at the level of support he had received from the Bancroft family and its trustees. Murdoch also appreciated Bancroft family’s long and distinguished history as custodians of Dow Jones. In order to continue with the same editorial standards and quality, people have come to expect of intellectual publications, a five member special committee has been set up. The present members are Louis Boccardi, Thomas Bray, Jennifer Dunn, Jack Fuller & Nicholas Negroponte. News Corp. had proposed the name of Negroponte while the other four were the choice of Dow Jones. The deal was done and is expected to close by fourth quarter of this calander year, a regulatory approval is awaited. There are high chances that the deal will not face any hurdle with the anti-trust approvals as Murdoch’s media property is diversified in terms of products as well as regions. Lack of concentration in one location prevents anti-trust scrutiny for this mega corporation.

GM’s new Latino connection!
One of the Detroit trio, GM, has decided to invest to the tune of $500 million in its Argentina and Brazil plants. The aim is to develop new generation smaller cars in order to capture Latin American as well as other emerging markets. Investments at the Argentine plant in Rosario will mainly be for product upgradations. The Brazilian plant at Sao Caetano do Sul will have investment for product upgradation, development of new equipment & infrastructures. As per GM chairman Rick Wagoner, improved economic environment in Argentina and Brazil will help GM to proceed with its next phase of investments to support the company’s continued growth around the global markets.

VW is buoyant & also profitable!
Cost cutting has reaped benefits for the German auto maker, Volkswagen (VW). It is all set to reach its 2008 pretax profit target of $7 billion in 2007 itself! VW surpassed analysts’ expectations and recorded operating profit of $2.4 billion for the second quarter. These exceptional Results however do not entail that the company is going to take it l i g h t l y. According to CFO Hans Dieter Poetsch, VW is already mulling a new car which the company plans to develop with its Shanghai counterpart. The car would be mainly targeted at markets of North America and China. The new Sedan would probably be a follow-up model of the PassatLingyu, which is locally manufactured in China.

LG’s three year long jump...
Its jubilation time for Korean chaebol LG Electronics as its net profit for Q2 2007 stands at $420.1 million, highest in the last three years. Last time, the highest profit posted by the company was in Q2, 2004 when the profits were $530 million. The LCD venture and the mobile phone business of the company proved good for the sales but the plasma business was the culprit. As compared to previous quarter, sales of plasma displays witnessed a fall of 16%. Phones sales on the other hand increased from 15.8 million units in Q1 to 19.1 million.

McDonald: perform or perish!
A predicted increase in the debt level, a second quarter loss and a CFO retiring – that seems to be the menu at Mc- Donalds! This fall, the world’s largest restaurant company might witness an increase in its debt levels. In the balance sheets, the company has a total long-term debt amounting to $8.8 billion and $29.5 billion worth of total assets as on March 31 2007. As compared to last year’s net profits of $834.1 million, McD posted a net loss worth $711.7 million. As a result, while announcing its results, the company informed that Mathew Paull, the CFO is retiring. Paull might stay till the end of this year.

Harry Potter strikes a million!
The mania never ceases, as it again creates history. The seventh and the final book of the Harry Potter series, ‘Harry Potter and the Deathly Hallows’ recorded 8.3 million sales within 24 hours after its release. All major book chains and stores have been experiencing sales that has left the frenzy far behind for the sixth book. The largest chain, Barnes & Noble Inc. saw 1.8 million copies off its shelves within 48 hours. The No.2 US book chain, Borders Group, on the other hand recorded sales of about 1.2 million copies on Day 1 itself! According to Wal-Mart, the final edition is being grabbed at a speed twice as fast than the sixth book. Pre-order sales were also phenomenal, with Amazon.com selling 2.2 million as pre-sold copies worldwide.

Honda on an expansion spree...
Honda has its hands full when it comes to overseas activities. From building plants to increasing production, the Japanese auto maker is in no mood to leave any stone unturned to fight sluggish domestic sales with surging international demands. Honda is investing $246 million in R&D in order to develop new products for Chinese market by 2010. In Thailand, it is constructing a second plant worth $200 million. Meanwhile in Vietnam, the auto maker is investing $65 million in order to enhance motorcycle production. Not leaving the South American market, there is a $100 million production plant waiting.

Filling the Gap- Glenn Murphy...
It is surprising – a drug chain executive given the responsibility to run an apparel chain! Apparently Gap has appointed ex- Shoppers Drug MartChief Executive and Chairman Glenn Murphy as its CEO and chairman! After the ousting of Paul Pressler, non-executive Chairman Robert Fisher has been serving as the interim CEO. Murphy is credited with tripling the stock value of Shoppers Drug Mart during his tenure and is also believed to be good in ‘rethinking’ brands. Gap is pinning all its hopes on Murphy to create the same magic that he did with his previous job and help the apparel chain to gain back its declining market share.

A couple of Google’s offerings...
The search engine company, Google has come out with a new service for small businesses. The Google Custom Search Business Edition is a $100 per year service, which allows visitors to search information on their sites. This is a 10 minute sign-up process completed in three steps. The only requirement is a particular embedded code. California based Google is also mulling expansions in its Print Ads programme. This new expansion will permit online advertisers to publish their ads in 225 newspapers in the US market.

Coca Cola is falling down!
Cola major, Coca Cola Enterprises has been struck by the clumping demand for its soft drinks in North America. Analysts attribute this downfall in sales to a comparatively lower demand for carbonated drinks due to perceived health risks. Also giving trouble is the price increase of aluminium, a resource needed for cans and corn syrup that is used as a sweetener. For the quarter ended June, profit stood at $270 million or 56 cents per share (58 cents per share when restructuring charges and other items were excluded from the calculations). For the same quarter in the previous year, the profit was $339 million or 71 cents per share.

Larry in philanthropy mode!
The fourth wealthiest American and the Chief Executive of the world’s third biggest soft ware company, Oracle, Larry Ellison is in the mood of offloading weight from his shoulders. Over the course of nine months, Ellison would sell off a good 100 million Oracle shares. Now, it is not always that the reason is only about the money, honey! Apparently Ellison Medical Foundation that works for bio-medical research will also be at the receiving end, as Ellison will gift another 2 million shares to the charity. Once, he completes all the planned gift s and sale, Ellison will control about 22.7% or 1.173 billion outstanding shares of the soft ware giant. The philanthropist attitude of American heavyweights has been quite pronounced lately.

Committing for a lifetime…
It doesn’t get better than this – from three years to lifetime! After continual concern attacks from dealers and not so good sales figures, auto maker Chrysler, has replaced its warranty scheme, from the present 36,000 miles, three year warranty to a lifetime warranty covering most of its new vehicles. However, the warranty is not transferable, thus the benefits are enjoyable by the first owner only. A new TV and print campaign has already been started to promote this new benefit. The sad part is that diesel vehicles as well as its SRT range of models, don’t fall under this scheme. Chrysler portfolio is jam packed with fuel guzzling petrol powered behemoths like the Jeep Grand Cheroke & Dodge Viper sports car. With the fuel guzzling tax in place and a steep rise in fuel prices, Americans do not prefer big petrol cars. Auto makers in the US are now trying the extended warranty route to capture declining sales. In the previous year, while GM started the five year, 100,000 mile warranty for its 2007 model line up, Ford announced its five years or 60,000 mile warranty scheme on its new vehicles.

Definitely, on cloud nine...
Considering that the footfalls at Indian airports escalated by an unbelievable 42% during the last fiscal, airports modernization and development becomes just as important. Well, that’s the truth as far as infrastructure giants like GMR & DLF would want to believe. With both players eyeing the upcoming Greater Noida Airport development project, there is no doubt that international airport authorities like Fraport, South Africa Airports Authority, Chicago Airports et al will too be all ears about the development in the aviation sector of the world’s second fastest growing economy! The fact that the project falls within 150 km of New Delhi IGI Airport would also automatically grant an upper hand to the GMR Group due to rights which it has to due to the ‘vicinity’ factor. With a grand estimated cost to government coffers of a colossal Rs.35.1 billion, there is no questioning the fact that GMR will be keeping its fingers crossed, hoping to repeat its feat of having thrashed Fraport and several other competitors to win the airport development rights for Sabiha Gokcen International Airport (SGA, Istanbul) in July 2007. As far as Indian aviation is concerned, with improvements in the aviation sector health (largely through the consolidation pill) coupled up with many domestic players understanding the danger of being hooked to heavy and illogical investments in aircraft purchases, lot of good thing seems to be happening to the sector.