Multinational Corporation Dynamics [2018.10.10]
Toyota Motor and SoftBank Group announced a strategic partnership in the next generation automotive industry equipped with autonomous driving technology. The new services we strive to provide include launching ride hailing services in sparsely populated areas with weak public transportation, providing hospital pick-up and drop off services for patients while in autonomous vehicles, or taking orders and cooking while delivering takeaway food. The relevant business will be implemented through a new joint venture company called 'MONET Technologies'. The investment ratio of the new company is 50.25% for Softbank and 49.75% for Toyota.
Toyota Motor is considering localizing the production of high-end car brand Lexus in China. Lexus sold in China is imported from Japan. In the past two years, Toyota has started researching how to localize production. Last year, Toyota discussed the issue of the Lexus model with two joint venture partners in China, GAC Group and FAW Group. It is unclear whether Toyota has approached these two companies for cooperation or whether they have approached Toyota. Toyota's preferred option is to own all or most of the local Lexus production plants, and if it only produces electric vehicles, Toyota can do so immediately.
General Motors' autonomous vehicle business received its second major investment in a few months. Honda promised to spend 2.75 billion dollars to support General Motors and jointly bring autonomous vehicle to the market. Honda will invest US $750 million in GM Cruise LLC to acquire 5.7% of its shares. In addition, it will invest US $2 billion in the next 12 years to jointly develop and deploy autonomous vehicle. The joining of Honda will consolidate GM's position as the leader in the fierce competition for the commercialization of autonomous vehicle.
SAIC Motor Corporation has announced that due to a safety hazard caused by the lower control arm bushing of the front suspension, it has decided to recall some Buick, Chevrolet, and Cadillac brand vehicles starting from October 20th, totaling 3326725 vehicles. It is reported that as early as 2015, some consumers reported their design defects to SAIC Group. However, over the years, SAIC has not taken measures to address its own design defects and consumer complaints, ultimately leading to the largest car recall in Chinese car history. After the opening of the day, SAIC Group briefly fell below the limit, but the announcement stated that the vehicle recall plan is not expected to have a significant impact on the company's operating performance.
The People's Insurance Group of China Limited has obtained IPO approval from the China Securities Regulatory Commission, but the total number of shares issued has decreased by half. As a result, the People's Insurance Group of China will become the fifth insurance company to list on both the A-share and Hong Kong stock markets, and it is also the second insurance company to list on the A-share market in the past 7 years.
Johnson&Johnson completed the sale of its LifeScan business to Platinum Equity for approximately $2.1 billion. LifeScan, Inc. is a global leader in blood glucose monitoring and a manufacturer of OneTouch branded products, with a net revenue of approximately $1.5 billion in 2017.
China Greenland Holding Group is selling some assets of a major real estate project in Brooklyn, New York. Greenland will sell three plots of land from the Pacific Park Brooklyn project to TF Cornerstone and Brodsky Organization. Greenland Group stated that the recent sale will help advance the stalled 15 building project. The initial sales revenue of this mixed use development project was lower than expected, mainly from apartment sales.
Home appliance manufacturer Qingdao Haier will become the first Chinese company to trade on the Frankfurt Stock Exchange, issuing 400 million D-shares. The stock will be traded on the China Europe International Exchange and denominated in euros. Haier is expected to launch around October 15th, with the proceeds used to support business growth and some funds used to acquire Candy SpA from Italy. The China Europe International Exchange is a joint venture between the Shanghai Stock Exchange, Deutsche Bank AG, and China Financial Futures Exchange. It was established in 2015 and has mainly listed ETFs so far.
Amazon CEO Jeff Bezos stated on Tuesday that Blue Origin, a aerospace service company, is his most important current job. In addition to creating Amazon, Bezos is also the founder of the private aerospace service company 'Blue Origin'. Blue Origin is mainly committed to developing reusable rockets to reduce the costs of various space activities, such as satellite launches and space travel. In order to support Blue Origin, Bezos has promised to reduce his holdings of approximately $1 billion in Amazon stocks annually to support Blue Origin. Bezos stated that 'Blue Origin' will carry out a manned space mission in 2019.
The European Union will unconditionally approve Microsoft's $7.5 billion acquisition of GitHub. Microsoft announced in June this year that it would acquire GitHub for $7.5 billion in stock. GitHub is a leading global software development platform with over 28 million developer users. The European Union will decide on October 19th whether to approve this transaction. If everything goes smoothly, Microsoft expects the transaction to be completed by the end of this year.
The supervisory board of Thyssenkrupp, a German industrial technology giant, unanimously decided on October 9th to approve the company's spin off and restructuring plan proposed by the board of directors. According to previous plans, the group will be split into ThyssenKrupp Industries and ThyssenKrupp Materials, with the former focusing on industrial and related products and the latter on materials business. Both companies will go public.
French oil giant Total S.A. and Sonatrach of Algeria have signed two agreements to jointly develop a natural gas field in Algeria and establish a joint venture company focused on petrochemical business. Total stated that the estimated reserves of the gas field exceed 100 million barrels of oil equivalent, and the first batch of natural gas materials will be produced by the end of 2021. Sonatrach will hold 51% equity in each of the two projects, while Total will hold the remaining 49% equity.
SK Innovation in South Korea has announced the construction of a lithium-ion battery separator (LiBS)/ceramic coated separator (CCS) production plant in Changzhou, Jiangsu, China. SK Innovation ranks second in the global lithium-ion battery isolation market share. This is the first overseas factory in SK's innovative materials business field. The newly built factory has an investment of approximately 2.5 billion yuan (approximately 400 billion Korean won). After the completion of the factory, the total production of SK Innovation lithium-ion battery separators will increase to 850 million square meters per year.
Honeywell has signed an agreement to acquire leading warehouse automation solution provider Transnorm from private equity firm IK Investment Partners for approximately 425 million euros. Transnorm provides fast and efficient product transportation services for e-commerce and package delivery customers, with a installed capacity of 160000 and annual sales of 100 million euros, of which 60% come from the European market. After the transaction is completed, Transnorm will become a part of the Security and Productivity Solutions business group.
PPG Industries Inc., an American paint and coating manufacturer, announced on Monday that in order to resist rising inflationary pressures, the company has announced a 10% increase in the average prices of all automotive original equipment manufacturer products. This price adjustment will take effect on November 1st or as soon as allowed by the contract.
Dell, the world's largest private technology company, met with investment banks to discuss traditional initial public offerings and other options. This raises doubts about the company's ability to return to the public market with a $21.7 billion transaction that has attracted widespread attention from investors. Dell stated in its regulatory filing on Wednesday that if investors vote against its acquisition of tracking stock DVMT, then an IPO would be a potential contingency plan. This means that Dell will relist by selling its common stock to public market investors. Dell holds 80% of VMware's shares and stated in July that it will reverse acquire VMware for $21.7 billion in cash and stock to return to the public market.
Exxon Mobil is researching the sale of many of its assets in the US Gulf of Mexico, as high oil prices have prompted the world's largest listed oil company to reassess its business portfolio. ExxonMobil currently focuses on promising offshore areas such as Guyana and Brazil, as well as onshore areas in the Permian Basin of Texas. ExxonMobil's daily production is equivalent to around 2.2 million barrels. Although the company is the most valuable listed oil company, it is only the ninth largest operator in the Gulf of Mexico, lagging behind heavyweight companies such as Shell and BP Plc, as well as smaller independent oil companies such as Fieldwood and Talos that focus on the Gulf of Mexico.
Huawei will release a new smartphone 'HUAWEI nova3' equipped with four cameras in Japan. The expected market price is 54800 yen (approximately 3310 yuan), targeting female and young customer groups. In order to achieve ideal selfies with peers, dual front facing cameras are also equipped. Artificial intelligence (AI) can recognize others' smiling faces and scenery, and choose the best shooting mode.
China National Offshore Oil Corporation (CNOOC) announced on Tuesday that it has taken note of Husky Energy's proposed merger with MEG Energy. As a shareholder of MEG, the company does not currently express any opinion on this matter. Husky is a subsidiary of Changhe, controlled by Hong Kong tycoon Li Ka shing. The company issued an 'uninvited acquisition proposal' to Canadian peer MEG on Monday, with a valuation of C $6.4 billion ($5 billion). According to the 2017 annual report, CNOOC holds approximately 12.39% of MEG's shares.
Kroger and Walgreens Boots Alliance are collaborating to pilot a new form of store operation, where consumers can order Kroger's groceries online and then pick up at participating Walgreens stores. In addition, Kroger's own brand Our Brands will also enter Walgreen's cooperative stores.
Wal Mart said on Tuesday that it planned to acquire Eloquii, an online retailer specializing in large women's wear. Details of the transaction were not disclosed. Eloquii was founded by The Limited in 2011, but was re listed as an independent brand in 2014. The size of the large clothing market is $21 billion, and currently more than half of women aged 18 to 65 in the United States have clothing sizes of 14+.