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Exclusive: Shire hires Citi as braces for takeover bids

LONDON (Reuters) – London-listed drugmaker Shire has hired investment bank Citi as an adviser, expecting to receive takeover approaches following a wave of deals in the healthcare sector, sources familiar with the matter told Reuters.

Much of the dealmaking has been fueled by U.S. companies seeking lower tax rates abroad. With its tax base in Ireland – where effective corporate tax rates are among the lowest in the world – and a mid-sized market value of around $35 billion, Shire could be a prime target, analysts and bankers believe.

“Something could happen this year,” said one of the sources on condition of anonymity because the matter is private.

Shire, which specializes in treatments for attention deficit hyperactivity disorder (ADHD) and a range of rare diseases, was not immediately available to comment. Citi declined to comment.

Shire, which was founded in 1986 in Britain but conducts most of its business in the United States, has been domiciled in Ireland for tax purposes since 2008.

It has already been approached by Botox-maker Allergan months before the U.S. group itself became a takeover target for Valeant, Reuters reported earlier this year.

That approach did not lead to serious discussions between the two parties and there are currently no talks with Allergan, one source said.

Shire is a relative rarity in being a mid-sized drugmaker with no controlling shareholder, making it a perennial subject of takeover speculation.

Sector bankers think it could appeal to U.S. pharmaceutical and biotech firms such as Bristol-Myers Squibb, Amgen, Abbvie, Gilead and Biogen.

But Shire’s reliance on ADHD drugs has put off potential bidders in the past, as using stimulants to treat ADHD in children is controversial in some doctors’ eyes, they added.

ADHD medicines account for around 40 percent of Shire’s sales. The firm also sells pricey drugs to treat rare genetic disorders and is building up a portfolio of treatments in ophthalmology and other speciality disease areas.

The current imperative for major drugmakers to keep up with rivals in terms of a low tax rate and to use offshore cash that would otherwise be taxed punitively if brought back home, could now be changing the calculation, some industry watchers believe.


“The benefits of lower taxation is a key MA driver in this cross-border wave of U.S./EU healthcare deals,” said one pharmaceuticals analyst on condition of anonymity.

“Shire would make another attractive target despite the fact that it is a niche business and sells amphetamines.”

The race to strike so-called “inversion” deals offering lower tax rates was underscored at the weekend when U.S. medical device maker Medtronic agreed to buy Covidien for $42.9 billion and move its base to Ireland.

Ireland is a particularly attractive destination for such transactions since it has a 12.5 percent corporate tax rate, compared with 35 percent in the United States.

A Reuters review showed about 50 such inversion deals had been done in the past 25 years, with half occurring since the 2008-2009 financial crisis abated.

“Any halfway decent, EU-based company will be looked at very seriously. The latest deals have upped the ante. The metric of purely strategic rationale has been put aside – anything is possible,” said one sector banker, who added that two or three more possible inversion deals could happen soon.

Some U.S. lawmakers are concerned the deals erode government revenue by giving corporations a tax-avoiding loophole. Two bills in the U.S. Congress and a White House proposal would make inversions harder to do, but neither has gained much traction. That could change if another major U.S. company or two tried to conduct inversions, tax lawyers and analysts said last week.

U.S.-based Pfizer’s $118 billion bid for British drugmaker AstraZeneca was rejected last month, scuppering what would have been the largest such inversion deal, but there is speculation talks may yet revive.

Under British takeover law, the UK firm can approach Pfizer at the end of August to discuss a sweetened bid, or Pfizer can try again in November.

(Additional reporting by Ben Hirschler; Editing by Mark Potter)

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Morgan Stanley calls Valeant ‘house of cards’ in Allergan pitch

NEW YORK (Reuters) – Morgan Stanley, an adviser to Valeant Pharmaceuticals International Inc in its $53 billion hostile bid for Allergan Inc, initially tried to get hired by Allergan and in its pitch called the unsolicited bidder a “house of cards”, according to Allergan.

The Botox maker released email exchanges with Morgan Stanley bankers on Monday, which reveal the bankers were pitching for a defense assignment from Allergan, offering advice as to how the company could successfully defend the unwanted suitor.

“Executives from Morgan Stanley, the investment bank understood to have recently been retained by Valeant, have sent emails directly to Allergan’s management team that suggest they share the concerns of Allergan…,” the company said in a statement.

In a May 13 email to Allergan Chief Executive David Pyott and Chief Financial Officer Jeff Edwards, Morgan Stanley’s global head of MA Robert Kindler said the company could be more aggressive in going after Valeant’s business model and the value of its stock.

David Horn, a managing director at Morgan Stanley’s healthcare group, followed up with an email to Edwards on May 18.

“Part of what Rob (Kindler) is suggesting (to Allergan) is to allow him to use his significant relationships with media and analysts to provide a clear and detailed articulation of why Valeant is a house of cards and your investors should not want to take their stock,” Horn said.

Morgan Stanley, like other investment banks, pitched for business from both Allergan and Valeant as the bidding war escalated. Banks have different teams that work with different clients, which sometimes have divergent interests.

In its Allergan pitch, Morgan Stanley argued that Allergan’s financial adviser, Goldman Sachs Group, is not outspoken enough in attacking Valeant’s stock value because the bank is historically close to the Canadian drugmaker and has done a lot of business with the company, people familiar with the matter said.

Goldman advised Valeant in its Bausch Lomb purchase last year and provided committed financing for the transaction. Valeant’s chief financial officer, Howard B. Schiller, was a long-time Goldman executive.

Allergan chose not to boost its advisory team with Morgan Stanley, partly because the bank has a potential conflict having an overweight rating on Valeant’s stock, people familiar with the matter said.

Representatives of Morgan Stanley declined to comment, while Allergan declined to comment.

“Kindler is one of the best MA bankers out there. While we will have some fun with him later, he’s still very much on our team,” Valeant Chief Executive Mike Pearson said in a statement to Reuters. “It’s clear that Allergan’s release is a sign of desperation, and we look forward to proving the naysayers wrong.”

Valeant and its ally Pershing Square Capital Management – Allergan’s biggest shareholder – have offered to buy Allergan for $53 billion in cash and shares. Allergan has rejected the offer and refused to negotiate, leading Pershing to move toward replacing most of Allergan’s board at a special meeting.

However, Valeant’s Toronto-listed stock has fallen in recent weeks, with Allergan stepping up its attack on the rival’s business model. Shares of Valeant have fallen nearly 7 percent in the last five days, while the SP 500 has remained flat.

Allergan has argued that Valeant shuns research and development and relies solely on acquisitions to drive growth, a model which it calls unsustainable. Allergan has compared Valeant to Tyco, the scandal-plagued company which built itself up through acquisitions and then collapsed.

Valeant has defended itself, with Ackman arguing that the company’s business model is more similar to Warren Buffett’s Berkshire Hathaway Inc than to Tyco.

Allergan is working with Goldman Sachs and Bank of America Merrill Lynch and legal advisers Latham Watkins, Richards, Layton Finger and Wachtell, Lipton, Rosen Katz.

Valeant, which has been working with Barclays Plc and RBC Capital Markets for the past few months, has recently added Morgan Stanley as a financial adviser, people familiar with the matter said.

Valeant decided to bring in Morgan Stanley for its expertise in advising on hostile deals. While the company initially believed Allergan would eventually come to the negotiating table, the target’s repeated rejections made it clear the effort was headed for all-out hostile bidding.

Companies often choose to hire additional advisers in protracted, complicated takeover battles. When Sanofi SA made a hostile bid for Genzyme in 2010, which succeeded eventually, Morgan Stanley was brought on several weeks into the process.

(Editing by Sofina Mirza-Reid and Chris Reese)

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Medtronic says still has room for more acquisitions

CHICAGO (Reuters) – Medtronic Inc on Monday said it will remain in the market for promising new technologies even as it absorbs Dublin-based medical device maker Covidien Plc in a $42.9 billion cash-and-stock deal.

A day after announcing the agreement to buy Covidien, Medtronic executives told analysts on a conference call that the additional cash flow generated by combining the two companies would expand the budget for acquisitions and minority investments, as well as internal research and development.

“There still are plenty of opportunities for us to focus on other acquisitions, other innovation. That momentum doesn’t need to stop, even in this integration period,” Medtronic Chief Financial Officer Gary Ellis said on the call in response to a question.

Medtronic has been especially keen to expand beyond selling devices into providing advisory services to hospitals, and would consider acquisitions that would help it develop that business, Chief Executive Omar Ishrak said.

“To the degree we can bring in other acquisitions to support that further, we will look closely at that,” Ishrak said.

The company currently has consulting contracts in Europe that focus on cardiac catheterization laboratories, which are specialized areas of the hospital where heart procedures such as stent implants are performed.

Analysts said the blockbuster deal could speed further consolidation in the medical device industry, which has struggled to reaccelerate revenue growth since the global economic downturn hit.

“This consolidation phase of the medical device evolution makes sense to us, and it should provide increased pricing stability and leverage for the companies taking the leap. For those not yet participating, we would expect more to come,” said BMO Capital Markets analyst Joanne Wuensch in a note to clients.

Medtronic is acquiring Covidien in a so-called inversion transaction that allows it to reincorporate in Ireland to take advantage of lower tax rates.

Analysts said the strategy will enable Medtronic to access cash generated through sales outside the United States and now held overseas without paying a penalty for repatriating the money. This benefit overshadows the modest reduction in the overall corporate tax rate that the company is forecasting.

“We view the new access to (overseas) cash as the principle driver of the inversion strategy,” Cowen Co analyst Joshua Jennings said.

Medtronic expects the acquisition to lower the corporate tax rate of the combined company by 1 to 2 percentage points, Ellis said. Medtronic’s corporate tax rate is now about 18 percent.

Medtronic also said Monday it would maintain its prior forecast for fiscal 2015 earnings in the range of $4 to $4.10 a share.

Shares of Medtronic fell about 2 percent to $59.44 in morning trading. Covidien stock was up 20 percent at $86.40.

(Reporting by Susan Kelly in Chicago; Editing by Nick Zieminski)

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Ex-Goldman director Gupta fights $13.9 million fine as prison awaits

NEW YORK (Reuters) – A day before he is scheduled to begin serving a two-year prison sentence for insider trading, former Goldman Sachs Group Inc director Rajat Gupta asked a federal appeals court to reduce a $13.9 million civil penalty and shorten his lifetime ban from serving as an officer of a public company.

Gupta’s lawyer, Seth Waxman, told the 2nd U.S. Circuit Court of Appeals in New York that the penalty was excessive given that Gupta separately was ordered to pay $6 million in restitution to Goldman Sachs and $5 million in criminal fines.

But David Lisitza, a lawyer for the U.S. Securities and Exchange Commission, said the $13.9 million penalty was appropriate given the brazen nature of Gupta’s actions, even though he did not personally profit.

“This is the insider trading case of our century so far,” he said.

Gupta, 65, was convicted in June 2012 of passing confidential tips he heard at Goldman board meetings to his friend, former hedge fund manager and billionaire Raj Rajaratnam. Rajaratnam, the founder of Galleon Group, is serving an 11-year prison term for insider trading.

Gupta is set to report to federal prison on Tuesday, the same day that Rajaratnam’s younger brother, Rengan, goes on trial in New York on insider trading charges.

A three-judge panel of the 2nd Circuit previously denied Gupta’s appeal of his conviction; he has asked the full circuit to rehear his argument.

Gupta, also the former global managing director of the consulting firm McKinsey Co, is the highest-ranking corporate official to be convicted in the government’s insider trading probe that has convicted 81 people at trial or through guilty pleas since August 2009.

U.S. District Judge Jed Rakoff in Manhattan federal court oversaw Gupta’s criminal trial as well as a parallel civil case brought by the SEC that led to the $13.9 million fine and the ban.

In sentencing Gupta to prison, Rakoff said he was unlikely to commit similar crimes in the future. But Rakoff nevertheless later imposed the lifetime ban that the SEC sought.

Waxman, a former U.S. solicitor general, argued on Monday that Rakoff had essentially come to opposite conclusions based on the same facts, prompting Circuit Judge Barrington Parker to ask Lisitza how the same judge could make a “180-degree” turn.

Lisitza responded that the risk of recidivism necessary to lock someone “in a cage” was different than that required to “keep him out of the boardroom.”

Meanwhile, Gupta was dealt a setback on Monday when the U.S. Supreme Court declined to hear Rajaratnam’s appeal of his own conviction. Both men objected to the government’s use of wiretaps against them.

(Reporting by Joseph Ax; Editing by Noeleen Walder, Bernard Orr)

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Sturdy U.S. manufacturing data bolster growth outlook

WASHINGTON (Reuters) – U.S. manufacturing output rose in May and factory activity in New York state accelerated sharply this month, buoying hopes of a strong rebound in economic growth this quarter.

The brightening growth outlook was further boosted by news on Monday that confidence among homebuilders perked up this month, a good omen for the struggling housing market.

“Today’s figures are evidence of a strengthening recovery of the economy. Things are really hopping out there,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

Factory production increased 0.6 percent last month as output rose across a swath of industries, the Federal Reserve said on Monday. It also said output had slipped 0.1 percent in April, not as deeply as it had previously thought.

Separately, the New York Federal Reserve said its “Empire State” general business conditions index rose to 19.28 this month, the highest reading since June 2010, from 19.01 in May. Readings above zero indicate growth.

Factory orders in the state hit a four-year high and inventories increased significantly, indicating that restocking will contribute to growth this quarter after weighing heavily on the economy in the first three months of the year.

Although job growth at New York factories slowed, employees worked longer hours.

The reports added to employment and services industries data in suggesting the economy was bouncing back strongly after contracting at a 1.0 percent annual pace in the first quarter.

Growth estimates for April-June quarter range as high as a 4 percent rate.


Federal Reserve officials meeting on Tuesday and Wednesday to assess the economy and deliberate on monetary policy are likely to view the fairly upbeat reports as confirmation of underlying strength in the economy.

The Fed is expected to announce a further cut to its monthly bond purchasing program, but is not seen raising interest rates until mid-2015.

Another report showed the National Association of Home Builders/Wells Fargo index of homebuilder confidence rose four points to 49 in June, just shy of the threshold that would be considered favorable for building conditions.

The improving sentiment bodes well for the housing recovery, which stalled last year after a run-up in mortgage rates.

Manufacturing output in May was led by a 1.5 percent jump in motor vehicle production. There were also gains in the output of machinery, computer and electronic products, electrical equipment and appliances, and fabricated metal products. Production of primary metals, however, slipped.

“Strength in this sector is a foundation for future growth,” said Jay Morelock, an economist at FTN Financial in New York.

Mining output rose 1.3 percent in May, but utilities production fell 0.8 percent, a fourth straight monthly drop.

Overall industrial production rose 0.6 percent after declining 0.3 percent in April.

The amount of manufacturing capacity in use rose to 77.0 percent last month, the highest level since March 2008, from 76.7 percent in April.

(Reporting by Lucia Mutikani, additional reporting by Ryan Vlastelica in New York; Editing by Paul Simao)

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IMF cuts U.S. growth outlook, says full employment years off

WASHINGTON (Reuters) – The International Monetary Fund cut its growth forecast for the United States on Monday and said the economy would not reach full employment until the end of 2017, allowing interest rates to be held near zero for longer than financial markets expect.

In its annual health check of the U.S. economy, the IMF cut its 2014 forecast to 2 percent from the 2.8 percent it predicted in April, due to a weak first quarter. It kept its 2015 forecast unchanged at 3 percent, as job creation picks up after a harsh winter.

“Recent data … suggest a meaningful rebound in activity is now underway and growth for the remainder of this year and 2015 should well exceed potential,” the IMF said.

Yet the country’s potential growth should only be around 2 percent going forward, below historical averages, as the population ages and productivity growth slows, it added.

To help support the economy and fight persistently high poverty, the IMF urged the United States to boost the minimum wage. The federal minimum wage is now at 38 percent of the median wage, below most international standards, it said.

The IMF said its forecasts show the economy would only return to full employment by the end of 2017, with inflation remaining low. “If true, (Fed) policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets,” it said.

At the same time, the IMF warned that financial markets could be too complacent about possible volatility as U.S. rates rise, with the Fund’s managing director, Christine Lagarde, citing a “halo of uncertainty” around the outlook.

The IMF said the Fed should consider further changes to its communication to better guide markets, including holding a news conference after each meeting of its policy-setting committee and publishing quarterly reports on monetary policy. It currently holds news conferences quarterly and issues monetary policy reports to Congress twice a year.

“The (Fed’s policy-setting panel) could provide greater clarity about how financial stability considerations figure into its monetary policy calculus,” the IMF said. Fed policymakers meet on Tuesday and Wednesday to consider their monetary policy stance.

The IMF urged the United States to increase spending on infrastructure and education and change parts of its tax system, including boosting the federal gasoline tax and reinstating the tax credit for research and development, to help spur growth.

In the future, policymakers should also reform corporate taxes, introduce a carbon tax and move toward a federal value-added tax, the IMF said.

A greater reliance on growth-enhancing fiscal policies could allow the Fed to retreat more quickly from its extraordinary monetary stimulus, it added.

“This would be the best policy mix from an economic perspective but, regrettably, political agreement on such an approach remains elusive,” the IMF said.

(Additional reporting by Krista Hughes and Moriah Costa; Editing by Paul Simao, Tim Ahmann and Meredith Mazzilli)

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SanDisk to buy Fusion-io to boost flash storage business

(Reuters) – SanDisk Corp (SNDK.O) is buying Fusion-io Inc (FIO.N) for about $1.1 billion to add heft to its fast-growing business of providing flash storage drives to companies.

SanDisk, whose flash memory chips are widely used in smartphones and cameras to store data, is increasingly using its chips to build and sell its own solid-state drives, which offer higher profit margins, to companies.

“(SanDisk) was already positioning the company as more of a enterprise storage company … what the Fusion-io deal does is it enhances that significantly,” Cross Research analyst Steven Fox said.

Solid-state drives (SSDs) are faster than traditional hard-disk drives, consume less power and are more shock resistant and durable as they do not have moving parts.

Although SSDs are still more expensive, they are increasingly being built into laptop PCs and tablets such as Apple Inc’s (AAPL.O) iPad.

Flash drives are also being adopted by data centers, a lucrative market where SanDisk competes with Fusion-io, Seagate Technology PLC (STX.O) and Western Digital Corp (WDC.O).

SanDisk’s offer of $11.25 per share represents a premium of 21 percent to Fusion-io’s Friday close.

Fusion-io’s shares were up 23 percent at $11.45 on Monday, suggesting that some investors were expecting a higher offer for the company.

Summit Research Partners analyst Srini Nandury said Sandisk not only got Fusion-io cheap, it got some of the marquee customers other vendors lacked.

Fusion-io’s customers include Apple and Facebook Inc (FB.O), which is building out its next-generation data centers this year.

Nandury said rival bids were unlikely as most big storage companies, including Western Digital and Toshiba (6502.T), bought flash-based SSD makers last year.

SanDisk’s SSD business has been growing at a scorching pace. Revenue from SSDs jumped 61 percent in the first quarter, accounting for 28 percent of revenue. The company expects the share of SSDs to grow to 40 percent of revenue by 2017.

Fusion-io is SanDisk’s fifth acquisition in the enterprise storage business, the most recent being its $307 million purchase of SMART Storage Systems last July.

The deal also makes the company less vulnerable to dramatic swings in prices of memory chips that have historically plagued the industry.

Fusion-io, which employs Apple co-founder Steve Wozniak as its chief scientist, has reported a loss for five quarters in a row.

“In terms of technology that Fusion-io has, it’s leading edge. It’s a question of someone being able to harness that … and drive it to profitability,” Fox said.

SanDisk said it expects the deal, likely to close in the third quarter, to add to its adjusted profit in the second half of 2015. The company’s shares were up 2 percent at $100.66 on the Nasdaq on Monday.

(Reporting by Sagarika Jaisinghani and Sruthi Ramakrishnan in Bangalore; Editing by Saumyadeb Chakrabarty)

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Exclusive: BNP hands years of oil trading files to U.S. in $10 billion probe

LONDON (Reuters) – French bank BNP Paribas (BNPP.PA), which is facing a potential $10 billion fine for breaking U.S. sanctions, has handed over to U.S. investigators files covering many years of its dealings with leading companies in the oil market.

A dozen former BNP insiders and senior trading executives said it had in recent months handed over a host of documents relating to its oil dealings with Sudan and Iran, including details on trading houses’ and oil majors’ involvement in the trades.

Before now, all that had been known about the probe was that U.S. authorities were investigating whether BNP evaded sanctions relating to Sudan, Iran and Cuba and if it stripped identifying information from related dollar wire transfers to be cleared by the U.S. financial system.

BNP declined to comment. It has said publicly only that it is in discussions with U.S. authorities about “certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions”.

The sources told Reuters that the probe has so far mostly focused on the bank’s dollar financing of oil trade out of Sudan – a much smaller producer than Iran – between 2002 and 2009, long after Washington imposed sanctions against the government in Khartoum in 1997 over human rights violations. It extended the sanctions in 2007.

They said BNP provided the lion’s share of trade financing to Chinese companies including Sinopec (600028.SS) and CNPC, which were the main importers of Sudanese crude during the period. The Chinese companies declined to comment.

Sudan’s oil production rose from around 200,000 barrels per day (bpd) in 2000 to a peak of almost 500,000 bpd in 2010, according to U.S. Energy Information Administration data.

Although China was and remains the main importer of crude from Sudan, BNP also provided trade finance to major global trading houses such as Trafigura and Vitol, which were also involved in trading Sudanese oil at the time.

The trading houses declined to comment.

Several of the sources said they believed the files did not contain compromising information against the trading houses and oil companies.

It was not clear if BNP provided the materials voluntarily.

The U.S. Department of Justice (DoJ) and the Manhattan District Attorney declined to comment.

“BNP has given all its files to the U.S. authorities. The full Monty,” a former BNP Paribas insider said.

“The information that it has provided certainly includes all counterparties,” a senior trading source said.

According to people familiar with the matter, U.S. authorities at one point suggested that BNP pay a penalty as high as $16 billion, though more recently they have been discussing $10 billion, which would still almost wipe out BNP’s entire 2013 pretax income.

France’s finance minister said on Sunday that talks about the fine between the bank and U.S. authorities had progressed towards a “more equitable” level.

The bank also faces the risk of being temporarily blocked from clearing U.S. dollar transactions.

2007 HALT

BNP and other non-U.S.-listed banks continued to finance oil trades in U.S. dollars out of Sudan following the imposition of U.S. sanctions in 1997, in the belief they were not violating those restrictions.

“Few people really believed that the mere fact that you were touching a U.S. dollar when you are not a U.S. bank when you are not doing it out of the U.S. was really breaching U.S. law,” a former senior BNP employee involved in the financing said.

BNP financed around 30 percent of oil exports from Sudan, but it halted trade with Sudan in July 2007, a month after the U.S. imposed new sanctions and two months after Nicolas Sarkozy was sworn in as French president with a promise to improve ties with Washington, the former senior BNP source said.

China’s national oil companies, which buy up most of the heavy-grade oil produced in Sudan to process in refineries, were enraged by the decision, according to one former executive.

Trading entities were then set up in Hong Kong, Singapore and Switzerland in order to continue the oil trade out of Sudan, several sources said.

It was not clear whether some of those entities were financed by BNP, an issue being investigated by the DoJ, according to the sources.

It was the world’s top financier of commodity trading throughout the 1990s and 2000s but has drastically reduced staffing in its Geneva and Paris offices in the past two years as it cut some of its riskier business and analyzed the implications of the ongoing U.S. investigation.

If that history left it exposed in Sudan, its business in Iran, OPEC’s second-largest oil producer after Saudi Arabia, could have wider implications, as the scale of its operations and the number of parties involved dwarf those in Sudan.

Iran was the target of a U.S. embargo after the 1979 Islamic revolution, but its oil became subject to an EU embargo only in 2012 as part of Western efforts to persuade Tehran to abandon its nuclear program.

(Additional reporting by Maya Nikolaeva, Aruna Viswanatha and Karen Freifeld; Editing by Will Waterman)

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Fischer sworn in as Fed vice chair, Brainard and Powell as board members

WASHINGTON (Reuters) – Stanley Fischer was sworn in as vice chair of the U.S. Federal Reserve and Lael Brainard took the oath of office to join the central bank’s board of governors, the Fed announced on Monday.

Current Fed board member Jerome Powell was sworn in to a new 14-year term.

The three were confirmed by the Senate last week. Brainard, a former top Treasury official, and Fischer, a noted academic and former Bank of Israel governor, will participate in their first Fed policy meeting on Tuesday and Wednesday.

The Fed holds a press conference on Wednesday to announce its latest economic projections and interest rate decision.

(Reporting by Howard Schneider; Editing by Paul Simao)

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