News Archive


Pfizer to invest $350 million in China biotech hub, first in Asia


SHANGHAI Pfizer Inc (PFE.N) will invest $350 million to build a biotech center in China, the latest in a series of moves by pharma industry giants to set up shop in the world’s no. 2 drugs market with the aim of securing faster approvals for their products.

The facility in eastern Hangzhou region – Pfizer’s first biotech center in Asia – is expected to be completed by 2018, the firm said in a statement on Tuesday.

Global “Big Pharma” is increasingly looking for smart ways to tap China’s healthcare market, estimated by consultancy IMS Health to be worth around $185 billion by 2018. From investing in China facilities to acquisitions, licensing deals and joint ventures, the aim is to seek an edge in dealings with domestic regulators and government.

John Young, group president for Pfizer’s essential health division, said in the statement that the Hangzhou facility should “help support China’s aim to increase the complexity and value of its manufacturing sector by 2025”.

Pfizer said it would “work closely” with local regulators to bring the drugs “to market as soon as possible”. The center will mostly on biologic drugs – made from living micro-organisms rather than chemically synthesized – and lower-cost ‘biosimilars’, of generic versions of biologics.

Pharmaceutical executives have long complained about the slow process of getting drugs to market in China, while others have run up against regulatory roadblocks. Pfizer had to close its vaccine business in the country last year after a license for its top-selling vaccine Prevenar was not renewed.

China’s overall healthcare spending is set to hit $1.3 trillion by 2020, but drug market growth has slowed to a low single-digit percentage pace from over 20 percent just four years ago as branded generics have lost their shine and Beijing has looked to drive down prices to keep a lid on costs.

(Reporting by Adam Jourdan; Editing by Kenneth Maxwell)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/9wHXGX0VIWg/us-pfizer-china-idUSKCN0ZE0A8

Volkswagen’s U.S. diesel emissions settlement to cost $15 billion: source


WASHINGTON Volkswagen AG’s (VOWG_p.DE) settlement with nearly 500,000 U.S. diesel owners and government regulators over polluting vehicles is valued at more than $15 billion cash, two sources briefed on the matter said on Monday.

The settlement, to be announced on Tuesday in Washington, includes $10.033 billion to offer buybacks to owners of about 475,000 polluting vehicles and nearly $5 billion in funds to offset excess diesel emissions and boost zero emission vehicles, the sources said.

A separate settlement with nearly all U.S. state attorneys general over excess diesel emissions will be announced on Tuesday and is expected to be more than $500 million and will push the total to over $15 billion, a separate source briefed on the matter said.

Spokeswomen for U.S. Environmental Protection Agency and Volkswagen declined to comment.

Speaking on condition of anonymity, due to court-imposed gag rules, the first sources said that owners of 2.0 liter diesel VW 2009-2015 cars will receive at least $5,100 compensation along with the estimated value of the vehicles as of September 2015, before the scandal erupted. Some owners will get as much as $10,000 in compensation, the first sources said, depending on the value of the car.

The $10.033 billion is the maximum VW could pay if it had to buyback all vehicles, but the actual amount VW will pay could be significantly less if a large number of owners take buybacks.

Prior owners will get half of current owners, while people who leased cars will also get compensation, said the first sources.

Owners would also receive the same compensation if they choose to have the vehicles repaired, assuming U.S. regulators approve a fix at a later date.

The settlement includes $2.7 billion in funds to offset excess diesel emissions and $2 billion in VW investments in green energy and zero emission vehicle efforts, the first sources said. The diesel offset fund could rise if VW has not fixed or bought back 85 percent of the vehicles by mid-2019, the first sources said.

The $2 billion in green energy and zero emission efforts will be spent over 10 years, the first sources said, and will include zero emission vehicle infrastructure.

The settlement, the largest ever automotive buyback offer in U.S. history and most expensive auto industry scandal, stems from the German automaker’s admission in September 2015 that it intentionally misled regulators by installing secret software that allowed U.S. vehicles to emit up to 40 times legally allowable pollution.

The company’s top U.S. executive, Michael Horn, was summoned to testify before Congress and in the days after the emissions scandal broke he said the company had been dishonest. “In my German words: We totally screwed up. We must fix those cars,” said Horn, who left the company in March.

VW still must reach agreement with regulators on whether it will offer to buyback 85,000 larger 3.0 liter Porsche, Audi and VW cars and SUVs that emitted up to nine times legally allowable pollution and how much it may face in civil fines for admitting to violating the Clean Air Act.

Erik Gordon, a University of Michigan business professor, said “VW had little negotiating power, given the evidence. The costs of the remedies should make automakers cautious about misleading people in ways that give prosecutors the ability to bring criminal charges. Potential criminal charges mean you open your wallet in the civil actions, hoping to receive leniency instead of jail time.”

Reuters reported earlier the initial VW settlement would not include civil penalties under the U.S. Clean Air Act or address about 85,000 larger 3.0 liter Audi, Porsche and VW vehicles that emitted less pollution than 2.0 liter vehicles. A deal covering the 3.0 liter vehicles may still be months away.

The settlement does not address lawsuits from investors or a criminal investigation by the Justice Department.

Regulators will not immediately approve fixes for the 2.0 liter vehicles – and may not approve fixes for all three generations of the polluting 2009-2015 vehicles, sources previously told Reuters.

Owners will have until December 2018 to decide whether to sell back vehicles and fixes may not eliminate all excess emissions.

VW cannot resell or export the vehicles bought back unless EPA approves a fix, Reuters reported last week.

VW, the world’s second largest automaker, has seen U.S. VW brand sales suffer in the wake of the crisis. VW brand sales are down 13 percent in the United States in 2016, while sales of its luxury Audi and Porsche units have risen.

U.S. District Judge Charles Breyer in San Francisco will hold a hearing on July 26 to decide on whether to grant preliminary approval to the settlements. If granted he would hold a later hearing to give final approval. Buybacks are likely to start no earlier than October, the first sources said.

In April, VW set aside $18.2 billion to account for the emissions scandal.

VW had said the scandal impacted 11 million vehicles worldwide and led to the departure of CEO Martin Winterkorn.

Last week, Germany’s financial watchdog called on prosecutors to investigate VW’s entire former management board over the time it took to disclose the carmaker’s emissions test cheating, a person familiar with the matter told Reuters.

German prosecutors said this month they are investigating Winterkorn and a second unidentified executive over whether they effectively manipulated markets by delaying the release of information about the firm’s emissions test cheating.

(Reporting by David Shepardson, editing by G Crosse and Bernard Orr)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/EFHDI6Zl8jk/us-volkswagen-emissions-settlement-idUSKCN0ZD2S5

Viacom board rejected offer for director to meet Sumner Redstone


NEW YORK/SAN FRANCISCO Viacom Inc’s (VIAB.O) board rejected an offer by Sumner Redstone’s attorneys to have one of Viacom’s independent directors meet face-to-face with the 93-year-old media mogul to get an understanding of his views on the media company, a spokesman for Redstone confirmed on Monday.

The board’s dismissal of a possible route toward a settlement shows how far apart the two sides are in the legal fight for control over Redstone’s $40 billion media empire, amid questions over whether the magnate is making his own decisions or is even of sound enough mind to do so.

Redstone offered to meet Viacom independent director Charles Phillips in the days after Viacom lead independent director Fred Salerno filed suit over Redstone’s June 16 move to oust him and four other directors, including Viacom CEO Philippe Dauman, from the Viacom board, Reuters exclusively reported Monday.

Last week Salerno vetoed the idea, opting instead to continue with litigation, sources told Reuters.

Salerno and Phillips declined to comment. In a statement, Viacom did not confirm or deny it received such an offer from Redstone. But did say it would be wrong to suggest such a meeting could “actually assess” Redstone’s capacity.

Salerno has sent a number of letters to Redstone over the past several weeks requesting a meeting with him to discuss his views of the business, and to go over the rationale for Dauman’s planned stake sale of Viacom’s Paramount movie studio.

“We are quite concerned that your voice – and views – are not being heard,” Salerno wrote in a June 14 letter, made public by Viacom.

The fact that the Viacom board rejected Redstone’s offer of a meeting with Phillips showed claims by Viacom executives and Salerno that they are being blocked from meeting with Redstone are “fiction,” said Mike Lawrence, a spokesman for Redstone, in a statement.

“Fred Salerno, Philippe Dauman, and (Viacom board member) George Abrams have repeatedly told the courts that the Viacom board is being blocked from meeting with Sumner, leaving them no choice but to pursue claims,” Lawrence said in the statement. “That fiction has been shattered.”

Viacom called those statements both inaccurate and incomplete.

“The one fact not in question is that an examination to assess Mr. Redstone’s capacity and undue influence needs to happen,” the company said in a statement.

For investors, the impasse could mark the beginning of a long legal battle that will prolong the uncertainty over the future of Viacom. The company’s shares closed down 5.1 percent on Monday, in a broadly lower market.

Redstone’s privately held movie holding company, National Amusements Inc, owns 80 percent of the voting shares of Viacom as well as CBS Corp (CBS.N). On June 16, when National Amusements moved to oust the five directors from the board, investors told Reuters they hoped a change in management or a merger between CBS and Viacom could be on the horizon.

On the same day, National Amusements asked a Delaware court to affirm the changes, while Salerno shot back with his own suit seeking to block the move, calling it “invalid” and the result of Redstone’s daughter Shari Redstone manipulating her father.

A Delaware judge said last week that he would schedule a hearing in July in a case about whether National Amusements’ move was valid.

(Reporting by Jessica Toonkel in New York and Dan Levine in San Francisco; Editing by Bill Rigby and Andrew Hay)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/W6Rh2e2AWhE/us-viacom-redstone-exclusive-idUSKCN0ZD2O9

Texas ex-tycoon Wyly ordered to pay $1.1 billion for tax fraud


A federal bankruptcy judge in Texas on Monday ordered former billionaire Sam Wyly to pay $1.11 billion in back taxes, interest and penalties after finding he committed tax fraud by shielding much of his family’s wealth in offshore trusts.

U.S. Bankruptcy Judge Barbara Houser in Dallas calculated the payout after ruling on May 10 that Wyly and his late brother Charles conducted a “deceptive and fraudulent” scheme to cheat the Internal Revenue Service.

The payout includes roughly $135.5 million of taxes, $402.1 million of interest, and $570.1 million of penalties.

A lawyer for Sam Wyly could not immediately be reached for comment.

The Wylys were once among Dallas’ most prominent families, building their fortune on holdings in such companies as arts-and-crafts chain Michaels Stores Inc and Sterling Software Inc.

Sam Wyly, now 81, appeared on Forbes magazine’s list of the 400 richest Americans as recently as 2010.

But he and his brother were sued that year by the U.S. Securities and Exchange Commission, for allegedly using a web of trusts in the Isle of Man and Cayman Islands to hide stock sales from 1992 to 2004 in Michaels, Sterling and two other companies.

The SEC said the Wylys did this in part out of concern that investors would view the sales as a bearish sign.

Charles Wyly died in a car crash in August 2011, and the government thereafter pursued claims against his estate.

Sam Wyly filed for bankruptcy protection in October 2014 after he and his brother’s estate were held liable in the SEC case, for an amount the regulator estimated at $299.4 million.

Charles’ widow Caroline “Dee” Wyly filed for bankruptcy protection the same month.

In her May 10 ruling, Houser said Dee Wyly was not liable for tax fraud, and had not known what went on offshore.

The case is In re: Samuel E. Wyly et al, U.S. Bankruptcy Court, Northern District of Texas, No. 14-35043.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/EpbzC8Z5Ii0/us-bankruptcy-payout-wyly-idUSKCN0ZD2Y9

FCC chair proposes retaining most media ownership rules


WASHINGTON The chairman of the U.S. Federal Communications Commission on Monday proposed retaining most rules limiting cross ownership of newspapers, radio and TV stations in the same market, according to a document reviewed by Reuters.

FCC chairman Tom Wheeler proposed retaining the existing rules barring companies in most instances from owning a newspaper and a broadcast TV or radio station in the same market, as well as other individual market limits on radio and TV stations with “slight modification,” according to the summary of a proposal to fellow commissioners seen by Reuters. Congress had ordered the commission in 1996 to review cross ownership rules every four years but the FCC last completed a review in 2006.

(Reporting by David Shepardson; Editing by Tom Brown)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/XajuBSRy-4M/us-usa-media-rules-idUSKCN0ZD2QC

Exclusive: Viacom lead director turned down offer for another director to meet Sumner Redstone


NEW YORK/SAN FRANCISCO Viacom Inc’s (VIAB.O) lead independent director Frederic Salerno vetoed an offer by Sumner Redstone’s attorneys to have another of Viacom’s independent directors meet face-to-face with the 93-year-old media mogul to get an understanding of his views on the media company, two sources familiar with the situation told Reuters on Monday.

Salerno’s dismissal of a possible route toward a settlement shows how far apart the two sides are in the legal fight for control over Redstone’s $40 billion media empire, amid questions over whether the magnate is making his own decisions or is even of sound enough mind to do so.

In the days after Salerno filed suit over Redstone’s move on June 16 to oust him and four other directors, including Viacom CEO Philippe Dauman, from the Viacom board, Redstone offered to meet with Viacom independent director Charles Phillips, the sources said.

Last week Salerno vetoed the idea, opting instead to continue with litigation, the sources said.

A spokesman for Redstone could not immediately provide comment. Viacom and Phillips declined comment.

For investors, the impasse could mark the beginning of a long legal battle that will prolong the uncertainty over the future of Viacom. The company’s shares closed down 5.1 percent on Monday, in a broadly lower market.

Redstone’s privately held movie holding company, National Amusements Inc, owns 80 percent of the voting shares of Viacom as well as CBS Corp (CBS.N). On June 16, when National Amusements moved to oust the five directors from the board, investors told Reuters they hoped a change in management or a merger between CBS and Viacom could be on the horizon.

On the same day, National Amusements asked a Delaware court to affirm the changes, while Salerno shot back with his own suit seeking to block the move, calling it calling it “invalid” and the result of Redstone’s daughter Shari Redstone manipulating her father.

A Delaware judge said last week that he would schedule a hearing in July in a case about whether National Amusements’ move was valid.

(Reporting by Jessica Toonkel in New York and Dan Levine in San Francisco; Editing by Bill Rigby)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/W6Rh2e2AWhE/us-viacom-redstone-exclusive-idUSKCN0ZD2O9

Kraft, Mondelez must face wheat price-rigging lawsuit: U.S. judge


A federal judge in Chicago on Monday refused to dismiss a lawsuit in which wheat futures and options traders accused Kraft Heinz Co and Mondelez International Inc of illegally manipulating the grain’s price at their expense.

U.S. District Judge Edmond Chang said traders may pursue claims that a large and, in their view, unnecessary late 2011 purchase by Kraft Foods Inc of wheat futures contracts violated the Sherman antitrust law and the Commodity Exchange Act.

In a 66-page decision, Chang also dismissed claims that the defendants conducted offsetting “wash trades” over roughly a decade to create an illusion of greater market activity. He said the traders can try to bring those claims again.

Kraft and Mondelez were named as defendants because most of the alleged suspicious activity occurred before Kraft Foods Inc split in two in 2012. Mondelez’s brands now include snack foods such as Oreos, Ritz crackers and Wheat Thins.

A Kraft Heinz spokesman declined to comment. Mondelez did not immediately respond to a request for comment.

Vincent Briganti, a lawyer for the traders, said he was pleased the court found “multiple viable claims.”

Many allegations were similar to those raised by the U.S. Commodity Futures Trading Commission in an April 2015 lawsuit.

The CFTC said Kraft Foods bought $90 million of December 2011 wheat futures, giving it a dominant position in that market, despite never intending to take possession of the grain.

It said Kraft Foods did so to depress prices in the cash wheat market, because sellers might believe the company needed less wheat, and inflate futures prices. It said the strategy led to more than $5.4 million of illegal profit.

Last December, another judge rejected a defense motion to dismiss the CFTC lawsuit. The companies have said Mondelez expects to bear most costs from the CFTC case.

Kraft merged last year with H.J. Heinz Co to create Kraft Heinz, whose products include Kraft cheese, Heinz ketchup, Oscar Mayer deli meats and Maxwell House coffee.

Warren Buffett’s Berkshire Hathaway Inc owns a roughly 26.8 percent stake in Kraft Heinz. The case is Ploss v. Kraft Foods Group Inc et al, U.S. District Court, Northern District of Illinois, No. 15-02937.

(Reporting by Jonathan Stempel in New York; Editing by Alan Crosby and Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_eFLo8O01jY/us-kraft-heinz-mondelez-intl-wheat-lawsu-idUSKCN0ZD2IJ

Stocks drop for second day after Brexit vote


NEW YORK Wall Street tumbled again on Monday after Britain’s shock vote to leave the European Union, sending major U.S. stock indexes to their worst two-day swoon in about 10 months.

The Dow Jones industrial average .DJI fell 260.3 points, or 1.5 percent, to 17,140.45, the SP 500 .SPX lost 36.85 points, or 1.81 percent, to 2,000.56 and the Nasdaq Composite .IXIC dropped 113.54 points, or 2.41 percent, to 4,594.44.


(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_0-Pt-fs0c4/us-usa-stocks-idUSKCN0ZD1EA

Brent crude tumbles to seven-week low on dollar rally, Brexit turmoil


NEW YORK Crude prices tumbled nearly 3 percent on Monday, with Brent hitting seven-week lows, as a rallying dollar and market uncertainty over Britain’s shocking vote to exit the European Union threatened to sap more strength from oil’s rebound this year.

Brent and U.S. crude have lost almost 8 percent since Thursday’s settlement – the biggest two-day drop in nearly five months – after the so-called Brexit vote sent global risk assets plummeting and safe havens such as the dollar, U.S. Treasuries and gold rallying.

Brent settled down $1.25, or 2.6 percent, at $47.16 a barrel. It fell to a seven-week low of $46.69 during the session.

U.S. crude fell $1.31, or 2.8 percent, to settle at $46.33. The intraday low of $45.83 matched a one-month trough hit on June 17.

Market intelligence firm Genscape’s report of a draw of more than 1.3 million barrels at the Cushing, Oklahoma, delivery point for U.S. crude futures provided little support to prices.

Despite sharp intermittent tumbles, oil has maintained a broadly upward momentum to post monthly gains since February. Earlier, a global supply glut had nearly halved crude prices since mid-2014.

“From a chart standpoint, I think that there may be some shorter-term longs that need to liquidate, and I would think with global volatility continuing to rally, their propensity to liquidate is higher,” said Scott Shelton, energy broker with ICAP in Durham, North Carolina.

“The issue that may suggest that the majority of the longs won’t liquidate is that they are very strong longs as most of it was accumulated below or around the $40 level in WTI. While fundamentals according to the banks are still strong, there are signs that the market’s perception of the fundamentals may be changing.”

Hedge funds betting on summer gasoline demand raised their bullish bets on U.S. crude futures just before the market’s crash on Friday, trade data showed.

Analysts at Goldman Sachs and a few other research houses sought to allay fears over the impact of the Brexit crisis on oil specifically.

Goldman said even if U.K. economic growth suffered a 2 percent drop, Britain’s oil demand would likely be reduced by only 1 percent or 0.016 percent of global demand.

“This is extremely small on any measure,” it said.

The British pound hit 31-year lows and the dollar a 3-1/2 month high. The greenback’s rally made oil and other dollar-denominated commodities less attractive to holders of other currencies.

(Additional reporting by Ahmad Ghaddar and Nina Chestney in LONDON, Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/rOfiIXTwXMU/us-global-oil-idUSKCN0ZC15C