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Charter, Comcast explore wireless partnership with Sprint: sources

U.S. wireless carrier Sprint Corp (S.N) is in talks with Charter Communications Inc (CHTR.O) and Comcast Corp (CMCSA.O) about a partnership to boost the two U.S. cable companies’ wireless offerings, according to sources familiar with the matter.

Sprint, controlled by Japan’s SoftBank Group Corp (9984.T), has entered into a two-month period of exclusive negotiations with Charter and Comcast that has put its merger talks with U.S. wireless peer T-Mobile US Inc (TMUS.O) on hold till the end of July, the sources said on Monday.

A deal with Sprint would build on a partnership that Charter and Comcast announced last month. The two cable operators have agreed that they would not do deals in the wireless space for a year without each other’s consent.

Comcast has already unveiled plans for a wireless service, using its Wi-Fi hotspots and the airwaves of Verizon Communications Inc (VZ.N), the largest U.S. telecommunications provider, based on a deal between the two that dates back to 2011.

Comcast and Charter are now in talks with Sprint to secure a similar network-resale agreement on better terms, the sources said. A previous nine-year-old network-resale agreement between Comcast and Sprint was never activated, one of the sources added.

The Wall Street Journal, which first reported on the negotiations, also said that Charter and Comcast were in preliminary talks to take an equity stake in Sprint as part of an agreement. Such a deal would allow Sprint to invest more in its network, the newspaper added.

One of the sources said that a minority equity investment was being discussed but that it may not be part of any deal. Charter and Comcast could also look at jointly acquiring Sprint, but that is unlikely, the sources added.

Sprint, Comcast and Charter declined to comment.

An agreement with the cable providers over its network does not mean Sprint may not also seek a merger agreement with T-Mobile, which is controlled by Germany’s Deutsche Telekom AG (DTEGn.DE), the sources said.

Sprint sees the partnership as increasing competition in the market, which should help alleviate any antitrust concerns over a merger with T-Mobile, the source added.

Investors have long expected a deal between T-Mobile and Sprint, the third- and fourth-largest U.S. wireless service providers, anticipating cost cuts and other synergies in the range of $6 billion to $10 billion.

Three years ago, Sprint ended a previous round of talks to acquire T-Mobile amid opposition from U.S. antitrust regulators.

(Reporting by Arunima Banerjee in Bengaluru; Additional reporting by Anjali Athavaley; Editing by Sandra Maler and Muralikumar Anantharaman)

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Banks’ blockchain consortium picks IBM for trade finance platform

PARIS Tech giant IBM is building a blockchain-based platform for seven big European banks, including HSBC and Deutsche Bank, that is aimed at simplifying trade finance transactions for small- and medium-sized companies.

Trade finance was identified by a survey of banks carried out by IBM and the Economist Intelligence Unit last year as one of the top areas where blockchain – the underlying technology behind bitcoin – could have an impact.

Blockchain technology provides an electronic record-keeping and transaction-processing system, which lets all parties track documentation through a secure network and requires no third-party verification.

This contrasts with the present process – trade finance transactions typically involve a complicated paper trail that requires international courier services, is vulnerable to document fraud, and can take as long as a month to be completed.

“What we will have is a platform to bring buyers and sellers together and to make trade transactions very transparent from… the moment that a purchase order is issued up until payment,” said Hubert Bdenoot, general manager for trade finance at KBC, one of the banks in the consortium.

“The first service that will be available for buyers and sellers is financing and risk coverage, and it will also include a track-and-trade system so that buyers and sellers can follow the physical transfer of the goods,” he told Reuters.

The “Digital Trade Chain Consortium”, which also includes Societe Generale, Natixis, Rabobank and Unicredit, is aiming for the platform to be up-and-running and available for SMEs to use by the end of the year.

“There are over 20 million SMEs in Europe, and they provide around 85 percent of the jobs as well, so it’s a critical part of the economy and so anything that can facilitate growth in the SME community is going to help a lot,” said Keith Bear, vice president for financial markets and head of blockchain at IBM.

But KBC’s Bdenoot said the new platform was unlikely to suddenly revolutionize the market.

“I don’t think this is going to be something that enters the market and then all of a sudden half of the SMEs are on the platform – I don’t think that’s realistic,” he said.

“I think this is something that has to grow, but which will create a halo effect in the market.”

(Reporting by Jemima Kelly; editing by Susan Thomas)

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Carl Icahn to fund former Sargon co-manager Schechter’s new venture

Billionaire Carl Icahn’s investment firm, Icahn Enterprises LP (IEP.O), said on Monday it had entered an agreement with the former co-manager of its Sargon Portfolio, David Schechter, to fund his new private investment management business.

Last year, Icahn’s son, Brett Icahn, and David Schechter had said they would no longer be co-managers of the portfolio, and would instead stay on as consultants to exclusively advise Carl Icahn.

With the new agreement, the consulting agreement between Icahn Enterprises and Schechter would be terminated, while the one with Brett Icahn would remain.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shounak Dasgupta)

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Apple CEO touts India impact in push for deeper market access

Apple CEO Tim Cook on Sunday highlighted the economic impact the company is having on India in a meeting with its prime minister as the iPhone maker seeks deeper access to the world’s third-largest smartphone market behind the United States and China.

Cook met with Indian Prime Minister Narendra Modi at a business summit in Washington at a time when Apple Inc is targeting the nascent Indian market as a revenue source after its sales in China slipped.

Apple has asked Indian government officials for a range of tax and policy changes to help build out its iPhone assembly work in the country. It is seeking permission to open its own retail stores in India where it currently sells iPhones through resellers.

In his meeting with Modi, Cook disclosed that Apple expected its Indian operations to be run completely from renewable energy within the next six months, according to a person familiar with the discussion.

Cook reiterated that Apple had generated 740,000 jobs in India through its so-called “app economy” and Indian developers had created nearly 100,000 apps for the App Store, the person said.

Modi talked with Cook and other U.S. corporate leaders ahead of a meeting with President Donald Trump on Monday.

Apple, working with contract manufacturer Winstron, began assembling the iPhone SE in Bengaluru last month. Indian authorities have offered Apple tax concessions for the work with the requirement that more local components be used over time.

The company is looking to India after sales in the greater China region, once a major factor in Apple’s rise, fell 14 percent year over year to $10.7 billion in the most recent quarter.

Apple has not disclosed how much revenue it generates in India but said that sales grew by “strong double digits” there in the most recent quarter.

“We have a ton of energy going into the country on a number of fronts,” Cook told analysts about Apple’s efforts in India during the company’s most recent earnings call. “We believe, particularly now that the 4G infrastructure is going in the country and it’s continuing to be expanded, there is a huge opportunity for Apple there.”

(Reporting by Stephen Nellis in San Francisco; Editing by Andrew Hay)

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Amtrak names former Delta executive as next CEO

WASHINGTON Amtrak on Monday named a former Delta Air Lines (DAL.N) chief to lead the U.S. passenger rail carrier as it embarks on a major renovation of its busiest U.S. hub following years of disruptions and delays along the Northeast Corridor.

Richard Anderson, who spearheaded Delta’s growth into the world’s largest airline by market value when he retired as chief executive in May 2016, will become president and co-CEO on July 12, two days after Amtrak launches the rebuilding program at New York City’s Pennsylvania Station.

He and Wick Moorman, who became CEO in September and recruited Anderson, will share the top job until Dec. 31. Moorman will then become an advisor to the company, Amtrak said in a statement.

The repairs, estimated to cost $30 million to $40 million over several years, was expedited after recent derailments and other problems from decaying infrastructure left hundreds of thousands of commuters delayed throughout the greater New York City area. It is expected to cause major service disruptions this summer across the metropolitan region.

The project has caused a rift between Amtrak, the station owner, and the two states that use most of the hub’s track space, New York and New Jersey.

The Trump administration in May proposed ending $630 million in subsidies for Amtrak to operate long-distance train service, out of $1.4 billion in annual government support for passenger rail service.

For the year ending Sept. 30, Amtrak posted its highest ever total revenue of $3.2 billion and had a record 31.3 million passengers, with more than one-third of them in the Northeast Corridor. Its unaudited operating loss of $227 million was the smallest since 1973.

Airlines and Amtrak compete for passengers, especially on busy routes between Boston and Washington.

Anderson was among the most outspoken U.S. airline industry leaders. He assumed Delta’s top job in 2007 and led the company through a merger with Northwest Airlines in 2008.

During his tenure, Delta outpaced its peers in on-time performance, grew rapidly in top business markets such as New York and acquired stakes in airlines in the United Kingdom, China, Mexico and Brazil.

Amtrak Chairman Anthony Coscia said in an interview on Monday that Anderson had transformed Delta from a bankrupt airline, from 2005 to 2007, “to one that was considered the industry standard for customer service.”

He noted the challenge of serving record passenger rail traffic in an industry that has been underinvested for decades.

Moorman retired in 2015 as chairman, CEO and president of Norfolk Southern Corp (NSC.N) before taking the helm at Amtrak.

(Reporting by David Shepardson; Editing by Richard Chang)

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GM lowers outlook for U.S. 2017 new vehicle sales

DETROIT General Motors Co (GM.N) now expects U.S. new vehicle sales in 2017 will be in the “low 17 million” unit range, reflecting a widespread expectation that the industry is headed for a moderate downturn, a top executive said on Monday.

“The market is definitely slowing … it’s something we are going to monitor month to month,” Chief Financial Officer Chuck Stevens told analysts on a conference call. “Pricing is more challenging.”

U.S. new vehicle sales hit a record of 17.55 million units in 2016 after a boom that began in 2010. A glut of nearly-new used vehicles is expected to undermine sales this year. Major automakers have reported sales declines for the past three months.

GM had previously announced it expected 2017 new vehicle sales in the “mid-17 million” unit range. Stevens told analysts that sales could fall by 200,000 to 300,000 units this year but that the automaker had “somewhat insulated” itself from a downturn by reducing fleet sales, which lower vehicles’ residual values.

“We are going to remain disciplined from a go-to market perspective,” Stevens said.

He reiterated the company’s target to bring U.S. inventories of its vehicles down to 70 days’ supply by December from 110 days in June.

GM also expects a higher-than-expected charge for its sale of Opel to Peugeot SA (PSA) PEUPP.PA to reach $5.5 billion versus its previous estimate of $4.5 billion due to additional costs associated with the deal.

The company plans to issue $3 billion in short-term debt to cover pension liabilities that PSA will assume in order to finalize the transaction quickly, GM’s CFO said.

(Reporting by Nick Carey; Editing by Leslie Adler and Tom Brown)

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Google set to face record EU antitrust fine as soon as Tuesday: sources

PARIS EU antitrust regulators are likely to impose a record fine on Alphabet (GOOGL.O) unit Google over its shopping service as soon as Tuesday, two people familiar with the matter said on Monday, concluding one of three cases against the company.

The European Commission’s case was triggered by scores of complaints from both U.S. and European rivals, leading to a seven-year-long investigation into the world’s most popular internet search engine.

The EU competition authority charged Google in April 2015 with distorting internet search results to favor its shopping service, harming both rivals and consumers.

The Commission declined to comment.

Google said: “We continue to engage constructively with the European Commission and we believe strongly that our innovations in online shopping have been good for shoppers, retailers and competition.”

The company has said regulators ignored competition from online retailers Amazon (AMZN.O) and eBay Inc (EBAY.O).

Reuters exclusively reported on June 1 that the EU competition enforcer aimed to sanction the company before the summer break in August.

Companies found guilty of infringing EU antitrust rules can be fined as much as 10 percent of their global turnover, which in Google’s case could be about $9 billion of its 2016 turnover but it is not expected to reach this level.

A 1.06 billion euro fine handed down to U.S. chipmaker Intel in 2009 is the highest to date.

Apart from the fine, the Commission will tell Google to stop its alleged anti-competitive practices but it is not clear what measures it will order the company to adopt to ensure that rivals get equal treatment in internet shopping results.

The Commission’s tough line is in sharp contrast with the U.S. Federal Trade Commission which settled its own web search case with the company in 2013 by requiring Google to stop “scraping” reviews and other data from rival websites for its own products.

(Reporting by Foo Yun Chee; Editing by Adrian Croft)

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U.S. activist presses for ‘bold action’ at Nestle

LONDON/NEW YORK U.S. activist shareholder Third Point has targeted Nestle (NESN.S) by taking a $3.5 billion stake in the food maker and urging Europe’s most valuable company to boost returns as demand for its products weakens.

Nestle shares jumped as much as 4.8 percent on Monday, touching a record high after Third Point disclosed its position late on Sunday in a letter on its website that urged the Swiss group to improve margins, buy back shares and get rid of non-core businesses, including its stake in L’Oreal (OREP.PA).

Despite the Nestle stake being only about 40 million shares — or 1.3 percent of the total — shareholders hoped it would spark change at a company which has a reputation for being slow-moving and insular.

“Nestle has arguably been lackadaisical and complacent and underperformed its potential,” Bernstein analysts said. “It might now be stirred into action by an external force.”

The stake is the largest ever taken by the New York-based hedge fund run by American investor Dan Loeb, which has pressed for change at U.S. internet firm Yahoo and Japan’s Sony Corp (6758.T).

It comes as Nestle and its packaged goods rivals grapple with slowing emerging markets, pressure on prices and consumers shifting from traditional brands toward healthier, fresher fare.

Nestle has missed its long-term sales target for four straight years, but so far has eschewed radical moves like Danone’s (DANO.PA) $12.5 billion purchase of WhiteWave or Reckitt Benckiser’s (RB.L) $16.6 billion Mead Johnson deal.

It has instead pushed slowly into healthcare, with a series of small investments and acquisitions that blur the boundaries of food and medicine.

The company, which is based on the shores of Lake Geneva and makes Nescafe coffee, Maggi noodles and Gerber baby food, said it was committed to its strategy under new Chief Executive Mark Schneider.

“As always, we keep an open dialogue with all of our shareholders and we remain committed to executing our strategy and creating long-term shareholder value,” a Nestle spokesman said. “Beyond that, we have no specific comment.”

One top-40 investor said Nestle has done a good job adapting over the years to a changing industry, selling its stake in eyecare company Alcon and buying pet food business Ralston Purina and Wyeth Nutrition.

“The pace of change may be too slow for some, but we would argue that it is better to be slow than to respond quickly to the demands of people who have only been on the share register for a few days or weeks,” the investor said, speaking on condition of anonymity.


The move by Third Point cranks up pressure on Schneider, who joined in January just before the sector was rocked by Kraft Heinz’s (KHC.O) abortive $143 billion approach for Unilever (ULVR.L). He has already been looking at ways to reignite growth since joining from German healthcare group Fresenius (FREG.DE).

The first CEO from outside Nestle in nearly a century, his appointment was seen as an acknowledgement that Nestle needed new thinking. He has already scrapped the company’s long-standing sales target and said it might sell its U.S. confectionery business, which includes brands such as Baby Ruth and Butterfinger.

Nestle had a market value of $263 billion on Friday, making it the biggest traded company in Europe. Monday’s share price rise added another $10 billion to that figure.

The consumer goods sector, home to usually reliable sales and dividends, has seen its share of investor activism in the past with mixed results. Before Nestle, the latest big bet was the $3.5 billion stake in Procter Gamble (PG.N) disclosed by Trian Partners in February.

Across the board, activists publicly targeted 37 European companies in the first four months of 2017, according to the most recent data from Activist Insight.

U.S. activist hedge funds have slowly cast their nets wider as corporate America becomes saturated with dissident shareholders seeking rapid changes to boost share prices.


“We feel strongly that in order to succeed, Dr. Schneider will need to articulate a decisive and bold action plan that addresses the staid culture and tendency toward incrementalism that has typified the company’s prior leadership and resulted in its long-term underperformance,” Third Point wrote in a letter to its investors.

It argued that Nestle should sell its 23 percent stake in French cosmetics firm L’Oreal, which was worth about $27 billion on Friday. L’Oreal shares rose 4.1 percent on Monday.

It also said Nestle should set a formal profit margin target of 18 percent to 20 percent by 2020 in order to help improve productivity. Nestle’s current margin is 15.3 percent, below Unilever’s 16.4 percent but higher than Danone’s 13.8 percent.

Following its rejection of the Kraft bid, Unilever set a target to reach 20 percent margin by 2020, while Danone is targeting a margin in excess of 16 percent.

Third Point also recommended Nestle more than double its debt load, as well as sell the L’Oreal stake, in order to generate the capital to buy back stock.

Vontobel analyst Jean-Philippe Bertschy said Third Point’s suggestions echoed proposals long made by other shareholders.

“Previous management was not too open to listen to critics,” he said. “Now with Mr. Schneider, one of his top priorities was to improve shareholder communication and investor relations. I think he’s listening carefully to what investors are saying.”

Third Point’s roughly 40 million shares in Nestle would make it the company’s eighth-largest shareholder, according to Thomson Reuters data.

The stake is relatively small but Microsoft’s (MSFT.O) experience with ValueAct Capital shows that public agitation from a small base can gain traction with other shareholders.

(Additional reporting by Simon Jessop and Maiya Keidan in London, Michael Flaherty in New York and Parikshit Mishra in Bengaluru; Editing by Mark Potter and Keith Weir)

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Japanese airbag maker Takata files for bankruptcy, gets Chinese backing

TOKYO/WASHINGTON Japan’s Takata Corp (7312.T), at the center of the auto industry’s biggest-ever product recall, filed for bankruptcy protection in the United States and Japan, and said it had agreed to be largely acquired for $1.6 billion by the Chinese-owned U.S.-based Key Safety Systems.

In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits. Its airbag inflators have been linked to at least 16 deaths and 180 injuries around the world because they can rupture and send metal fragments flying. TK Holdings, its U.S. operations, filed Chapter 11 bankruptcy in Delaware on Sunday with liabilities of $10 billion to $50 billion, while the Japanese parent filed for protection with the Tokyo District Court early on Monday.

Scott Caudill, chief operating officer of TK Holdings, said in a court affidavit that the company “faces insurmountable claims” relating to the recalls and owes billions of dollars to automakers. He disclosed that Takata has recalled, or expects to recall, by 2019 about 125 million vehicles worldwide, including more than 60 million in the United States.

Takata’s total liabilities stand at 1.7 trillion yen ($15 billion), Tokyo Shoko Research Ltd estimated.

Final liabilities would depend on the outcome of discussions with carmaker customers who have borne the bulk of the replacement costs, a lawyer for the company said.

The filings open the door to the financial rescue by Key Safety Systems (KSS), a Michigan-based parts supplier owned by China’s Ningbo Joyson Electronic Corp (600699.SS).

In a deal that took 16 months to hammer out, KSS agreed to take over Takata’s viable operations, while the remaining operations will be reorganized to continue churning out millions of replacement airbag inflators, the two firms said.

The U.S. company would keep “substantially all” of Takata’s 60,000 employees in 23 countries and maintain its factories in Japan. The agreement is meant to allow Takata to continue operating without interruptions and with minimal disruptions to its supply chain.

“We believe taking these actions in Japan and the U.S. is the best way to address the ongoing costs and liabilities of the

airbag inflator issues with certainty and in an organized manner,” Takata CEO Shigehisa Takada said in a statement.

The remainder of Takata assets will be reorganized to produce replacement inflators, but it is not clear how long they will operate.

Takata said it plans to continue building older model inflators for as long as five years at plants in China, Washington state and Mexico. It will not continue producing those inflators at a plant in Germany.

CEO Takada said he and top management would resign “when the timing of the restructuring is set.” His family – which still has control of the 84-year-old company – likely would cease to be shareholders.

Takata in February pleaded in a U.S. federal court to a felony charge as part of a $1-billion settlement that included compensation funds for automakers and victims of its faulty airbag inflators. The company expects to honor the terms of the agreement and pay the $850 million due for automaker compensation. Three former senior Takata executives were charged in January in a U.S. court with falsifying test results but have not made a court appearance.

About two-thirds of 46.2 million recalled Takata inflators in the United States have not been fixed. In June 2016, federal regulators said inflators in 2001-2003 model Honda and Acura vehicles have up to a 50-percent chance of a dangerous airbag inflator rupture in a crash and urged owners to stop driving until repairs were made.

The companies expect to seal definitive agreements for the sale in coming weeks and complete the twin bankruptcy processes in the first quarter of 2018.

Takata warned in bankruptcy documents that if it does not complete the restructuring by March and complete payments owed under the deal, the Justice Department could withdraw the plea agreement and seek higher penalties.

It also faces hundreds of lawsuits and claims in the United States, Mexico and Canada, including consumer protection lawsuits filed by three states and 100 personal injury and wrongful death claims. A judge in the U.S. Virgin Islands action had ordered Takata recently to pay $8 million into an escrow account but the payment has not been made, Takata said.

Honda Motor Co (7267.T), Takata’s biggest customer, said it had reached no final agreement with Takata on responsibilities for the recall. Honda said it would continue talks with the supplier but anticipated difficulties in recovering the bulk of its claims.


Takata faces billions in lawsuits and recall-related costs to its clients, including Honda, BMW (BMWG.DE), Toyota Motor Corp (7203.T) and others, which have been paying recall costs to date.

It also faces potential liabilities stemming from class

action lawsuits in the United States, Canada and other


Industry sources have said that recall costs could climb to about $10 billion.

The ammonium nitrate compound used in the airbags was found to become volatile with age and prolonged exposure to heat, causing the devices to explode.

Costs so far have pushed the company into the red for three years, and it has been forced to sell subsidiaries to pay fines and other liabilities.

Founded as a textiles company in 1933, Takata began producing airbags in 1987 and at its peak became the world’s No.2 producer of the safety products. It also produces one-third of all seat belts used in vehicles sold globally, along with other components.

The Tokyo Stock Exchange said its shares would be delisted on July 27. The stock has collapsed 95 percent since January 2014.

(Additional reporting by David Shepardson in Washington, Tom Hals in Wilmington, Delaware and Maki Shiraki in Tokyo)

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