Johnson & Johnson to pay $30 billion for Europe’s biggest biotech company Actelion

US healthcare giant Johnson & Johnson is to buy Actelion, Europe's biggest biotech company – paying $30 billion (28 billion euros).

The purchase gives Johnson & Johnson access to the Swiss group's highly profitable range of medicines for rare diseases.

The deal represents a 23 percent premium to Actelion's closing price on Wednesday and is more than 80 percent above the November 23 closing price before takeover reports first emerged.

Royal Bank of Scotland sets aside 3.92 billion pounds to settle claims of U.S. loan mis-selling

Royal Bank of Scotland
morebyless/flickr.com

Royal Bank of Scotland (RBS.L) has taken a 3.1 billion pound ($3.92 billion) provision as it prepares to settle claims in the United States that it mis-sold toxic mortgage-backed securities in the run up to the 2008 financial crisis.

The provision means that state-backed RBS is unlikely to make a profit in 2016, the ninth straight year the bank has failed to make an annual profit.

RBS is preparing to start negotiations with the U.S. Department of Justice over a settlement of the mis-selling claims, the timing of which is still uncertain.

“This bank, and of course the British taxpayers, have paid a very heavy price for the decisions that were made at RBS before the crisis,” RBS Chief Executive Ross McEwan said on a conference call with reporters on Thursday.

“Today's announcement is yet another painful example of that legacy,” he said.

This is the first time that RBS has set aside any money to directly cover a settlement with the U.S. Department of Justice over the alleged decades-old mis-selling of mortgage-backed securities.

RBS is the latest European bank that needs to reach a settlement with U.S. authorities. Credit Suisse (CSGN.S) earlier this month agreed to pay $5.3 billion and Deutsche Bank agreed to pay (DBKGn.DE) $7.2 billion to settle their respective mis-selling cases.

These settlements stem from an initiative launched in 2012 by former U.S. President Barack Obama to hold Wall Street accountable for misconduct in the sale of the securities that helped to trigger the worst economic crisis since the Great Depression.

Analysts said investors would welcome the first signs of clarity over the eventual size of RBS's settlement even as the final total remains unclear.

“RBS shares are up a touch today, perhaps as investors decide that things might not be as bad as feared,” Neil Wilson, senior market analyst at trading firm ETX Capital in London, said.

RBS shares were up 1.7 percent by 0850 GMT.

Analysts have estimated the bank could have to pay the U.S. Department of Justice as much as 9 billion pounds in the next few months. Even the lowest estimate of 2 billion pounds would make it the largest fine in the bank's history.

UBS said in a research report this week that RBS sold around 35 percent more volume of the toxic securities than Deutsche Bank, but also said there had so far been little correlation between the volume sold and the size of a final settlement.

RBS said the total misconduct bill for mis-selling these securities might exceed its provisions.

CEO McEwan has been trying to clean up RBS's balance sheet and end an array of legal cases so the government can sell its more than 70 percent stake in the bank after a 45.5 billion pound bailout during the financial crisis.

McEwan said the bank was unable to clawback any banker bonuses in relation to the U.S. mortgage securities because they were sold before the financial crisis and there were no laws in place at the time that would allow RBS to recoup any of the money

The British government has said that the uncertainty about the scale of the U.S. penalty is one of the reasons why it halted plans to sell any further shares in the bank.

RBS said in its statement it continued to cooperate with the Department of Justice, although it remained uncertain when a settlement might be reached.

By Andrew MacAskill and Lawrence White

 

Rolls-Royce Holdings Plc’s credit rating downgraded by Standard & Poor

Rolls Royce
Cedric Ramirez/flickr.com

(qlmbusinessnews.com via bloomberg.com – – Tue, 24 Jan, 2017) London, Uk – –

Standard & Poor’s downgraded Rolls-Royce Holdings Plc’s credit rating to three levels above junk after factoring in 670 million pounds ($836 million) in fines for bribery and corruption charges.

The aircraft engine-maker’s long-term investment rating has been downgraded to BBB+ from A-, S&P said in a statement Monday, cautioning that a new mandatory accounting system could weigh on reported revenue and profit. The ratings agency also said further investigations may follow the Jan. 16 fines.

The downgrade is the latest fallout after an agreement with U.S., U.K. and Brazilian regulators. Rolls was accused of paying bribes and using middlemen to secure contracts in countries including India, Indonesia and Nigeria. The company reported the incidents to the U.K.’s Serious Fraud Office in 2012.

Rolls-Royce shares fell as much as 3.4 percent Tuesday and were trading down 2 percent at 678 pence as of 9:13 a.m. in London.

Rolls-Royce said last week it expected earnings to be ahead of expectations for 2016. The company is due to report annual results Feb. 14.

The engine-maker in November detailed the initial impact on its books from a switch to a new accounting system that prevents Rolls from booking revenue for contracts far in advance. The impact on the company’s earnings is under review and has not been factored into the latest forecast, S&P said.
By Benjamin Katz

Theresa May to hold talks in Washington on Friday With Trump

Theresa May says she “won't be afraid” to tell Donald Trump if he says or does anything she feels is “unacceptable”. The two will hold talks in the White House on Friday on issues such as trade and security, with the prime minister being the first foreign leader to meet the US President since he took office. She told the BBC that the special relationship between the two countries enabled her to raise difficult matters. She insisted she had a “strong track record” of defending women's rights.

Executives and Entrepreneurs Best Efficient Travel Tips

It's important to know How To Be an Efficient Traveller because anyone who travels frequently, can tell you that a few extra minutes of planning or a few key accessories, can either enhance your travelling experience or become your worse travelling nightmare.

Patrick has travelled to several parts of the world and in this episode, he shares The Best Travel Tips for Executives and Entrepreneurs that he personally uses and have led him to have pleasant travelling experiences.

American Apparel purchased at Auction for approximately $88 million in cash

Canadian apparel maker Gildan Activewear has reportedly won a bankruptcy auction to buy U.S. fashion retailer American Apparel for approximately $88 million in cash. The purchase of the LA-based brand is now subject to approval from a bankruptcy court, which Gildan expects to be issued on Thursday. Under the deal, Gildan will acquire all intellectual property rights related to the American Apparel brand as well as manufacturing equipment – but the purchase does not include any of the brand's 110 retail stores. After the company's turnaround plan failed, American Apparel filed its second Chapter 11 in November, having amassed apporximately $177 million in debt. According to Raymond James analysts, the deal seems promising for the Canadian manufacturer, saying “With Gildan dominating in the basics category of the $4.5 billion print-wear market, the fashion and performance categories represent particularly attractive growth opportunities.”