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	Thursday?October?26?2000
	 
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[IMAGE][IMAGE]	[IMAGE]	[IMAGE]	[IMAGE]	Business this week
				Oct 26th 2000
				From The Economist print edition  
				
				
				Sweet deals
				
				
				
				
				
				
				
				
				
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				General Electric, an American conglomerate, announced a friendly takeover of 
another American giant, Honeywell International, that will be worth $43 
billion. The merger heads off a bid by United Technologies, an aerospace and 
appliance firm that hoped to boost its business in aircraft engines. GE chief 
Jack Welch, who had been scheduled to retire next April, will stay until the 
end of 2001 to oversee the merging of the companies.
				See article: Jack Welch,s gambleE+
				
				Boosting its retail banking business in Europe, Deutsche Bank will buy the 
banking operations of France,s Banque Worms for an undisclosed sum. The 
French bank, now owned by an insurance behemoth, AXA, has roughly 15,000 
retail clients. AXA will retain a third of Worms,s assets, including 
divisions involved in trading securities. 
				See article: The next banking crisis, in America and Europe
				
				The fight between Repsol YPF, a Spanish energy concern, and Endesa, Spain,s 
leading electricity provider, for the second-biggest generator, Iberdrola, 
has ended in a government-sanctioned settlement. Endesa will buy Iberdrola on 
condition that both firms sell generating assets to Repsol. The Spanish 
government, once the owner of both Repsol and Endesa, maintains veto power 
over acquisitions by both companies.
				
				Cost cuts are coming to Xerox. The copier maker intends to lop $1 billion off 
its expenses next year in a battle against losses. Plans to sell assets worth 
between $2 billion and $4 billion, including all of its divisions in China, 
are also in the works. The extra cash will help to pay off Xerox,s recently 
incurred bank debts.
				
				The Barings name, trusted in investment banking for centuries before being 
tainted by speculative losses in the 1990s, is set to disappear altogether. 
Dutch parent ING, a financial-services group, announced the change as part of 
a strategy to promote its own brand worldwide. Barings is likely to be 
renamed ING Investment Banking Services.
				
				Hold the phone
				
				America,s telecoms giant, AT&T, will be split into four separate companies 
dealing, respectively, with broadband applications, wireless, consumer 
services and business services, in a bid to enhance shareholder value; AT&T,s 
shares had lost 54% this year. The new plan represents an about-turn after 
three years of buying small companies worth a total of $100 billion.
				See article: AT&T breaks itself up
				
				Italy,s auction of third-generation wireless licences netted only 26.8 
trillion lire ($11.6 billion), with the five bidders*Omnitel Pronto Italia, 
IPSE, Wind, Andala and Telecom Italia Mobile*each offering about the same 
bid. Following through on an earlier threat, investors in Blu, a consortium 
partially owned by BT, scuttled the firm,s attempt to garner a licence. 
Stakeholders are now trying to recoup their deposit of 4 trillion lire, which 
was frozen by the Italian government after Blu,s withdrawal.
				See article: Italy,s botched phone auctionE+
				
				Potentially anti-competitive activities at NTT, the Japanese telecoms 
monopoly, have attracted the attention of Japan,s Fair Trade Commission. The 
regulator is investigating whether NTT tampered with other companies, 
attempts to provide digital subscriber line (DSL) services. NTT,s control of 
local telephone lines allegedly allowed it to delay competitors, 
installations of DSL equipment.
				See article: Trustbusters probe NTTE+
				
				Financial regulators in America and Britain took steps to end companies, 
selective disclosure of information to favoured analysts and fund managers, 
rather than all investors at the same time.
				
				Euro furrow
				
				
				
				
				
				
				
				
				
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				The euro again plumbed new depths this week, touching 82.3 cents at one 
point. In the meantime, members of the European Parliament blasted the ruling 
council of the European Monetary Institute, the European Central Bank,s 
predecessor, for shelling out huge bonuses to ECB staff before the common 
currency,s introduction. The payments amounted to more than double what ECB 
rules supposedly allow.
				
				Six economic research institutes predicted lower growth for Germany and the 
euro zone than previously expected. They forecast that the German economy 
would grow by only 2.7% next year, revised downwards from their April guess 
of 2.8% and well below the International Monetary Fund,s estimate of 3.3%. 
Higher oil prices were partly responsible for the lower forecast.
				
				Japan has changed its accounting system for national income, with the 
probable result that GDP figures for 1997 and 1998 will be revised upwards 
substantially. Investment in information technology had been omitted from the 
totals until this year. Under the new system, Japan,s 1.9% contraction in 
1998 could magically shrink to only 0.7%.
				
				Changes afoot
				
				The chairman and CEO of Lucent Technologies, Richard McGinn, saw his tenure 
end unexpectedly early. Two weeks after declaring his intent to stay with the 
company, Mr McGinn was sacked by a hostile board. The move followed a 10% 
drop on last year in Lucent,s annual profits.
				See article: Troubled Lucent ditches its bossE+
				
				ABB, a leading engineering firm, has lost its chief executive. After 30 years 
with the company and four years in the top job, G"ran Lindahl stepped down in 
the wake of poor third-quarter figures, saying it was time to hand it over 
&to a younger leader with a true IT profile8. His successor will be J"rgen 
Centerman, head of ABB,s automation division.
				
				For the first time, investors will be able to buy future contracts for fine 
wines. Euronext, an umbrella group for commodity exchanges in Belgium, France 
and the Netherlands, will introduce futures for up to 141 Bordeaux vintages 
on Paris,s Matif market by early 2001. Italian wines are to be securitised in 
Milan six months later.
				
				
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