02/10/2024
BIZ & FINANCE WEDNESDAY | OCT 2, 2024
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Qatar Airways to buy 25% stake in Virgin Australia
Abu Dhabi’s Adnoc to acquire German chemicals company Covestro for €15.9 billion BERLIN: Abu Dhabi state oil giant Adnoc said yesterday that it has agreed to buy German chemicals producer Covestro for €15.9 billion (RM73.6 billion) including debt. The deal represents one of the biggest foreign takeovers by a Gulf state as Abu Dhabi and other countries in the region seek to reduce their economies’ heavy dependence on oil in the face of the global energy transition. It follows protracted negotiations between the two companies and will see Adnoc pay €62 per Covestro share, equal to €14.7 billion including about €3 billion in debt. Adnoc added it would also buy €1.17 billion worth of new shares in Covestro, a former Bayer unit, from a capital increase to improve funding of the takeover target. The takeover offer by the Abu Dhabi National Oil Company (Adnoc) had a “minimum acceptance rate of 50% plus one share”, Covestro said in a statement. Covestro, which is based in Leverkusen and has expertise in areas such as chemical recycling, has been a key target for Adnoc as it looks to diversify its operations. The deal remains subject to a set of “closing conditions, including merger control, foreign investment control and EU foreign subsidies clearances”, the statement said. The German group said it “welcomes and supports the bidder’s announced takeover offer” and would in all likelihood recommend shareholders accept the terms of the deal. Covestro, which makes plastics and chemicals for the automotive, construction and engineering sectors, was created in 2015 after being spun off from Bayer. Covestro reported a net loss of €72 million in the first six months of the year, compared with €46 million profit in the previous year. – Reuters, AFP PAKISTAN DELAYS BIDDING FOR NATIONAL AIRLINE TO OCT 31 ISLAMABAD: The bidding for Pakistan’s national airline has been delayed to Oct 31, a spokesman for the privatisation ministry said yesterday. A Pakistani parliamentary committee of privatisation had earlier been informed that Pakistan International Airlines would go under the hammer yesterday. The spokesman said the bidding will now take place on Oct 31 and the date has been approved by the ministry. Two officials at the ministry had earlier told Reuters that bidding was delayed because the bidders had wanted more time to evaluate terms and conditions for the auction. Six parties have been prequalified for the bidding – Fly Jinnah, Airblue Ltd, a consortium led by Pak Ethanol (Pvt) Ltd, a consortium led by YB Holdings (Pvt) Ltd, Arif Habib Corporation Ltd and Blue World City. – Reuters G7 URGED TO UNIFY CLOUD SECURITY STANDARDS WASHINGTON: A leading tech industry group yesterday called on Group of Seven (G7) nations to harmonise cloud security certification across the world’s richest nations, in an effort to stoke cooperation and counter calls that data should stay within national borders. Industry group BSA The Software Alliance, which represents tech giants including Microsoft and IBM, argues that its initiative would reduce compliance burdens for cloud service providers while maintaining robust security standards. “We encourage governments to look at where their cloud requirements are effectively the same, but using different language,” said Aaron Cooper, senior vice president of global policy at BSA. Greater unity among G7 nations could also“hopefully lead to a recognition that localisation doesn’t aid with security,“ he added. “But that’s not specifically what this proposal is about.”– AFP
The denial last year raised questions about the Australian government’s relationship with Qantas, which lobbied against more access for the Qatari carrier. Qantas has a partnership with Dubai-based Emirates, a rival of Qatar Airways. Qantas did not respond immediately to a request for comment. Qatar Airways CEO Badr Mohammed Al Meer in yesterday’s joint statement said his airline believed competition in aviation was “a good thing and it helps raise the bar, ultimately benefiting customers”. Australia’s Foreign Investment Review Board must approve the sale of the Virgin Australia stake to Qatar Airways, but the treasurer has the power after that to accept or reject the recommendation and impose conditions on the deal. “It wouldn’t be appropriate for me to pre empt that process or comment further,” Australian Treasurer Jim Chalmers told reporters after the deal was announced. “More broadly, we do want to see a strong, secure airline industry that delivers for consumers.” Qatar Airways also owns minority stakes in British Airways owner IAG, Hong Kong’s Cathay Pacific Airways and China Southern Airlines. – Reuters
o Deal will make Middle East carrier a cornerstone investor ahead of Australian airline’s anticipated IPO
SYDNEY: Qatar Airways will buy a 25% stake in Virgin Australia from US private equity firm Bain Capital, posing a tougher contest for Qantas Airways that has dominated Australian routes and pushed back against giving access to the Middle Eastern carrier. The purchase of the minority stake for an undisclosed amount will need to be signed off by Australia’s government, which denied Qatar Airways’ requests last year to fly additional services into Sydney, Melbourne, Brisbane and Perth. “This partnership brings the missing piece to Virgin Australia’s longer-term strategy,” Virgin Australia CEO Jayne Hrdlicka said in a statement. “It means that we’ve got an important shareholder who has a scale that we don’t have, who has the expertise that we don’t have, that can help us compete better domestically by giving us access to that scale,” Hrdlicka said later in an interview with ABC television yesterday.
The stake sale also serves as a cornerstone investment ahead of an anticipated return of Virgin Australia into public ownership, the companies said. Bain said last year it would explore an IPO of Virgin Australia, which it bought for A$3.5 billion (RM10 billion) including liabilities after it was placed in voluntary administration in 2020. Bain was targeting an A$1 billion listing, but the plans were delayed, Reuters reported last year. Bain declined to comment further on the IPO plans. As part of the deal with Qatar Airways, Virgin Australia plans to launch flights from Brisbane, Melbourne, Perth and Sydney to Doha with leased aircraft by mid-2025, subject to approval from Australia’s competition regulator. That would allow Qatar to gain more traffic to its Doha hub, regardless of whether the Australian government approves Qatar Airways’ push for more flying rights.
Clegg giving a press conference during the forum ‘Innovate Vietnam 2024’ at the Vietnam National Innovation Centre in Hanoi yesterday. – AFPPIC
BR I E F S
Meta to produce virtual reality headsets in Vietnam HANOI: Facebook parent Meta will produce its next-generation virtual and augmented reality headsets in Vietnam, creating more than 1,000 jobs, the company said yesterday. week the government said Elon Musk’s SpaceX plans to invest US$1.5 billion in the country. Vietnam’s top leader To Lam used a trip to New York last month to meet bosses from Apple, Meta and IT firm Supermicro.
device Quest 3S to Vietnam.” Meta did not respond to Reuters’ request for comment on the size of the investment and of its existing operation in Vietnam. It also did not clarify whether the manufacturing was done via suppliers. Meta has tens of millions of users in Vietnam Facebook social media platform. “Vietnam continues to be an important country for Meta. Millions of small businesses and consumers rely on our platforms,” Clegg said in the statement. Meta also said it would soon begin testing Meta AI in Vietnamese, having started its Business AI for Messenger testing in the country in June, with its full launch by the end of this year. Vietnam – long a low-cost destination to make clothes, shoes and furniture – is eyeing a rapid climb up the global supply chain and last
The announcement comes as Vietnam looks to boost its attractiveness as a destination for investment by the world’s biggest companies and a key part of the global supply chain. Speaking at a tech conference in Hanoi, Meta’s global affairs president Nick Clegg said the firm would focus on the production of the Quest 3S headset in the Southeast Asian country. “We will, with our local partners, be manufacturing them here in Vietnam, and we estimate that this will create well over 1,000 new jobs,” he said. In a separate statement, Clegg said, “Beginning 2025, Meta will expand manufacturing of its latest Mixed Reality
He also met President Joe Biden, a year after the US leader made a high-profile state visit to Vietnam to boost diplomatic and trade ties. Vietnam is particularly intent on developing its capabilities in the lucrative chip industry, with global supply chain shocks and fears about US reliance on China for key resources boosting investment there. Meta’s Facebook is widely used in Vietnam and Clegg said the nation was among the global leaders in using its Messenger platform “not just to send messages to family and friends, but actually communicate with businesses and so foster trade and commerce across the country”. – AFP, Reuters
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