Dec 12, 2013 10:03 UTC

Microsoft lucky to avoid Nokia’s India tax bill

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Microsoft is lucky to dodge Nokia’s tax bill in India. On Dec. 12, the Delhi High Court allowed the Finnish group to transfer its Chennai factory to the U.S. software giant as part of its planned $7.4 billion sale of its mobile handset business. While the overall deal wasn’t in doubt, Microsoft avoids Nokia’s hard-to-assess tax liability. If only Vodafone had been so fortunate.

Dec 10, 2013 20:34 UTC

Time Warner Cable could play a little Pac-Man

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By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Time Warner Cable could play a little Pac-Man. Being acquired by smaller rival Charter Communications, a plan that has been doing the rounds, would create a highly indebted cable giant with an enterprise value of over $100 billion.

Dec 6, 2013 02:12 UTC

Benefits of being “G-SIFI” seem to outweigh costs

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

The benefits of being labeled “too big to fail” may just outweigh the costs. Since regulators first published their list of global systemically important financial institutions, or G-SIFIs, the banks concerned have boosted capital and tamped down balance sheets. But smaller lenders, particularly in Europe, have done the same without joining the club. And shareholders seem not to notice much of a difference.

Nov 29, 2013 05:37 UTC

Australia too mealy-mouthed on protectionism

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Australia is being mealy mouthed about protectionism. Treasurer Joe Hockey blocked the A$3.4 billion ($3.1 billion) takeover of agricultural trader GrainCorp by U.S. rival ADM on Nov. 29, on the grounds that Australia’s grain market is only just getting used to competition, five years after the national wheat monopoly was disbanded. For Australia’s foreign investment prospects, the decision itself is less bad than the ambiguity over why it was made.

Nov 28, 2013 08:08 UTC

Giant Interactive’s $2.9 bln buyout hard to resist

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Giant Interactive’s $2.9 billion buyout is hard to resist. Chairman Shi Yuzhu is leading a consortium with Baring Private Equity Asia to take the U.S-listed Chinese computer gaming group private. At almost 13 times this year’s earnings, the group’s offer to buy the 53 percent that it doesn’t already own is a chunky premium to peers. Besides, independent investors have few alternatives.

Nov 26, 2013 20:33 UTC

Turning suit deal inside out reveals silver lining

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By Jeffrey Goldfarb
Thea author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Turning a suit deal inside out has revealed a silver lining. After fending off a hostile bid from Jos. A. Bank, Men’s Wearhouse is now proposing to buy its smaller rival for $1.2 billion. The estimated cost savings could cover nearly the entire purchase price and the combined company would be less indebted. Structured this way round, the transaction is financially more fashionable.

Nov 26, 2013 17:45 UTC

U.S. trustbusting would make a great monopoly

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By Reynolds Holding
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

America’s two federal trustbusting agencies would make a great monopoly. The U.S. Justice Department is beating the pants off its rival, the Federal Trade Commission, with pushback on headline-grabbing deals. The FTC has meanwhile scored big points protecting consumers. Leaving antitrust to DoJ would reduce costs and make both agencies more effective.

Nov 25, 2013 20:43 UTC

Chrysler IPO delay edges Fiat into driver’s seat

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By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Fiat may have slipped into the driver’s seat. An autoworkers fund that owns 41.5 percent of Chrysler has been pushing for an initial public offering of the company as part of talks with its Italian partner. Chrysler’s board has now decided to delay the stock sale until next year, suggesting Fiat’s negotiating position has improved.

Nov 19, 2013 08:09 UTC

Aussie dairy battle needs cheap debt to stack up

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By Ethan Bilby

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Australia’s dairy battle needs cheap debt to stack up. Three bids in as many days for Australia’s Warrnambool have lifted the price tag above A$500 million ($469 million). Local cost savings and projections of China’s thirst for foreign milk help justify the frenzy. But the investment case rests on low borrowing costs.

Nov 14, 2013 18:41 UTC

Snapchat bid triples Facebook’s desperation

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Facebook’s Snapchat bid shows triple the desperation. The social network shelled out $1 billion for no-revenue Instagram a little over a year ago. Now it’s said to be dangling as much as $3 billion to lure in a mobile app that sends self-destructing digital images. Facebook’s apparently escalating need to buy off marauders at its moat suggests its defenses may be scalable.

COMMENT

It is an indication that the technology-bubble is alive and well. Eliminating competition has always been a basic premise of market economics so the business practices of Facebook are not so much a behavioral anomaly but almost an industry-standard. Even overpaying for a business property that enhances monopoly power is a practice that has made Google, Microsoft and Cisco Systems very successful in the technology sector, and all three have had tremendous corporate success doing it. So (as the author notes), it remains to be seen how this will work out for Facebook in the long term. But the operating margins in gaining and maintaining technology monopolies may be so high, that there is plenty of room for error so that what seems now to be outright desperation in controlling competitive technology threats may turn out to be prescient foresight.

And who would have thought…?

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