In its latest turnaround plan, General Motors made clear that its money-losing Swedish unit Saab would be independent within a year. Wasting no time, Saab said it would seek protection from creditors and restructure. Better to start with a clean slate.
Saab said it would seek funding from public and private sources through the reorganization, and that GM would provide liquidity.
On another front in the same war, talk of bank nationalization has been dragging down financial markets. Alan Greenspan is talking about it, giving even Republicans an excuse to support this most abhorrently socialist of measures. Even the dire and vague positions of Treasury Secretary Tim Geithner seem designed to ease Americans into accepting what would normally be unthinkable to a God-fearing capitalist.
Blame the Swedes. They nationalized their banking sector in 1992, with the cost estimated at 4 percent of gross domestic prodect. The $700 billion U.S. financial industry bailout amounts to 5 percent of GDP — and the Swedes bought a whole lot more meat than the offal-laden packages so far enacted by Congress.
If Americans can stomach the idea of socialized medicine — all ridicule of Canada, the United Kingdom and, well, most of the rest of the world aside — are they also willing to swallow the bitter pill of bank nationalization?
Other Deals News
* State oil monopoly Petrovietnam is in talks with a number of foreign oil companies including Royal Dutch Shell, India’s Essar and South Korea’s SK Energy to upgrade and sell part of the country’s first refinery.
* Spanish information technology group Indra is close to finalizing the acquisition of IT company Telvent, Expansion reported, citing unnamed sources close to the deal. Last month, press reports said private equity firms CVC and Cinven were also interested in Telvent, which is 64 percent owned by Spanish engineering firm Abengoa. A price tag of 1 billion euros had been set by Abengoa for its unit, the report said.
* Taiwan’s China Life will buy the bulk of British insurer Prudential Plc’s business in Taiwan, in the latest pullback by a foreign insurer from the island, the companies said. Prudential will get about 10 percent of China Life in exchange for the bulk of its PCA Life Assurance Co unit, said China Life, which would issue 145.5 million new shares and sell them to Prudential for T$15 per share, valuing the stake Prudential will get at T$2.18 billion ($64 million).
* Private equity firm CVC Capital Partners has hired UBS to sell the specialist care unit of Australian medical imaging company I-Med, banking sources said, in a deal that could fetch about A$200 million ($128 million).
* Philippine investment management firm Q-Tech Alliance will buy Kirin Holdings’ 19.9 percent stake in San Miguel Corp for 63 pesos ($1.30) per share, or a total of about 39.6 billion pesos, a company director said.
* Malaysian water company Puncak Niaga has turned down a bid by the Selangor state government to buy out its water assets, saying the offer lacked clarity. The state government last week offered $444 million to buy the water assets held by Puncak’s units to avert a water tariff hike allowed under its concession agreement from April 1.
* Shire, Britain’s third-biggest drugmaker, is to buy rights to two formulations of Belgian drugmaker UCB’s hyperactivity Equasym for 55 million euros ($69 million), the companies said.
* Nortel Networks, the Canadian phone equipment giant that filed for bankruptcy protection last month, said it agreed to sell parts of its application delivery portfolio to Radware Ltd, pending the results of a court-supervised auction.
* Australia’s Gloucester Coal has offered A$555 million ($358 million) for Whitehaven Coal in an all-share deal to combine the pair’s east Australian coal operations and strengthen their balance sheets.
* The German government gave a cool response to U.S. investor JC Flowers’ suggestion that Berlin pay nearly double Hypo Real Estate’s current share price to buy control of the struggling lender.