Summit Notebook

Exclusive outtakes from industry leaders

China resource deals still hot

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Investment bankers have been saying that there are only two
things you need to know when it comes to Asia M&As — China and
resources.

Is this still the case after Rio Tinto walked away from
Chinalco’s $19 billion proposal earlier this year?

A noticeable rise has been seen over the last 12 to 18 months
in China-related mergers and acquisitions, particularly Chinese
firms moving on overseas targets, Philip Partnow, a senior banker
with UBS Securities, said at the Reuters China Investment Summit.

“My personal view is it’s a very interesting and exciting
area,” said Partnow, deputy head of UBS’s investment banking
department in China. “There’s a lot of activity.”

Japan eyes UK takeover rules

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Japan’s takeover rules are destined to be shaken up — but probably not for some time.

The government wants to adopt Britain’s takeover rules rather than base policy on the U.S. model.

How to gum up an exchange merger: salt water

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It’s a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It’s a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler – inventor of the K-car and the minivan – and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company’s takeover by the penny pinching Belgians and Brazilians at InBev.

Gary Katz, CEO of Deutsche Boerse unit International Securities Exchange, insisted during his appearance at the Reuters Exchanges and Trading Summit that all has been sweetness and light since the Germans assumed control of the upstart American options exchange and that there has been “nearly zero turnover” since the takeover.

AUDIO – Deal making is back! (Um, maybe…)

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There might not be the enthusiasm of a couple of years ago, but some deals in the defense sector might actually get done, according to Thomas Captain, head of Deloitte‘s aerospace and defense group.

Speaking at the annual Reuters Aerospace and Defense Summit in Washington, Captain said there were three possibbilities for deals that he sees in the near future.

AUDIO – Finding value in tough times

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Executives at this year’s Reuters Aerospace and Defense Summit almost uniformely said that finding critical, and rather immediate, value in mergers and acquisitions was especially important now in a climate of less money available for financing.

But opportunities do exist and can be found after careful hunting, said Alex Dorrian (heard first in this clip), CEO of Thales UK and executive vice president of International Operations for Thales Group worldwide, and Allan Cameron, chairman and CEO of Thales North America.

Pharma mega mergers? Just a sugar rush

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- Big pharma mega mergers are no way to escape looming loss of exclusivity on key drugs and pressure on prices. In fact, they’re the last refuge of CEOs running out of ideas, reckons Bayer HealthCare’s chief Arthur Higgins.   “I think the tendency is, when you’re short of ideas, to go for a quick fix. It’s a little like myself and a sugar rush. I feel good for about 10 minutes, then I wish I’d never taken the sugar,” Higgins told the Reuters Health Summit. “I can’t see any logic in combining two poorly performing businesses when at the heart what keeps it sustainable is innovation. And there’s no relationship between scale and innovation.“   What’s more, the financial crisis threatens a long-held adage about the drug industry — its defensive status in a downturn — and while prices for acquisition targets may be plummeting, that does not necessarily mean the deal adds up to value.   “Traditionally healthcare has been somewhat cushioned in these economic times, but nobody knows the future any more. We all listen to the television, we all meet with experts, but this is completely outside people’s experience,” Higgins said. “I don’t think any company at the moment is looking at major acquisitions. I think we’re all going to take a pause and step back and look at the economic outlook in 2009.”  

Silicon Valley execs self-absorbed (and thats not all bad)

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With the white noise of MicroHoo ringing in everyone ears, we asked Adobe SystemsShantanu Narayen, president and chief executive officer of Adobe Systems Inc., speaks during the Reuters Global Technology, Media and Telecom Summit in New York CEO Shantanu Narayen why he thinks “royal weddings” — idylic mergers between multi-billion dollar companies — in Silicon Valley are few and far between.

You know, because, giant Deathstars are better for everybody, right?

The answer: Even though some merger adviser is probably ringing to talk about “strategic alternatives” (we suppose), Silicon Valley entrepreneur-types are, like, you know, obsessed with minding their own beeswax.

Grand Theft Audio 4 seen as “work of art”, EA says

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florin.jpgThe spectacular debut this month of Take Two’s blockbuster video game Grand Theft Auto was no better than expected, EA’s head of international publishing, Gerhard Florin, told the Reuters Technology, Media and Telecoms summit in Paris.

EA on Monday extended its public offer for Take Two by a month after failing to win more shareholder support for its $2 billion hostile bid but did not up the price. Florin said he was surprised there had not been a more negative approach to the violent game, which instead was hailed as a work of art, even in Germany, which tends to shun violent video games.

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