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Siemens issued a surprise profit warning because of delays to projects and contract cancellations, which will drag down its quarterly earnings by $1.4 billion. The German engineering giant stressed that its problems had nothing to do with the present market turmoil. The news was a blow to Peter Löscher, Siemens' boss, who has begun a big cleanup at the company following a bribery scandal.
A federal appeals court threw out the conviction handed down last year to Joseph Nacchio and ordered a retrial. Nacchio was sentenced to a six-year prison term (though he remains free on bond) for insider trading while chief executive of Qwest Communications. The appeals court said the conviction was unsound because testimony had been barred from an expert witness deemed crucial to Nacchio's defense.
Responding to recent speculation, BNP Paribas, France's biggest bank, said it would not make a takeover bid for Société Générale, which in January unveiled a $7.2 billion loss that stemmed from a rogue-trading scandal.
CME Group made formal its agreement to buy the New York Mercantile Exchange for $9.4 billion. CME, created when the Chicago Mercantile Exchange and the Chicago Board of Trade combined last year, began negotiations with Nymex in January.
International Paper said it would buy Weyerhaeuser's packaging and recycling business in a deal valued at $6 billion. Because the offer is for assets and not stock, IP should reap a tax benefit worth around $1.4 billion, reducing the net purchase price accordingly. On either measure, it is one of the biggest deals in the timber-products industry in recent years.
Evraz, a Russian steelmaker that is part-owned by Roman Abramovich, agreed to buy the Canadian pipemaking business of Sweden's SSAB for $4 billion. Evraz then sold some of the division's assets to TMK, its compatriot. Demand is strong for steel piping in the North American oil and gas industry, but regulators will study the deal to see if there are any implications for energy security.
Air France-KLM cemented its offer to buy Alitalia, valuing the equity of Italy's loss-making state airline at just $217 million. The Italian government has been trying to offload the carrier for more than a year (several potential buyers pulled out of an auction last summer). It recommended Air France's offer, as did Alitalia's management. The airline's powerful unions, however, remain hostile, as are opposition politicians.
Political economy
China's prime minister, Wen Jiabao, said his government would take "forceful" steps to dampen inflation, which is running well above official targets. Soon after Wen spoke, China's reserve ratio was increased for the second time this year, with lenders ordered to place 15.5 percent of deposits with the central bank.
A British judge lifted a freeze on $12 billion of the assets of Venezuela's state oil company, quashing an order granted to ExxonMobil in January as part of its bid for compensation for the takeover of a heavy-oil project.
Angela Merkel became the first German chancellor to address Israel's parliament. She spoke of Germans' shame over the Holocaust and promised to be a true friend and partner of Israel. The German cabinet also held a joint session with the Israeli cabinet.
In Mexico, Alejandro Encinas, an ally of Andrés Manuel Lopez Obrador, the narrow loser of the last presidential election, won a ballot for the leadership of the left-wing Party of the Democratic Revolution, the main opposition. His victory means that his party is likely to adopt a more intransigent stance toward the government of Felipe Calderon.
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Blog: Patent Pending
Lights out at U energy conference. Irony police notified.
Just as Lawrence Kazmerski, a top official at the National Renewable Energy Laboratory, was about to give the keynote address at the University of Minnesota's annual E3 conference at the RiverCentre in St. Paul, the lights went out, bathing the audience in darkness and a deep sense of irony.
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