Global briefs from the Economist

  • Updated: September 9, 2013 - 5:30 PM
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Samsung’s new smartwatch

Global business

It was a big week for the mobile-phone industry, with the announcement of two long-mooted deals. In the first, and after years of talks, Verizon agreed to buy the 45 percent stake held by Vodafone in Verizon Wireless, the pair’s joint venture in America, for $130 billion.

In the second big deal of the week, Microsoft beefed up its business in mobile devices and services by agreeing to pay $5 billion for Nokia’s handset division, which makes smartphones based on Windows. Nokia had tried various turnaround plans to tackle its shriveling market share. It still will exist, focusing on networks and mapping, but 32,000 of its staff now work for Microsoft, including Stephen Elop, who was its chief executive. He is now a candidate to replace Steve Ballmer when he steps down as Microsoft’s boss.

Samsung unveiled its first smartwatch, the Galaxy Gear, beating Apple in bringing the first significant wearable device to market. The watch will cost $300 and can link only to Galaxy phones and tablets; other new smartwatches will work with lots of Android products. It is still unclear how much demand there is from consumers for the gadgets.

LinkedIn said it would issue new stock in a secondary offering, through which it should raise $1 billion. The social network for professionals has seen its share price rise by 200 percent since its IPO in 2011.

Standard & Poor’s raised the ante in its legal fight with the U.S. government when it asserted that it is being sued in “retaliation” for exercising its right to “free speech” in downgrading America’s AAA credit rating. S&P made the claim in court papers it filed defending itself against the lawsuit, which alleges that S&P gave sound ratings to bad mortgage products to keep its clients in the banking industry happy.

Bank of America decided to sell its remaining 1 percent stake in China Construction Bank, which should fetch around $1.5 billion. Many big U.S. banks bought stakes in Chinese state banks several years ago, and have been cashing in their lucrative holdings.

Ryanair’s share price fell sharply after it issued a surprise profit warning amid a price-cutting war among Europe’s budget airlines. The carrier said sales were weak during the summer and bookings are down for this autumn.

Yankee Candle, which is based in Massachusetts, was bought by Jarden, a consumer-products company that owns a wide range of brands, in a $1.8 billion deal. The candle firm started in 1969 when its teenage founder made a Christmas gift for his mother. According to its “Learning Scentre,” it now produces 200 million aromatic candles a year and is expanding in Europe.

Political economy

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