Business review from the Economist
Deal forms world's biggest cigarette firm
Having sweetened its offer, British American Tobacco secured a deal to gain full control of ReyÂnolds for $49 billion, creating the world's biggest listed cigarette company. Reynolds is based in the U.S. market, which is again looking alluring after years of costly litigation and falling demand. The volume of cigarettes sold in the U.S. has fallen sharply in the past decade, but overall retail sales in the industry have risen thanks to population growth and new products, such as e-cigarettes.
Eyewear maker Luxottica agreed to merge with Essilor, a French company that produces lenses. The $49 billion transaction is one of the biggest cross-border deals in the E.U. to date. The merger had long been resisted by Luxottica's founder, Leonardo Del Vecchio, who built his Italian firm up into a global behemoth that owns the Oakley and Ray-Ban brands and supplies frames for Chanel, Prada and others.
Rolls-Royce settled claims dating from 1989 to 2013 that it had bribed officials in various countries in order to win contracts, in a vindication of the strategy pursued by Britain's Serious Fraud Office. The engineering company will pay penalties totaling $809 million to regulators in the United States, Brazil and Britain. Most of that goes to the SFO, which pushed for a deferred prosecution agreement, still a novel concept under British law.
Fiat Chrysler Automobiles' share price was left bruised by an allegation from the U.S. Environmental Protection Agency that it had used software in 104,000 diesel cars to let them exceed legal limits on nitrogen-oxide emissions. The EPA did not go as far as to say that FCA had cheated in emissions tests; that transgression has cost Volkswagen billions in fines. FCA strongly denied the claim; its boss, Sergio Marchionne, said, "We don't belong to a class of criminals."
Consumer prices in Britain rose by 1.6 percent in December, a big bounce from 1.2 percent in November and the highest figure for two years. Costlier transport contributed to the spike. Rising inflation is an unwelcome conundrum for the Bank of England.
A court in South Korea rejected prosecutors' request to arrest Lee Jae-yong, the vice chairman of Samsung Electronics, on allegations of bribery related to an influence-peddling scandal. Prosecutors allege that money paid by Lee to a friend of South Korea's president was intended as a bribe to help win a merger of two Samsung affiliates. Lee, known professionally as Jay Y. Lee, denies the charge.
The Federal Trade Commission lodged an antitrust lawsuit against Qualcomm, accusing it of abusing its commanding position in the semiconductor market to impose stringent licensing terms on patents for chips in mobile phones.
Another profit warning from Pearson caused its share price to plunge by 30 percent. The academic publisher is facing a decline in demand for its textbooks in America, partly because of the rise of services that let students rent the books.
SpaceX sent its first rocket into orbit since an explosion on a launchpad last September grounded its fleet. The government has accepted the company's report on the accident, allowing it to start clearing its backlog of launches.
Global politics from the Economist
May lays out timing for Brexit
In her most important speech yet on the issue, Britain's prime minister, Theresa May, set out a position for quitting the E.U. that includes leaving the single market and customs union. May said she would seek the best possible trade terms with Europe and be a "good neighbor," but that no deal would be better than a bad deal for Britain. Donald Trump held out the promise of a U.S. trade agreement after praising Britain's Brexit choice.
Germany's chancellor, Angela Merkel, responded to May's speech with vows to hold the E.U. together and block any British "cherry-picking" in the negotiations. Jean-Claude Juncker, the president of the European Commission, promised to work for a fair deal for both sides.
Northern Ireland's Assembly collapsed amid a scandal involving the first minister's handling of a renewable-heating program that could cost taxpayers $600 million. Elections for a new Assembly on March 2 might come to be used as a proxy poll on Brexit: the province voted to remain in the E.U.
An avalanche hit a hotel in the Abruzzo region of central Italy. Around 30 people were inside. The avalanche was apparently triggered by one of three earthquakes that struck the region this week. Rescue attempts are continuing.
Hun Sen, the prime minister of Cambodia, launched a lawsuit against Sam Rainsy, an exiled opposition leader, for defamation. Rainsy claims that Hun Sen is trying to destroy his party to prevent it winning elections scheduled for next year.
