Business Review from the Economist
Verizon buys Yahoo's internet business
After a monthslong bidding process, Yahoo announced it will sell its core business to Verizon. Last year, the wireless carrier paid $4.4 billion for AOL, another former internet darling. Merging AOL and Yahoo will give Verizon more eyeballs to sell to digital advertisers. The deal will surely bring the curtain down on Marissa Mayer's tenure at Yahoo, which is widely regarded as a failure.
Sales of Apple's iPhone continued to fall. The world's largest listed company said it sold some 40 million smartphones between April and June, around 15 percent fewer than during the same period last year. It also forecast sales would drop again in the coming quarter. The phones are responsible for about half of Apple's sales. Its quarterly profit fell to $7.8 billion, down by 27 percent on the year before. Sales in China, which produces cheap competitors to the iPhone, were particularly hard-hit.
Ryanair became the latest European airline to warn of troubles ahead. The continent's largest low-cost carrier followed easyJet, Air France-KLM and Lufthansa in suggesting that business may be hit this year. European airlines have faced a litany of woes, including air traffic control strikes in France, terrorist atrocities in Belgium, France and Egypt, and an attempted coup in Turkey. Consumer confidence may also be damaged by Brexit and the subsequent fall of the pound.
AB InBev raised its offer for SABMiller, a rival based in Britain. The two firms struck a deal in November but the pound's fall after the Brexit referendum prompted AB InBev to revise its offer from £44 (now $58) to £45 a share. The merged company will have nearly one-third of the world's beer market.
It was a bad week for Goldman Sachs. The firm was sued for $510 million by a big shareholder of EON Capital, a Malaysian bank that Goldman once advised. Primus Pacific Partners accused Goldman of a conflict of interests because it concealed its links with 1MDB, Malaysia's sovereign-wealth fund, which was launched by Najib Razak, the prime minister. Goldman also advised on the takeover of EON by Hong Leong Bank, which had ties to Razak. Primus says Goldman undervalued EON as a result, an allegation it denies.
BP's half-yearly profit fell by 44 percent to $720 million, compared with the same period last year. It blamed the low oil price. Brent neared $44 a barrel this week; it was over $50 in May. BP reckons the current glut of oil could last for 18 months. The firm said it hoped it had now drawn a line under the Deepwater Horizon disaster of 2010, which has cost it some $62 billion. Shell also announced poor quarterly results, down 72 percent on the year before.
Deutsche Bank profits dropped by 98 percent to $22 million in the second quarter, compared with the same period last year. It suggested that cost-cutting, which has already led to 9,000 job losses, may now have to go even deeper. Deutsche is also trying to come to a settlement with American regulators over its alleged mis-selling of mortgage-backed securities.
Global Politics from the Economist
Brazil arrests 12 terror suspects before Rio
Brazilian police arrested a dozen people who were planning terrorist attacks during the Rio Olympics, which start Friday. The suspects had been inspired by Islamic State in Iraq and the Levant (ISIL). Brazil's justice minister, Alexandre Moraes, said they were "absolutely amateur" and "unprepared."
Hundreds of Venezuelans marched to demand that the country's electoral commission rule on whether a referendum to recall the president, Nicolas Maduro, can proceed.
Two men inspired by ISIL slit the throat of Father Jacques Hamel, an 85-year-old priest, during a church service in Saint-Etienne-du-Rouvray, a suburb of Rouen in northern France. The assailants were shot dead by police.
Michel Barnier, a former foreign minister of France and vice president of the European Commission, has been appointed to lead the E.U.'s Brexit negotiations with Britain. Barnier is seen as a tough adversary for Britain.
Theresa May, Britain's new prime minister, continued her Brexit charm offensive, meeting the leaders of Northern Ireland's devolved government to reassure them that a "hard" border would not be reimposed between Britain and Ireland. She also met for talks in London with Enda Kenny, Ireland's prime minister, and Italy's premier Matteo Renzi in Rome.
Salva Kiir, the president of South Sudan, has replaced his vice president, Riek Machar, the leader of the main opposition, threatening a fragile peace deal between the two sides.