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The Morning Ledger: Renault to Propose Merger With Nissan to Reset Alliance
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A worker on an assembly line of the Nissan Micra at a Renault factory in Flins, near Paris. PHOTO: BENOIT TESSIER/REUTERS
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Good morning. The departure of a leading executive can upend carefully crafted alliances between companies, as the case of Renault SA and Nissan Motor Co. illustrates. The French car maker now plans to propose to its Japanese partner that the firms merge under a new holding company to reset the alliance built by former Chairman Carlos Ghosn, reports the Wall Street Journal.
Under the proposal, Nissan shareholders and Renault shareholders would each receive a roughly 50% stake in the new company. Nissan has yet to hear details of the proposal, people familiar with the proposal said. “It’s clear that the alliance is not functioning properly,” said one of the people.
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The proposal is only one option under discussion, according to a person close to Renault. “There are negotiations saying either we need to change the capital structure, or have better management integration, or ensure better complementarity on projects,” the person said. “We can’t stay as we are.”
In proposing the holding-company structure now, Renault is moving faster than it originally planned. The accelerated timeline is a result of Renault’s concerns about Nissan’s deteriorating business results. Earlier this week, Nissan issued its second profit warning of the year, lowering its operating profit projection by roughly 30%.
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Predictive Analytics Give a Boost to Diageo’s Cost-Savings Efforts
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The maker of Johnnie Walker whisky and Tanqueray gin wants to improve productivity by better forecasting customer demand, creditor payments and commodity prices, Chief Financial Officer Kathryn Mikells said in an interview with CFO Journal. To achieve this, the company has turned to a suite of tools known as predictive analytics that gather and crunch large amounts of data to identify trends and forecast events.
Predictive analytics “really give us more bang for the buck” and enables the London-based company to spend its capital more wisely, Ms. Mikells said.
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The U.S. Commerce Department is scheduled to release its initial first-quarter estimate of the nation’s gross domestic product at 8:30 a.m. ET. Economists surveyed by The Wall Street Journal estimate GDP grew at a 2.5% annual rate in the quarter. Here’s what to watch in the report.
Chevron Corp. and Colgate-Palmolive Co. are among the companies scheduled to report earnings today.
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Uber calibrated downward its target valuation to a range of roughly $80 billion to $90 billion as it readies an initial public offering. PHOTO: KEVIN HAGEN FOR THE WALL STREET JOURNAL
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Uber Technologies Inc. ratcheted down its target valuation to a range of about $80 billion to $90 billion for its initial public offering, according to people familiar with the matter.
Apple Inc.’s close-knit industrial design team is undergoing its most pronounced turnover in decades, marking a changing of the guard for the famed group that has defined the tech giant’s aesthetic and spearheaded the development of products including the iPhone.
Chinese tech giant Huawei Technologies Co. laid out details of its ownership structure in an attempt to rebut critics who have cast doubt on the company’s claim that it is owned and run by its employees.
Bunge Ltd. appointed longtime agribusiness executive Gregory Heckman chief executive as the grain giant revamps its business amid turbulent agricultural markets.
Digital First Media, the hedge fund-backed media company pushing Gannett Co. to sell itself, cut the number of seats it is seeking on Gannett’s board in half.
German auto parts maker Continental AG will push back the spin-off of its powertrain division until next year, marking the second time a high-profile listing has been delayed in Germany this year, Reuters reports.
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$1 Trillion
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The market cap Microsoft Corp. reached during intraday trading on Thursday, becoming the third U.S. company to do so after Apple Inc. and Amazon.com Inc.
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Shortage of Biotech CFOs Prompts Broader Search Criteria
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Competition for biotechnology chief financial officers has increased as the ranks of midsize companies in the sector have grown, according to a report from executive recruiter Russell Reynolds Associates. That is causing companies to look beyond the finance function for a new CFO.
The number of U.S. publicly traded biotech companies valued between $500 million and $10 billion ballooned to 116 in 2018 from 24 in 2008, according to the report.
Companies’ preference for CFO candidates who have industry experience is part of the dilemma, says Rose Mistri-Somers, a co-author of the report and a member of the financial officers practice at Russell Reynolds. The average biotech CFO has about 15.4 years of health-care sector experience, compared with 1.1 years of industry experience among non-biotech CFOs, the report said.
In the absence of a large pool of candidates with experience at the helm of a biotech firm, the sector is increasingly looking to sector-focused investment bankers, fund managers, Wall Street analysts and senior finance leaders from larger pharmaceutical companies to serve as finance chiefs—many of whom have a background in biology, chemistry, medicine or another field of science, according to the study.
—Tatyana Shumsky
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3M Co. said it would cut 2,000 jobs and restructure its sprawling business as it made fewer sales to car makers in China and electronics companies in Japan amid a broad slowdown in its business.
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Amazon.com Inc.’s profit more than doubled as it tamed costs, but its quarterly revenue grew at the slowest pace in four years.
Intel Corp. trimmed its financial forecast for the year and said quarterly sales of chips for data centers declined for the first time in seven years.
Starbucks Corp. beat profit expectations in the latest quarter and boosted forecasts for sales growth this year.
Ford Motor Co.’s first-quarter operating profit rose 12%, as the auto maker shored up overseas losses and notched gains in the U.S.
Mattel Inc.’s sales fell 3% in the first quarter as slumps at Fisher-Price, American Girl and other brands continued to offset gains by Barbie and Hot Wheels toys.
Southwest Airlines Co., the biggest customer for Boeing Co.’s 737 MAX, said the grounding of the plane after two fatal crashes has cut into its growth plans and driven up costs.
Deutsche Bank AG cut its full-year revenue target to “essentially flat” from 2018 in quarterly results.
Royal Bank of Scotland PLC recorded a drop in profits for the first three months of the year, reports the BBC.
T-Mobile US Inc.’s first-quarter profit jumped 35% on the strength of new customer sign-ups.
Daimler AG reported a 37% drop in first-quarter earnings in its core car division, citing weak sales in China.
Total SA said its net profit for the first three months of the year fell 4% to $2.8 billion, Reuters reports.
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The feud between Tesla CEO Elon Musk, center, and the SEC stems from an SEC investigation in 2018 that alleged Mr. Musk misled investors. PHOTO: JUSTIN LANE/EPA/SHUTTERSTOCK
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Elon Musk and the U.S. Securities and Exchange Commission want more time to work out their dispute over whether the Tesla Inc. chief executive violated a court order restricting his use of social media.
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California’s attorney general said Morgan Stanley has agreed to pay $150 million to settle allegations the company misled investors, including pension funds serving the state’s teachers and public employees.
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Amgen Inc. and Astellas Pharma Inc.’s U.S. unit have agreed to pay a total of $125 million to resolve kickback allegations that they violated federal law by using charities to pay for Medicare patients’ out-of-pocket costs for the companies’ own drugs, federal prosecutors said.
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Canada’s main privacy watchdog said a year-long probe found Facebook Inc. broke the country’s privacy laws and failed to protect Canadians’ personal information, and will go to court to force the social-media company to fix the deficiencies it uncovered.
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The U.S. Federal Reserve has ordered the New York branch of Japanese lender Sumitomo Mitsui Banking Corp. to bolster its compliance with anti-money-laundering and sanctions laws.
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Chinese President Xi Jinping speaks at the opening ceremony for the Belt and Road forum in Beijing on Friday. PHOTO: FLORENCE LO/REUTERS
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China’s President Xi Jinping signaled a recalibration of his global infrastructure-building program as he sought to assuage foreign critics who blame Beijing for pushing excessive lending onto developing economies.
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African swine fever has swept across China’s pig farms, spreading more quickly than authorities had expected and devastating the country’s pork industry.
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The share of recent U.S. high-school graduates who enrolled in college rebounded last year, showing the strongest labor market in decades has yet to entice young Americans away from pursuing more education.
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The U.S. homeownership rate fell for the first time in more than two years in the first quarter, putting the brakes on the recovery of an important piece of the economy.
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Saudi Arabia’s sovereign-wealth fund is planning to tap the debt market for billions of dollars it needs for investments to help deliver Crown Prince Mohammed bin Salman’s ambitious economic overhaul.
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Every weekend we select a handful of in-depth articles we think are worth a bit of your time, either because they peel back the layers on a compelling business story, or somehow make us look at business in a different light.
Salad chain Sweetgreen in 2016 announced it would accept only credit and debit cards, placing itself at the forefront of the cashless revolution. But this week, the company reversed tack, citing unintended consequences, reports The New York Times.
The rate of H1-B visa rejections has spiked under the Trump administration, with technology outsourcing firms taking the brunch of the policy shift. The denials are devastating for foreign workers, many of whom have been living and working in the U.S. for years, Wired magazine reports.
Preparing for a marathon with a busy work schedule can be a challenging exercise, as business trips and long office hours often conflict with training plans. A Financial Times columnist turns to artificial intelligence to get her training back on track.
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