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Kirin Holdings in Deal; Autoliv Buys Out Venture; U.S. Banks Feel Squeeze, Mittal on the Prowl; Bank of Canada Holds the Line
- Kirin Holdings Co. Ltd. (KNBWY) announced yesterday (Thursday) that it is in negotiations to buy Kyowa Hakko Kogyo Company Ltd. (KYKOF), a major Japanese pharmaceutical company. Kirin is hoping to expand its biotech and pharmaceutical divisions to make up for slowing sales in its flagship brewery operations. Kirin has been competing with rival Aashai Breweries for the largest share of the beer market, but sales are topping out.
- Autoliv Inc. (ALV), the Swedish automotive safety company, announced that it has , Autoliv Maw Hung Safety Systems, for almost $14 million. The company is based in Changchun in Northern China and produces safety equipment for the FAW-Volkswagen Jetta, the Audi A6 and the First Automotive Works. The joint venture, which operates one of Autoliv's nine manufacturing facilities in China, was created in 2002, but the business has since grown to 170 employees and is expected to reach $50 million in sales this year. Autoliv said it expects total 2007 sales in China to grow more than 40% to $260 million.
- Big U.S. banks continue to feel the pinch of the mortgage and credit crises. Bank of America Corp. (BAC) yesterday reported that third-quarter net income fell 32% from a year ago, as trading losses, write-downs on a wide variety of loans and soaring reserves for likely future loan losses undermined profit. Washington Mutual Inc. (WM) also showed a decline in earnings as a result of taking a loan-loss provision of $967 million. It also had a $147 million write down on bad mortgage loans, as well as $153 million in trading losses and a $104 million dollar loss on its mortgage-backed securities portfolio that is held for sale. Washington Mutual shares fell $2.55 each, or 7.71%, to close at $30.52, while Bank of America shares fell $1.18 each, or 2.36%, to close at $48.85.
- Steel billionaire L.N. Mittal is looking to expand his investments in India's crude oil refining industry, the Hindustan Times reported yesterday. Mittal has signed a memorandum of understanding with three state-run companies: Hindustan Petroleum Corp. Ltd., Gas Authority of India Ltd., Oil India Ltd., as well as French integrated oil company Total SA (TOT). Mittal is looking to build a 15 million ton per year refinery and a 1.1 million ton per year petrochemical complex. Total will be doing the feasibility study for the refinery while the state run Gas Authority of India will complete the study for the petrochemical plant.
- The Bank Of Canada give strong indications that it expects to hold interest rates steady through 2009, Reuters reported yesterday. The bank, which had raised rates as recently as July, pointed to weaker growth in the United States, a much stronger Canadian dollar and higher borrowing costs as potential forces to restrain growth in the nation. Bank Governor David Dodge commented that "things have happened since July obviously. We have a weaker U.S. forecast. We think the current policy rate is appropriate on the basis of that projection we have given you in this report."