Lufthansa to Buy 19% Stake in JetBlue; Northern Rock Announces New CEO; Kuwait Chips in $9.5 Billion for JV with Dow Chemical; Ford Goes Global with Inside Man
In a deal that represents the first substantial European-based airline investment in a domestic U.S. airline, JetBlue Airways Corp. (JBLU) announced that German-based Deutsche Lufthansa AG (DLAKY) plans to purchase $300 million in newly issued common stock at $7.27 per share. The purchase will give Lufthansa a 19% stake in the company and a seat on JetBlue's board. "We are very pleased to become an investor in JetBlue," Lufthansa Group Chairman and Chief Executive Officer Wolfgang Mayrhuber said in a statement. "Our investment reflects the confidence we have in JetBlue's quality, growth potential and management team. This investment presents Lufthansa with a compelling opportunity to invest in the U.S. point-to-point carrier market as the industry continues to evolve. The transaction links two airlines with international reputations for quality, innovation and a service culture."
U.K.-based Northern Rock PLC (NRK) announced Andy Kuipers as the firm's new CEO yesterday (Thursday). Kuipers, 49, replaces Adam Applegarth. Former CEO Applegarth had a 24-year tenure with Northern Rock, one of the top five lenders in the United Kingdom with more than 100 billion pounds ($204 billion) in assets. The management change comes as Northern Rock faces 150 million pounds ($306 million) in write-downs related to structured investment vehicles (SIVs) and another potential 131 million pounds ($267 million) in write-offs tied to collateralized debt obligations (CDOs). Kuipers has been with Northern Rock since 1987. Prior to this new appointment, he was responsible for the co-ordination and direction of the company's sales, marketing, products, pricing and retention activities, Northern Rock said in a statement.
Kuwait's state-owned Petrochemical Industries Co. agreed to buy a 50% stake in the commodity-plastics unit of Dow Chemical Co. (DOW) for $9.5 billion. The joint-venture deal is expected to close in late 2008, and when it does, it will be the oil-rich nation's largest international investment. The JV will be headquartered in the United States, and will manufacture and market polyethylene, ethyleneamines, ethanolamines, polypropylene, and polycarbonate, Dow said in a statement. More practically, the JV is expected to generate more than $11 billion in revenue. It currently employs 5,000. Dow's shares surged $2.64 a share, or 6.32%, on the news.
In an effort to speed its globalization efforts, Ford Motor Co. (F) has promoted its North American manufacturing chief to a new position in charge of the company's globalization effort. Ford announced yesterday (Thursday) that Joe Hinrichs, 40, would take over as group vice president of global manufacturing on Jan. 1. From that position he will spearhead the integration of Ford's worldwide manufacturing operations. "In his new role, Joe will focus on delivering a global manufacturing plan that allows us to improve our efficiency while leveraging our scale worldwide," Ford's Chief Executive Officer Alan Mulally said in a statement. Industry analysts have criticized Ford as being too far behind in its globalization efforts, but the company now has executives in charge of both global marketing and worldwide product development, which hopefully will signal a tightened global focus for the U.S. automaker.