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South Africa's Naspers Nabs U.K.'s Tradus; Medtronic in China J.V; German Retailer Rings Up Strong Quarter; Deutsche Telekom Dials Hutchinson Whampoa For Venture
- Naspers Ltd. (NPSNY), the largest media company in Africa, is buying U.K-based Internet auction firm Tradus PLC (TRSPY) for $1.9 billion. It's the latest in a series of acquisitions of European Internet companies, as Naspers continues to diversify away from the slower-growing African marketplace. The bulk of South Africa-based Naspers' revenue, approximately 73%, is generated in Africa. The purchase of Tradus gives Naspers access to 11 European nations. Naspers officials said that the purchase would be funded through a combination of cash reserves and a $1.43 billion loan from Citigroup Inc. (C). The Tradus board of directors is expected to recommend approval of the Naspers offer to shareholders. Naspers, which publishes the largest daily paper in South Africa, as well as magazines and books, said this would be the first of its Internet companies to generate transaction income. The rest of its Internet companies depend on advertising revenue.
- U.S.-based medical device manufacturer, Medtronic Inc. (MDT), is purchasing $221 million worth of shares in Hong Kong-listed Shandong Weigao Group Medical Polymer Company Ltd. The investment gives Medtronic a 15% stake in Shandong Weigao. The two companies will also participate in a joint venture (51% Medtronic/49% Shandong Wiegao) focusing on products used to treat orthopedic problems and spinal-cord injuries. Medtronic will supply devices used to perform spinal-fusion surgery, while Shandong Weigao's artificial knees and hips will be distributed by the new venture. Medtronic President and Chief Executive Officer Bill Hawkins said that China is one of the keys to his company's global strategy and that the partnership with Wiegao made sense in light of its compatible product lines. Chen Xue Li, Weigao's chairman, said that he felt the partnership would give his company the chance to improve the diversity and quality of its medical products. The deal is subject to approval by Chinese regulators and the companies' respective shareholders.
- Germany-based retailer Arcandor (ACAGF) announced that its third-quarter profits had risen sharply. Although the company did not provide a net-earnings figure for the quarter, earnings before interest, taxes, depreciation and amortization (EBITDA) had risen to $1 billion (700.5 million euros), a dramatic bump from $104 million (72.8 million euros) in 2006, . Revenue was $7.71 billion (5.4 billion euros), up from $1.85 billion (1.3 billion euros in the third quarter of 2006, when revenue of the recently consolidated Thomas Cook Travel Services was included for the first time. Fueled by post-merger cost savings and a strong summer tourist season, revenue at Thomas Cook soared more then 600%, reaching $1.03 billion (723 million euros), up from $159 million (111 million euros) last year. The mail-order unit, Primondo, had a 15% year-over-year increase in revenue while the department store unit, Karstaft, showed a slight decline, with sales falling 3%. Chief Executive Thomas Middleton said that while he did not expect to pay a dividend for 2007, Arcandor was planning to institute a dividend for fiscal 2008.
- Deutsche Telekom AG's (DT) subsidiary T-Mobile and Hutchinson Whampoa Ltd. (HUWHF) announced that they would join their high-speed wireless networks in the United Kingdom, Bloomberg reported. The 50-50 joint venture will be called Mobile Broadband Network Ltd., and is expected to be able to provide blanket coverage capable of supporting high-speed 3G mobile broadband services. In addition, the two companies will be able to close more than 5,000 duplicate sites, resulting in significant cost savings for both. Cost savings for both are expected to be $4 billion (2 billion pounds) over the first 10 years of the agreement. Although the 3G high-speed networks are combined, each company will maintain its core network and be responsible for delivery of services to its respective customers. The agreement runs through 2031.