Welcome to ESL Business News for April 30, 2007. ESL Business News gives you a podcast and script of international business news every week in slow, clear English. Find us on the web at eslbusinessnews.com, where you can follow along with the podcast script as you listen.
British bank Barclays announced an agreement to buy ABN AMRO, the largest bank in the Netherlands, for €67 billion. The Royal Bank of Scotland and two other banks have announced joint plans to prevent the deal and make their own hostile takeover of ABN for €72 billion. While the Barclays deal would give ABN shareholders 3.225 shares in the newly merged company for each existing ABN share, the RBS deal would give them cash. As part of the Barclays deal, ABN plans on selling their United States division The LaSalle Bank to the Bank of America for $21 billion, but because of RBS's interest in LaSalle, Dutch shareholder group VEB has gone to court to try to prevent the sale of LaSalle to the Bank of America.
For the first quarter of 2007, Toyota sold 2.35 million cars, more than any other auto maker in the world. U.S. company General Motors had held the title of world's top auto seller since 1931, not counting two brief periods in the 1970s and 1980s when labor troubles led to production problems. GM sold 2.26 million cars worldwide in the first quarter of this year. While Toyota's sales have been growing around the world, China is the only place where GM has seen recent growth. Rising gasoline costs have helped Toyota sell their more fuel-efficient cars, but some Americans claim that Japan's protected economy, which makes it difficult to sell US cars in Japan, has given Toyota an unfair advantage.
British-Swedish pharmaceutical company AstraZeneca plans to pay $15 billion for American biotechnology company MedImmune, whose main products include a nasal spray flu vaccine and a drug to prevent respiratory infections in babies. MedImmune is currently testing a new flu vaccine, which is part of their appeal to AstraZeneca. At AstraZeneca's annual meeting, some shareholders questioned whether the $58 per share price for MedImmune was worth it; MedImmune's stock had just closed at about $47. Some shareholders felt that AstraZeneca was too desperate for new products after failed tests and regulatory problems prevented them from moving forward with four recent products that they were developing.
When investigations began looking into corruption charges at 160 year-old German technology company Siemens AG, Chief Executive Klaus Kleinfeld pledged to restore the company's reputation. When the company's supervisory board wanted to postpone discussions about extending Kleinfeld's contract, he told them not to bother. According to Kleinfeld, "In times like these, the company needs clarity about its leadership. I have therefore decided not to make myself available for an extension of my contract." The following day, the company announced that there would probably be a "significant increase" in the amount of bribes being investigated at the company and that the US Securities and Exchange Commission had stepped up their investigation into Siemens.
The city council of Birmingham, England, is prosecuting candy and beverage company Cadbury Schweppes for manufacturing and selling chocolate contaminated with salmonella bacteria last year. The company recalled more than one million chocolate bars, but did not inform authorities of the problem until five months after discovering it. Dozens of people got food poisoning, and the bad publicity cost Cadbury Schweppes £10 million. The problem was caused by a pipe that carried waste water from cleaning machinery and leaked into machinery making the chocolate. When recalling the chocolate bars, the company announced that the risk of sickness was low, but the BBC quoted a bacteriologist saying that there are no safe levels of salmonella in chocolate.
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