2024-07-23 20:52

July 23 (Reuters) - Robert Bosch has agreed to acquire Johnson Controls' (JCI.N) , opens new tab and Hitachi's (6501.T) , opens new tab residential ventilation businesses for $8 billion, it said on Tuesday, in what will be the German engineering group's largest takeover to date. Bosch said Johnson's heating, ventilation and air conditioning (HVAC) business for residential and small commercial applications would strengthen its Bosch Home Comfort arm, boosting the division's sales to 9 billion euros ($9.8 billion) from 5 billion euros currently. Johnson Controls International (JCI) said separately that it stands to receive $6.7 billion in cash from the transaction. Bosch said the addition would strengthen its presence in the United States and Asia, including sales of heat pumps as the company looks to capitalise on global efforts to reduce oil and gas heating to cut greenhouse gases. The sale of the JCI assets includes its North America ducted business and a joint venture with Japanese group Hitachi (6501.T) , opens new tab, which holds a 40% stake. Bosch said it expects the global market for the heating and cooling of buildings to grow 40% by 2030, driven by technological progress, the fight against climate change and new regulations. The deal will be funded through cash on their balance sheet, the company added. JCI said the transaction includes ductless HVAC production sites in Shimizu, Japan, which Hitachi will acquire. Bosch CEO Stefan Hartung has said the company was looking at bigger, potentially global, acquisition targets and that the group was open to listing some of its divisions on the stock market. Reuters reported last month that Bosch was weighing a bid for U.S. appliances manufacturer Whirlpool (WHR.N) , opens new tab. Bosch is no longer pursuing such a deal with Whirlpool after deeming the agreement with Johnson Controls and Hitachi more attractive, according to people familiar with the matter who requested anonymity because the deliberations are confidential. Hartung declined to comment on Whirlpool on Tuesday but said that the Johnson-Hitachi deal would keep the company busy for 12 months. Bosch, which had revenue of about 92 billion euros last year, also makes car parts, factory gear, power tools and home appliances. As part of the deal, Johnson Controls' North America ducted business was valued at a multiple of 16.7 times its 2023 earnings before interest, taxes, depreciation and amortization (EBITDA), the company said. Its stake in the air-conditioning joint-venture with Hitachi was valued at a multiple of 7.5 times its 2023 EBITDA. After tax, Johnson Controls is expected to receive net proceeds of about $5 billion for the deal. Lennox International and Samsung Electronics were among suitors competing against Bosch for the Johnson Controls assets, people familiar with the matter told Reuters in March. Centerview Partners and Citi acted as Johnson Controls' financial advisers while Simpson Thacher served as its legal adviser. Perella Weinberg Partners and Sullivan & Cromwell advised Bosch. ($1 = 0.9194 euros) Sign up here. https://www.reuters.com/markets/deals/johnson-controls-sell-heating-ventilation-assets-bosch-67-bln-deal-2024-07-23/

2024-07-23 20:13

TSX ends down 0.3% at 22,813.75 Energy falls 1.4%; oil settles 1.8% lower Technology adds 0.5% July 23 (Reuters) - Canada's main stock index fell on Tuesday as a drop in oil prices weighed on energy shares, but the move was limited ahead of a potential interest rate cut by the Bank of Canada. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 58.9 points, or 0.3%, at 22,813.75, giving back part of the previous day's gain. "It's hanging in" despite declines for some major sectors, said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. The two heaviest weighed sectors on the TSX, financials and energy, lost 0.2% and 1.4% respectively. Energy fell as the price of oil dropped to a six-week low, settling down 1.8% at $79.96 a barrel, on rising expectations of a ceasefire in Gaza and growing demand concerns in China. The Bank of Canada is widely expected to cut its benchmark interest rate by 25 basis points to 4.50% on Wednesday, its second cut in as many months, after recent data showed inflation easing. "The big day is tomorrow with respect to interest rates and that could move the bank stocks," Small said, adding that lenders could benefit from increased economic activity as borrowing costs fall. Bank of Nova Scotia (BNS.TO) , opens new tab has appointed Anique Asher as its chief strategy and operating officer, the latest senior level move under CEO Scott Thomson who took charge early last year. Its shares were down 0.8%. Industrials were also a drag, falling 0.8% but most other sectors ended higher, including a gain of 0.5% for technology. Sign up here. https://www.reuters.com/markets/tsx-futures-flat-crude-losses-eclipse-gold-gains-2024-07-23/

2024-07-23 19:59

July 23 (Reuters) - Israeli cybersecurity startup Wiz has ended talks with Google-parent Alphabet (GOOGL.O) , opens new tab on a reported $23 billion deal that would have made it the U.S. tech giant's largest-ever acquisition, according to a Wiz memo seen by Reuters. Wiz CEO Assaf Rappaport said the company would now focus on an initial public offering, as it had planned earlier, and aims to achieve an annual recurring revenue of $1 billion. "Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice," Rappaport said in the memo, referring to an acquisition offer. Neither Alphabet nor Wiz have officially acknowledged deal talks. The Wiz memo did not name Google or Alphabet. Google did not immediately respond to a Reuters request for comment, while Wiz declined to comment. Reuters reported earlier this month that Alphabet was in advanced talks to buy Wiz for roughly $23 billion, citing a person familiar with the matter, a valuation nearly double of what Wiz had announced in May, when it raised $1 billion in a private funding round at a $12 billion valuation. Wiz provides cloud-based cybersecurity solutions that help companies identify and remove critical risks on cloud platforms, powered by artificial intelligence. Wiz's decision to call off the deal will be a setback for Google, which has been investing in its cloud infrastructure and focusing on winning clients for the cloud business that generated more than $33 billion in revenues last year. The global cyber outage from last week, brought on by a faulty update from cybersecurity firm CrowdStrike (CRWD.O) , opens new tab, was one of the major reasons for the deal talks falling through, Bloomberg News reported on Tuesday. The outage increased the potential value of cloud cybersecurity companies such as Wiz and led to increased interest in these firms, the report said. The fallout is a second blow for Alphabet in the M&A space in recent times, after reports of its decision to walk away from a deal for online marketing software company HubSpot (HUBS.N) , opens new tab. Wiz would have been Alphabet's second big acquisition in the cybersecurity space, since its $5.4 billion purchase of Mandiant in 2022. Sign up here. https://www.reuters.com/markets/deals/wiz-walks-away-23-billion-deal-with-google-memo-says-2024-07-23/

2024-07-23 19:53

LONDON, July 23 (Reuters) - Paying claims for ships involved in accidents or collisions with other vessels covered by sanctions-hit Russian insurer Ingosstrakh will prove difficult, UK ship insurer West said, in another sign of complications with Moscow's oil trade. In June, Russia's Ingosstrakh, which provides services to Russian oil exporters including ship insurance cover, was added to the UK's list of Russian entities under sanctions in what the British government said was part of efforts to "ramp up economic pressure on Moscow". West is among 12 clubs offering protection and indemnity insurance to ships, which covers third-party liability claims including environmental damage and injury. The 12 insurers, which form the International Group of P&I clubs, cover around 90% of the world's ocean-going tonnage. In one of the first industry responses to the UK sanctions, West said in an advisory this week it "may be constrained on our ability to provide cover for members with regard to any liabilities incurred with another vessel insured by Ingosstrakh". This is especially the case where that is by way of a planned operation such as a ship-to-ship transfer of oil, it said. In the event of a collision with an Ingosstrakh-insured vessel, West added that its members "are advised that the club may need to seek a licence to pay or reimburse any resulting liabilities." "Such a licence may take time to obtain, if indeed it can be obtained at all," West said. In response, Ingosstrakh said the advisory was "a misleading attempt to dissuade shipowners from doing business" with the Russian insurer. "West claims it could be prohibited by sanctions from providing coverage in the event of a collision with a ship insured by Ingosstrakh, but West provides no explanation for why sanctions laws would prohibit coverage payments since payments are made to the injured party, not Ingosstrakh," Ingosstrakh said in an emailed answer to a Reuters' request for comment. Sign up here. https://www.reuters.com/world/europe/uk-ship-insurer-west-sees-problems-paying-claims-with-sanctions-hit-russian-2024-07-23/

2024-07-23 19:25

RIO DE JANEIRO, July 23 (Reuters) - Group of 20 finance leaders are expected to cheer the growing likelihood of a global economic "soft landing" while warning of the risks from unspecified "wars and escalating conflicts," according to a draft communique seen by Reuters on Tuesday. Speaking to the press, Brazil's G20 finance track coordinator, Tatiana Rosito, said negotiations were ongoing, but she "firmly" believed there would be consensus for an extensive joint statement, reflecting the work done so far. Rosito said the Brazilian presidency of the group was negotiating an unprecedented separate declaration on international cooperation on taxation, for which she also saw consensus. This declaration would include the theme of taxing the super-rich, raised by Brazil in its capacity as chair, she said, while she refrained from commenting on which topics faced resistance. According to the draft communique, the G20 finance ministers and central bank chiefs gathering this week in Rio de Janeiro plan to flag the risks of an uneven global recovery hinging on the persistence of inflation. "We are encouraged by the increasing likelihood of a soft landing of the global economy, although multiple challenges remain," the draft communique said, referring to a scenario in which inflation is tamed without triggering a painful recession or sharp jump in unemployment. By avoiding explicit mention of the conflicts in Ukraine and Gaza, diplomats are attempting to sidestep the disagreements between Russia and major Western nations that derailed a consensus at the finance chiefs' gathering in February. Rosito acknowledged that Brazil will issue a chair statement on geopolitical issues, stressing that these matters will be addressed by diplomats in future meetings. The communique was still under negotiation and subject to changes, according to people familiar with the drafting process. "Economic activity has proved to be more resilient than expected in many parts of the world, but the recovery has been highly uneven across countries, contributing to the risk of economic divergence," the draft communique said. The document flagged risks to the economic outlook that remain broadly balanced, with faster-than-expected disinflation and technological innovations cited among upside risks. On the other hand, the document noted downside risks such as escalating conflicts, economic fragmentation and persistent inflation keeping interest rates higher for longer. In line with the Brazilian presidency's focus on global inequality, the draft communique warned that "climate change ... can substantially aggravate inequality challenges," and flagged "debt distress" in "several low- and middle-income countries." The document also stepped up language calling for a reform of the International Monetary Fund, citing the "urgency and importance of realignment in quota shares to better reflect members' relative positions in the world economy." A call to resist protectionism, although little changed from Brazil's chair summary in February, was broken out as a standalone paragraph in the draft communique. TAX THE RICH The G20 draft statement stopped well short of endorsing Brazil's call for a global tax on billionaires, stating that ministers "take note" of revenue studies commissioned by the International Monetary Fund and by Brazil. But it references the "Rio de Janeiro G20 Ministerial Declaration on International Tax Cooperation," which it says restates a commitment to tax transparency and fosters "the global dialogue on fair and progressive taxation, with particular attention on ultra-high-net-worth individuals." The draft marks an advancement from the G7 leaders' statement , opens new tab in June, which calls for the "progressive and fair taxation of individuals" but fails to mention the ultra-rich. The G20 statement also called on countries to complete negotiations for final language on "Pillar 1" of a two-part global corporate tax deal to reallocate taxing rights on large multinational corporations, which G20 ministers are discussing this week. This includes language covering companies with more than $20 billion in annual revenues as well as a framework for the "Amount B" method of simplifying the calculation of transfer pricing and tax liability for other smaller multinational firms. "We are looking forward to signing the Multilateral Convention (MLC) as soon as possible. We encourage the swift implementation of the Two-Pillar Solution for all interested jurisdictions," the draft statement said. Sign up here. https://www.reuters.com/world/g20-sees-growing-chance-soft-landing-global-economy-draft-communique-2024-07-23/

2024-07-23 19:19

SANTIAGO, July 23 (Reuters) - U.S. miner Freeport McMoran (FCX.N) , opens new tab plans to invest around $7.5 billion to expand its El Abra copper mine in Chile, a project expected to take seven to eight years to develop due to permitting requirements, CEO Kathleen Quirk said on Tuesday. Speaking in a call with analysts after reporting second quarter results that beat profit estimates, Quirk said Freeport planned to submit an environmental impact statement by the end of next year. "We're going to continue to review the economics in the context of market conditions, but believe this is a project that will be required in the future to support long-term copper demand trends," Quirk said. Freeport owns 51% of El Abra, with the remainder held by Codelco, one of the world's biggest copper producers. The mine produced 98,400 metric tons of copper last year, according to data from state agency Cochilco. Freeport Chairman Richard Adkerson said Codelco was "anxious for us to move forward" and supported the company developing a relationship with Chilean President Gabriel Boric. He noted that Boric had proven to be supportive of the mining industry. "The tone is significantly changed from his initial election period," Adkerson said. Quirk added that Chile as well as Peru, home to Freeport's copper and molybdenum mine Cerro Verde, were both interested in attracting more investment in the sector. In Chile, she said Freeport was hopeful that the government would carry out its aim to streamline permitting for mining projects. The expansion at El Abra calls for a new concentrator plant, pipelines for water requirements, and investments in desalinization. It would yield 750 million pounds of copper and 9 million pounds of molybdenum per year, Quirk said. Sign up here. https://www.reuters.com/markets/commodities/us-miner-freeport-mcmoran-invest-75-billion-chile-mine-diario-financiero-2024-07-23/