Apr 12, 2011
Japan government downgrades economy view on earthquake
TOKYO |
(Reuters) - - Japan's government on Wednesday downgraded its assessment of the economy for the first time in six months, saying it is showing weakness after a devastating earthquake and tsunami last month battered the northeast coast.
The revision is in line with the Bank of Japan, which also cut its assessment of the economy last week in the wake of the March 11 disaster, saying it would remain under "strong downward pressure" for some time.
"The economy is showing weakness recently due to the influence of the Great East Japan Earthquake," the government said in its monthly economic report for April.
That compared with the previous month's report that said the pickup in the economy was only weakly self-sustaining and there was concern about the influence of the quake.
The government also downgraded its views on key aspects of the economy, including exports, industrial production and private consumption, after the disaster and subsequent nuclear safety crisis disrupted supply chains and triggered power shortages.
"The condition of the economy is no longer flat or at a standstill, but rather the direction is downward," said Shigeru Sugihara, director of macroeconomic analysts at the Cabinet Office.
The government expects the weakness to continue for the near term but with a pickup resuming along with a recovery in production, reflecting solid overseas economies and the effects of various policy measures.
The government also warned of downside risks to the outlook that could stem from power supply constraints, slow progress in restoring supply chains and the impact of rising oil prices.
The government also cut its assessment on exports for the first time in four months, saying there are concerns about a decline due to last month's disaster. Previously, it said exports were showing movement toward picking up.
The Cabinet Office also cut its assessment on industrial production for the first time in five months, saying manufacturing activity was stagnating.
The government's monthly report also cut its view on private consumption for the first time in two months, saying that some weakness was seen recently.
(Reporting by Kaori Kaneko; Editing by Edmund Klamann)
Schneider held early merger talks with Tyco: source
NEW YORK |
Schneider has tapped bankers about financing a potential takeover proposal for Tyco that could create the world's leading maker of security systems, the source said.
Schneider's interest in Tyco has also prompted buyout interest from other industrial conglomerates, although it remains unclear if any other bidder will emerge, the source said, asking not to be named because he was not authorized to speak with the media.
Shares of Tyco rose 7.4 percent to $52.33 on the New York Stock Exchange, valuing the company at about $24.8 billion, after the Daily Telegraph reported earlier on Tuesday that Schneider has sent a letter to the U.S. company's board outlining its interest in buying the business.
CNBC reported after the close of trading on Tuesday that early stage leaks about the talks had made a deal less likely, and Tyco shares eased back about 1 percent to $51.95 in after-hours trading.
"You've got other people who are interested in Tyco, frankly not very many are able to look at the company as a whole but lots are interested in pieces," the source said.
The universe of logical bidders include Siemens AG (SIEGn.DE), Honeywell International Inc (HON.N) and United Technologies Corp (UTX.N), analysts said.
The Tyco board has allowed the start of due diligence, according to the Telegraph report, which cited unnamed sources. However, it said Tyco is thought to be unwilling to accept an offer at less than $65 a share from Schneider.
A Tyco spokesman had no comment. Schneider could not immediately be reached outside normal business hours.
To get a deal done, Schneider might be willing to give Tyco CEO Edward Breen a seat on the board of the combined company, the Telegraph reported.
JP Morgan (JPM.N) and Bank of America Merrill Lynch (BAC.N) have been working with Schneider since September on the takeover deal, the Telegraph said.
The Telegraph report said Schneider's bankers have been looking at a variety of ways of financing the deal, and it cited sources as saying the most likely way a takeover would be financed would be via a part-cash, part-share offer.
Tyco's market capitalization is roughly $25 billion, including Tuesday's gains. Schneider has a market value of about $46 billion. One credit analyst said Schneider would need to issue equity since it could not borrow enough to pay for such a deal.
Schneider, which competes with Germany's Siemens (SIEGn.DE) and ABB (ABBN.VX) of Switzerland, has made a series of small to medium-sized acquisitions over the past year, many of them focused on emerging markets like India and Russia.
Besides security services, Tyco makes fire safety systems and industrial products such as valves and controls used in water and chemical systems.
(Reporting by Soyoung Kim and Nick Zieminski, editing by Bernard Orr, Phil Berlowitz)
TV airwaves needed to counter wireless crunch: FCC
LAS VEGAS |
(Reuters) - Some U.S. airwaves used for free, over-the-air TV signals must be repurposed for mobile broadband use to tackle a looming spectrum crisis, the top U.S. communications regulator said on Tuesday.
The Federal Communications Commission wants Congress to grant it authority to hold incentive auctions that would compensate television broadcasters for giving up some of their spectrum to wireless companies.
"I believe the single most important step that will drive our mobile economy and address consumer frustration is authorizing voluntary incentive auctions," FCC Chairman Julius Genachowski told broadcasters at their annual convention in Las Vegas.
But broadcasters have been resistant to the agency's proposal, worried about the unintended consequences that parting with airwaves could have on their TV signals and the viewers they serve.
"We're talking about putting the whole system at risk," Alan Frank, chief executive of Post-Newsweek Stations Inc, said earlier in the week at the conference.
Repacking the TV band, to clear large contiguous blocks of spectrum considered best for mobile broadband use, could increase interference and degrade the signal strength of broadcasters not parting with spectrum, said Frank.
"We need to start defining not how the auction works, but what this is going to mean for the broadcasters who don't participate in the auction," Frank said.
Genachowski said he understood the concerns broadcasters had, and said he would work closely with them to implement policy that benefited them and the economy.
He noted that broadcasters, under the FCC proposal, would be fully compensated for any expenses related to repacking.
"However, voluntary can't mean undermining the potential effectiveness of an auction by giving every broadcaster a new and unprecedented right to keep their exact channel location," Genachowski said, adding that doing so would give a single broadcaster veto power over the success of an auction.
He praised the industry for looking to take advantage of "a multi-platform broadband world" by introducing new technologies, platforms and business models to reach viewers.
But he made it clear that while the agency is working on multiple fronts to solve the spectrum crunch, the authority to hold voluntary incentive auctions is vital to meeting demand.
The FCC hopes to repurpose 120 megahertz of spectrum through incentive auctions where television broadcasters would voluntarily give up spectrum in exchange for a portion of the proceeds.
Some 25 million Americans watch video on their cell phones, and tablet computers like Apple Inc'siPad put 120 times more demand on spectrum than older phones.
"This growing demand is not going away. The result is a spectrum crunch," Genachowski said. "The only thing that can address the growing overall demand for mobile is increasing the overall supply of spectrum and the efficiency of its use."
Wireless carriers have lobbied for help, saying a spectrum shortage would mean clogged networks, more dropped calls and slower connection speeds for wireless customers.
AT&T Inc last month announced a $39-billion plan to buy Deutsche Telekom AG's T-Mobile USA, in part to deal with its impending spectrum shortage.
The National Association of Broadcasters (NAB) has questioned the existence of a nationwide spectrum shortage, but the group said they would only oppose the auctions if they appeared to harm broadcasters who opt not to part with spectrum or seemed to harm viewers.
Some 43 million Americans rely exclusively on over-the-air television.
(Reporting by Jasmin Melvin; Editing by Tim Dobbyn, Phil Berlowitz)
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