Cyrus Mistry nominated Tata's successor
After much speculation, the board of the Tata Group nominated 43-year old Cyrus Mistry, younger son of billionaire Parsi business tycoon Pallonji Shapoorji Mistry, as Deputy Chairman for Tata Sons.
Mistry senior has an 18.5% stake in the group, valued at a whopping $8.8 billion. Cyrus has been a board member for the Tata Group since 2006. Considering the hostility between the Ambani brothers, the Birlas' split into eight factions in the 1980s, Bajaj group's divide between brothers Rahul and Shishir Bajaj, Thapar Group & DCM split, the succession came rather smooth and swift in the case of the Tatas. The baton passed rather peacefully with no bad blood remaining. Besides the fact that Ratan Tata has no heir to succeed him, the Tata group has successfully maintained a distance between family relations & business, which is a valuable lesson for India Inc. in general and will be apparent in the times ahead for the Tatas.
Change of Guard
Citibank appointed Anand Selva as head of its consumer banking operations in India in May. Earlier, he was heading the bank's consumer banking division in China. Selva replaced N. Rajashekharan, who moved to a new role within the Asia Pacific regional operations of the bank. Citibank was hit by a Rs.40 million staff fraud at its consumer unit in December, 2010 and change of guard is considered to be a fallout of this. Citibank may also initiate further management changes as it attempts to strengthen its internal risk management processes.
In another change of guard, Reckitt Benckiser Group, a leading global consumer goods company, has appointed India-born Rakesh Kapoor as Chief Executive Officer. Kapoor will take over from Bart Becht, who has held the post for 16 years. Kapoor is currently the Executive Vice President, Global Category Development at RB and an Executive Committee member.
Subway Vs McDonald's
Sandwich chain Subway overtakes McDonald's, the world's largest hamburger chain, to become the largest restaurant chain across the globe in terms of stores. According to a regulatory filing in February from the burger giant, Subway had 33,749 restaurants at the end of 2010 and McDonald's had 32,737. Subway, like many restaurant chains, is eying international markets as the demand for sandwiches in the U.S. is limited. The number of Subway outlets are expected to increase further as the company is looking to come up with more branches in strategic locations in various countries including China. However, the growing number of Subway restaurants overseas don't earn enough revenue to beat McDonald's, which still holds the top position as the world's largest fast food restaurant chain in terms of sales.
Anshu Jain appointed co- CEO of Deutsche Bank
Anshu Jain, regarded as one of the strongest contenders to replace current CEO of Deutsche Bank, Josef Ackermann,was finally named but as a Co-CEO with Juergen Fitschen at the Deutsche Bank AG. The 48-year-old Jain was serving as the head of investment at the bank. Despite his impressive credentials and an enviable track record, Jain failed to emerge a clear favourite, presumably because of lack of business and political connections in Germany. But Jain has been a star performer at the bank for the past 16 years and it was difficult to overlook his claim to the top job.
GVK acquires Hancock
In one of the largest international deals initiated by an Indian infrastructure firm, GVK Power initiated to acquire Australia based Hancock Coal for $1.26 billion in the September. After the acquisition, the Andhra Pradesh based firm will get bulk holdings in Hancock's port infrastructure ventures, coal resources and railway line. GVK Power handles coal supply contracts of up to 20 million tonnes each year, which will help in generating more than 7,000 megawatts of power. GVK Power believes that this deal will make a significant contribution to the overall GVK portfolio and will also increase shareholder wealth. The group hopes to hike the coal power capacity with assured in-house raw material.
RIL's $7.2 billion deal
In what is termed as the biggest dose of FDI in Mukesh Ambani's books, Reliance Industries Ltd. (RIL) announced a sell-out of 30% in its oil & gas exploration blocks to global oil giant BP Plc. for a massive $7.2billion on February 21, 2011. As per the deal, RIL will also receive another $1.8 billion, if the partnership achieves some (undisclosed) performance goals. Besides the technical expertise that this deal brings to RIL's table, the collaboration will also result in increased natural gas production and recovery rates and higher probabilities of discoveries. The plan also involves a 50:50 JV for sourcing and marketing of gas, which will see a combined investment of $20 billion over the next few years. The cash that this deal directly brings to RIL will be strategically used to fund its shale gas venture in US.
SBI gets a new head
Adding yet another chapter in the history of India's largest state owned bank, the Prime Minister, Manmohan Singh cleared the appointment of Pratip Chaudhuri as the chairman of State Bank of India. Chaudhuri, who was formerly the Deputy Managing Director of international banking took over from O.P. Bhatt on April 07, 2011. He was the top contender for the chairman’s post ahead of his colleague Hemant G Contractor, who is the CFO of the bank. The government thus appointed Contractor as MD with promoting two other deputy managing directors - Diwakar Gupta and A Krishna Kumar - as Managing Directors. This is the first time when SBI has four MDs. Recently, Chaudhuri was closely involved with the central government to work out a payment settlement mechanism for oil and other imports from Iran, which is currently facing international sanctions.
BNP Paribas' $96 billion asset sale
BNP Paribas' $96 billion asset sale was a move to insulate itself from the impact of the Greek debt crisis, BNP Paribas, the largest French bank, tried to sell $96 billion of risk-weighted assets to allay investor fears about the bank's leverage and funding. The bank also planned to reduce its US dollar funding needs by $60 billion by the end of 2012. Unlike some of its main rivals like Société Générale and Crédit Agricole, BNP has been lucky to escape Moody's Investors Service's review without a change in rating. But that's not a long-term remedy as the agency said it would extend its review for a possible downgrade of BNP's long-term debt and deposit ratings. By selling assets, BNP will be in shape to reach a core Tier 1 ratio of 9% by Jan. 01, 2013, under the new Basel-III regime, which calls for more stringent capital requirements.
Groupon Inc. successfully raised $700 million to become the largest IPO by any US Internet company since Google Inc raised $1.7 billion in 2004. Post the IPO, the company, which sells discounted Internet gift coupons for cinema tickets, restaurants, clubs et al, was valued at $12.8 billion. With its current valuation, Groupon's value stands at more than double of what Google offered to buy the company last year - $45.9 million. Groupon now stands to face a stiff competition from big players like Google and Amazon. The company serves more than 150 markets in North America and over 100 markets across Asia, Europe and South America and employs over 7000 people. However, this kind of valuation is not something new for Internet companies. In the past two years, Facebook, LinkedIn, Twitter et al have all seen multi billion dollar valuations.
Italy sells bills
Italy sold 6.75 billion euros ($9.4 billion) of treasury bills in its first auction since borrowing costs began to rise amidst fears of the Greek debt crisis spreading and infecting other regions in the euro zone. The Treasury in Rome sold one-year bills at an average yield of 3.67%. The last time the Treasury sold similar securities was in June, when the yield was as low as 2.147%. The sale came even as the European finance chiefs met in Brussels to discuss the Greek-debt and find ways to prevent the crisis from spreading to other debt-ridden countries in the euro zone.