<div>Alibaba’s initial public offering (IPO) has become the biggest ever, at $25 billion. This, after the company’s bankers exercised an option to boost the deal size by 15 per cent. The underwriters bought an additional 48 million American depository shares from the company at the IPO price of $68 each, according to a statement from Alibaba. Including the “greenshoe option”, Alibaba was able to surpass the current IPO record held by Agricultural Bank of China — $22.1 billion in 2010. “Expectations for this company are sky high,” said Li Muzhi, a Hong Kong-based analyst, and added, “The market seems to be using Alibaba as a proxy for the macroeconomy and consumer economy.”</div><div> </div><div><strong><img src="/image/image_gallery?uuid=3c349efd-f206-42e8-80a7-a421fec0e3ae&groupId=222861&t=1412001224326" width="150" height="127" align="right" alt="" />Faking It</strong></div><div>China uncovered $10 billion in fraudulent trade nationwide as part of an investigation that started in April last year. The probe also uncovered many irregularities in the port of Qingdao, the country’s currency regulator said. Companies “faked, forged and illegally re-used” documents for exports and imports, Wu Ruilin, deputy head of the State Administration of Foreign Exchange’s inspection department, said. The trades “increased pressure from hot money inflows and provided an illegal channel for criminals to move funds”, Wu said, adding that those involved would be punished.</div><div> </div><div><strong><img src="/image/image_gallery?uuid=3db7c4db-00b8-421d-b1ee-35d6d0211436&groupId=222861&t=1412001246679" width="120" height="113" align="right" alt="" />Brewing A Deal</strong></div><div>Starbucks will buy the remaining 60.5 per cent share of Starbucks Coffee Japan that it does not own in a two-step deal valued at $913.5 million. Starbucks Japan has operated as a joint venture between Starbucks and its partner Sazaby League since 1995. Sazaby approached the world’s biggest coffee chain about selling its stake in Starbucks Japan, Starbucks said.</div><div> </div><div><strong>Diet Fizz</strong></div><div>The three largest soda companies, Coca-Cola, PepsiCo and Dr Pepper Snapple, promised to reduce <img src="/image/image_gallery?uuid=500ff4a7-97d3-4b3f-8173-6b31374d9208&groupId=222861&t=1412001269461" width="200" height="132" align="right" alt="" />calories in sugary drinks by 20 per cent over the next decade, an unprecedented effort by the beverage industry to fight obesity in the US, and a tacit recognition of consumers’ increasing aversion for high-calorie soft drinks. The firms will expand the presence of low- and zero-calorie drinks and sell them in smaller portions, and also provide calorie counts and promote calorie awareness where the beverages are sold, the American Beverage Association said.</div><div> </div><div><strong>Breach Of Trust</strong></div><div>The European Union’s (EU) anti-trust commissioner, Joaquín Almunia, said Google could face a fine of up to $6 billion if it failed to come up with a better proposal to settle a four-year antitrust probe. A <img src="/image/image_gallery?uuid=07019bb9-9d7f-4b30-ac8c-69b0f57b76a9&groupId=222861&t=1412001559627" width="200" height="133" align="right" alt="" />hard-fought deal announced in February, initially backed by Almunia, collapsed following a wave of criticism from senior European politicians and powerful publishing houses. The commissioner has admitted that a final decision on the case will now fall to his successor, former Danish economy minister Margrethe Vestager, who will assume the post in November, when the current commission’s five-year term ends.</div><div> </div><div><strong>Big Bang Entry</strong></div><div>Germany’s Siemens has agreed to buy US oilfield equipment maker Dresser-Rand Group for $7.6 billion in cash, paying a relatively rich price to belatedly beef up its presence in the US shale oil and gas industry. The acquisition, which ranks among the biggest in the history of the industrial group, will strengthen Siemens’ position in the US, its weakest region, and bring it nearer catching up with rival General Electric. Siemens’ oil and gas revenue will increase to around $11 billion, including the acquisition of Rolls-Royce’s energy gas turbine and compressor business, announced in May, from less than $7 billion before the two deals. </div><div> </div><div><strong><img src="/image/image_gallery?uuid=1d795229-1d31-4979-9a3b-e525125b0803&groupId=222861&t=1412001607442" width="200" height="141" align="right" alt="" />Faulty Members</strong></div><div>Tesco cut its profit forecast by $408.5 million for the third time this year and suspended four members of its staff after finding fault in its accounts, another blow to the reputation of UK’s biggest grocer. It called in new accountants to investigate the error. A profit warning overstated expected first-half profit by 23 per cent. The error, caused by an early booking of revenue and delayed recognition of costs, was discovered during preparations for its forthcoming interim results.</div><div> </div><div><strong>New Line</strong></div><div>General Motors’ premium Cadillac brand will adopt a new naming scheme to compete with overseas luxury rivals as the company’s new leader Johan de Nysschen continues to overhaul the unit. The first of those new products will be christened the Cadillac CT6, a flagship sedan due late next year and aimed at high-end models such as BMW’s 7-series, Mercedes’ S-class, Audi A8 and the Jaguar XJ, GM said. To be built at GM’s Detroit-Hamtramck plant, the CT6 will debut as a 2016 model, slotted above Cadillac’s XTS and CTS sedans. Expected to be priced above $50,000, the CT6 will be a new offering rather than a replacement for an existing model. The rear-wheel-drive sedan will use a new vehicle architecture that is known internally as Omega. It will employ advanced driver-assistance technologies.</div><div> </div><div><strong>Aerial Delivery</strong></div><div>Deutsche Post DHL will use a drone to deliver medication to a German island in the North Sea, marking the first routine drone delivery to customers, and another step in the rapid advancement of the technology. DHL said, as part of a month-long feasibility project, it will start using unmanned aircraft to carry medicine from the harbour town of Norddeich, Germany, to the small island of Juist. Each day, depending on the weather, the drone will fly autonomously on a pre-programmed seven-and-a-half-mile route, the first routine mission in Europe in which a drone will operate beyond the pilot’s eyesight, DHL said. </div><div> </div><div><strong><img src="/image/image_gallery?uuid=6da11465-eeb6-449f-b0a7-669fb840142b&groupId=222861&t=1412001588354" width="180" height="180" align="right" alt="" />Cutting The Cord</strong></div><div>Philips, which started life making light bulbs 123 years ago, is splitting its lighting business in a step aimed at expanding its higher-margin healthcare and consumer divisions. Putting the lighting business in a separate company is part of a wider strategy that began with Philips moving out of less profitable consumer electronics and into fast-growing healthcare markets, largely in emerging Asian markets. The decision to split into two marks a definitive break from its origins in the southern Dutch town of Eindhoven, where Gerard Philips and his father Frederick founded one of the earliest makers of incandescent light bulbs in 1891.</div><div> </div><div>(This story was published in BW | Businessworld Issue Dated 20-10-2014)</div>
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