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Will E.U. Stymie Trump’s Trade Agenda? Maybe Not: DealBook Briefing

The Trump administration apparently proposed the punitive tariffs as a way to secure compromises from trading partners, and bring them into an alliance against China. If the European Union bends to this strategy, rather than rejecting it outright, it would be a notable gain for Mr. Trump.

A compromise by the European Union would also suggest that the United States’ large trade deficits are an advantage in its trade battles. Last year, the European Union exported $151 billion more to the United States than it imported from the U.S. If the United States raised barriers to the bloc’s exports, it’s economies, particularly that of Germany, with which the United States last year had a $64 billion deficit, could suffer.

— Peter Eavis


Shire’s manufacturing plant in Lexington, Mass.

Brian Snyder/Reuters

Allergan and Takeda each weigh a takeover of Shire

Takeda Pharmaceutical disclosed on Thursday that it has bid about $60 billion for the Irish drug maker Shire, though the offer was rejected. But it may have competition in the form of Allergan, which

The disclosures, following weeks of speculation, again raises the prospect of consolidation within the pharmaceutical industry. Drug makers have long looked to big takeovers to broaden their product portfolios.

For Takeda, which is based in Osaka and whose products include treatments for acid reflux and for cancer, a big takeover would give it both more scale — the combined company would have some $30 billion in annual sales — and a bigger international footprint.

But Shire, which is headquartered in Dublin and is best known for producing Adderall, would be its biggest takeover by far. (Its next-biggest acquisition was the $13.7 billion purchase of Nycomed seven years ago.)

Takeda’s main competitor may be Allergan, the maker of Botox, is a veteran acquirer, having been built up through numerous mergers over the years.

Takeda said in a statement that on April 12 it had informally offered £46.50, or about $66, a share for Shire, made up of both cash and newly issued shares. That represented a roughly 30 percent premium to where the target company’s shares had closed on the prior day.

Under the terms of that offer, Shire shareholders would own just over half of the combined company.

Shire said in its own press release that Takeda had bid three times, culminating in last week’s offer. But the Irish company rejected each offer as too low.

After those disclosures on Thursday, Allergan said in a statement that it too was weighing a bid for Shire.

Takeda and Shire said that they are in discussions, which could lead to yet another revised bid.

Yet for both Takeda and Allergan, a deal for Shire could prove financially risky, since each company would need to borrow significant amounts of debt to finance a transaction.

Under British takeover rules, Takeda has until April 25 to decide whether to continue pursuing Shire. Allergan has until May 17 to do the same.

Advising Takeda are Evercore Partners, JPMorgan Chase and Nomura. Advising Shire are Citigroup, Goldman Sachs and Morgan Stanley.

— Michael de la Merced

Jeff Bewkes on fighting Silicon Valley

During his court testimony in Washington yesterday, the Time Warner C.E.O. argued that his company’s proposed $85.4 billion sale to AT&T was necessary, given the “tectonic changes” in the media world wrought by Netflix and Amazon.

More from Cecilia Kang of the NYT:

Among the biggest problems for Time Warner as a stand-alone television and movie producer is that it does not have access to viewer data to target advertising and other valuable customer information the same way that Amazon and Netflix do, Mr. Bewkes said. “We don’t have emails, contact information, billing information … any of these things,” he said.

Lawyers for the Justice Department, which has sued to block the deal, grilled him about an internal document from last year showing plans to create digital products even without AT&T.

Randall Stephenson of AT&T could take the stand today.

Elsewhere in big media deals: Comcast’s bid for 21st Century Fox assets was 16 percent higher than Disney’s, but Rupert Murdoch turned it down because of antitrust worries.


William Hejl, a farmer worried by the threat of Chinese tariffs.

Dan Koeck for The New York Times

The timeline for a potential U.S.-China trade war

As the U.S. and China continue to posture over trade — alarming U.S. farmers, many of whom are in key electoral districts in the Midwest — it’s worth noting three upcoming dates, Peter Eavis writes.

On May 1, exemptions to the tariffs on imported steel and aluminum expire.

On May 22, the public comment period ends for another $50 billion worth of tariffs, and the Trump administration can announce a final list of targets.

And Aug. 18 is potentially the deadline for the administration to act on an investigation into Chinese trade practices. But there’s a provision for a 180-day delay after that.

Key caveats: President Trump has the power to pursue trade policy almost at whim. And a W.T.O. proceeding against China could take years.

Elsewhere in trade: How Qualcomm became collateral damage in the fight (China says its takeover of NXP Semiconductors has “hard to resolve” issues), while Washington continues to fret about Chinese tech. Rusal is betting on China for relief from U.S. sanctions. What worries the Fed about trade. And why Wall Street and trading allies increasingly ignore presidential statements.


Assembling a rifle at the Sturm, Ruger & Co. factory.

Eric Thayer/Reuters

Breaking: Amalgamated presses Sturm, Ruger on gun limits

The politically minded bank already adopted principles for limiting firearm sales laid out by the advocacy group Everytown for Gun Safety. Now it’s using its position as a (small) shareholder in Sturm, Ruger to urge the gun maker to adopt six Everytown principles.

Among them: Supporting mandatory background checks for all sales; binding sellers to a code of conduct; and adopting smart-gun tech. If Ruger doesn’t support those principles, Amalgamated would withhold votes for Sandra Froman, a Ruger director who’s also on the N.R.A.’s board.

Elsewhere in gun sales: Dicks’s Sporting Goods plans to destroy its stock of assault-style rifles.

The political flyaround

• Attorney General Eric Schneiderman of New York wants to change state law to allow repeat criminal charges against offenders granted a presidential pardon. An adviser to President Trump warned that Michael Cohen could flip. And meet the judge in his case, Kimba Wood.

• Karen McDougal and the publisher of the National Enquirer have settled. She can now publicly discuss her claim to have had an affair with Mr. Trump, who is spared the risk of legal proceedings. (NYT)

• A resolution demanding that Scott Pruitt quit the E.P.A. attracted signatures from 170 Democratic lawmakers. (The Hill)

• Ted Cruz’s Democratic challenger, Beto O’Rourke, is within 3 points in the latest Quinnipiac poll. (Axios)

• The Senate voted to overturn an Obama-era rule restricting car lenders from discriminating against minorities. (NYT)

• The S.E.C. voted to move ahead with public consultations on a rule requiring brokers to put clients’ “best interest” first. (Bloomberg)

• The rise and fall of the lobbyist Tony Podesta. (WSJ)


Jason Redmond/Agence France-Presse — Getty Images

The most important part of Jeff Bezos’s annual letter

It’s the disclosure that Prime now has over 100 million members. These are Amazon’s stickiest and most valuable customers, who order often and can access its streaming service. The company had $9.72 billion in revenue from subscription services, including Prime fees.

Mr. Bezos also talks about the importance of “high standards” for his digital behemoth. (And about yoga handstands.)

Elsewhere in Amazon: The company is moving its entertainment division to the Culver Studios, where “Raging Bull” and “E.T.” were made.

The tech flyaround

• Facebook is reportedly designing chips, and working to move 1.5 billion users worldwide beyond the reach of European data privacy rules. An Irish watchdog still has qualms about its facial recognition. And ad agencies are seeking substitutes for its hoard of personal data.

• Uber is reportedly in talks to hire VMware’s Zane Rowe as C.F.O., to help prepare an I.P.O. next year. The last of Otto’s founders, Don Burnette, has left Uber.

• Qualcomm has begun cutting about 1,500 jobs. (Bloomberg)

• Intel is closing its wearable tech group. (CNBC)

• Tencent, JD.com and others will put $437 million into a unit of the embattled tech conglomerate LeEco. (FT)


Lucas Jackson/Reuters

Goldman’s big task: looking less like the Goldman of old

As the firm moves more into consumer businesses — pushing its Marcus online lending platform, buying Adam Dell’s budget-planning app — it is looking less like a traditional investment bank and trading house and more like a one-stop shop. Like the universal banks JPMorgan Chase, Bank of America and Citigroup.

But the shift carries plenty of risk. “It goes against their history as a firm; they’ve no track record of expanding consumer, commercial or corporate banking,” the analyst Brian Kleinhanzl of KBW told the FT.

Elsewhere in banking: Credit Suisse and UBS are reportedly in talks to combine some of their back-office operations. The activist investor Edward Bramson has built a 5 percent stake in Barclays and wants to wind down its trading division, unnamed sources told the London Evening Standard.


William P. O’Donnell/The New York Times

The deals flyaround

• Bankers for Meredith have reportedly ruled out the National Enquirer owner A.M.I. as a bidder for Time, Fortune, Inc. and Sports Illustrated, rejecting a $300 million offer. (Vanity Fair)

• P.&G. agreed to buy Merck of Germany’s consumer health business for $4.2 billion. (WSJ)

• Total of France agreed to buy Direct Energie, a utility focused on clean energy, for $1.7 billion. (NYT)

• Lloyd Blankfein of Goldman Sachs and Jon Gray of Blackstone butted heads over a potential debt deal at a recent lunch. (Bloomberg)

• The U.K. will reportedly approve Melrose Industries’ bid for GKN. (FT)

• Avenue Capital is reportedly planning a social-impact debt fund. (Reuters)

• Bon-Ton Stores is going out of business. (WSJ)

• Grail, a cancer-detection start-up backed by Jeff Bezos and Bill Gates, is reportedly working to raise $1 billion. RealSelf, an online hub for cosmetic surgery information, has raised $40 million. And Green Bits, which makes software to help cannabis dispensaries stay legal, has raised $17 million from Tiger Global Management and others.

Revolving door

• Cerberus Capital Management has hired the former JPMorgan Chase C.O.O. Matt Zames as president. Frank Bruno, a Cerberus veteran, will become co-C.E.O. alongside Stephen Feinberg. (WSJ)

• Wynn Resorts has added three women to its board: Dee Dee Myers, who was a White House spokeswoman in the Clinton administration; Betsy Atkins, an advocate of stronger corporate governance; and Wendy Webb, a former investor-relations chief for Disney. (Bloomberg)

• Deutsche Bank’s C.O.O., Kim Hammonds, and investor-relations chief, John Andrews, are leaving. (WSJ)

• GlaxoSmithKline has hired Kevin Sin from Genentech as a top internal deal maker. (Reuters)

• Jana Partners has hired Dan Hanson, once of BlackRock, and Pulkit Agarwal, formerly of the International Finance Corporation, to work on its social impact investing fund. (Reuters)

The speed read

• The highest-ranking civil servant in Japan’s Finance Ministry resigned after accusations that he had sexually harassed female journalists. (NYT)

• Starbucks will become a test case for training to combat unconscious bias; its effectiveness is still a matter for debate. (NYT)

• Coastal communities are no longer the only ones suing fossil-fuel companies over the costs of climate change. (NYT)

• Porsche’s headquarters in Germany were raided by the police yesterday as part of an investigation into emissions cheating. (NYT)

• The departing editor of Harper’s Magazine, James Marcus, said he had been fired for opposing the publication of a contrarian essay on #MeToo. The magazine disputes that. (NYT)

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