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Protectionism In Europe


Not in my house, you don't. Economic nationalism is rearing its head once again as France and Spain maneuver to fend off takeovers of domestic utilities. Italian energy group Enel (EN) wants to buy Paris utility giant Suez (SZE), but on Feb. 27, France unveiled plans for state-controlled gas outfit Gaz de France to marry Suez instead. Meanwhile, Spain is pushing a wedding between Madrid power company Endesa (ELE) and Barcelona's Gas Natural to stop German utility E.ON (EON) from sweeping Endesa off its feet with a handsome offer.

The infuriated suitors note that such moves flout the European Union's push to integrate energy markets. Italy has asked Brussels to step in. But legal experts say that while the French and Spanish deals would violate the spirit of integration, they may not run afoul of antitrust laws.

See "Europe's Utilities Stay Close to Home"

The utility industry is lighting up investment banking in the U.S., too. On Feb. 26, Brooklyn's KeySpan (KSE) accepted a $7.3 billion offer by Britain's National Grid (NGG) that will create the third-largest utility in the U.S. Meanwhile, The Wall Street Journal says Dallas-based TXU (TXU) may sell part of its distribution business, possibly to GE (GE). TXU declined to comment. Last year, Congress undid the Depression-era law that restricted utility mergers. The repeal took effect on Feb. 8 and is likely to send megawatts of financial electricity coursing through the business.

Unconventional to the end, Colgate-Palmolive (CL) CEO Reuben Mark, who once wore a pony tail and hasn't done a press interview in at least a decade, chose to reveal his successor at a 7 a.m. analyst conference in Arizona on Feb. 24. The choice, Ian Cook, a Colgate veteran who was named president last year, is less surprising than the nonchalant manner of his anointment. He'll get the job in 2007, with Mark remaining chairman for a while. Colgate, the world's largest oral-care brand, has been warring with Procter & Gamble (PG) in both the U.S. and juicy foreign markets like China. But results got brighter in 2005, and Mark promised more dazzle down the line.

Peppered with birdshot from Capitol Hill -- and with the Bush Administration hunting for cover -- Dubai Ports World agreed on Feb. 26 to submit to a new, 45-day security review for its planned takeover of management duties at six U.S. ports.

Looks like GE (GE) didn't bring enough good things to life for Stacey Snider, the 44-year-old head of Universal Pictures, who is jumping to Paramount Pictures to oversee its newly acquired Dreamworks live-action studio. Snider, the creative force behind such Universal hits as 40-Year-Old Virgin and Meet the Fockers, was said to have chafed under GE. She was especially dismayed when, after months of negotiations, the tight fists at GE sent Dreamworks into the arms of Paramount, which grabbed it for $1.6 billion.

See "Stacey Snider Up Close"

No place seems safe from bird flu. Just days after France became the first EU member to report an outbreak of the H5N1 virus at a turkey farm, Germany confirmed on Feb. 28 that a domestic cat in Bavaria died of the disease, probably from eating an infected bird, and Sweden detected the virus in wild ducks. The economic pain is already spreading: Although cooked poultry poses no danger, some 43 countries have banned French fowl. On Mar. 1, U.S. Health & Human Services Secretary Michael Leavitt said bird flu could hit the U.S. soon.

Call it the case of the phantom transactions. The New York Times (NYT) said on Feb. 24 that Deutsche Bank (DB) is trying to settle a Justice Dept. probe into tax shelters the Frankfurt bank may have set up for U.S. customers. If so, it would follow Munich bank HVB, which in February paid $30 million and acknowledged criminal wrongdoing in a similar case. But the Times says Deutsche may have a tougher time because it can't come up with documents for some of the loss-making loans, trades, and swaps on which the shelters were based. A bank spokesman declined to comment.

There's a small radioactive cloud hanging over President George W. Bush's first trip to India, which began on Mar. 1. Most of his agenda was pleasant enough: He's expected to sign business and technology transfer deals in Delhi and Hyderabad, though he's snubbing the Taj Mahal. But he may also ink an accord allowing for U.S. sales of civilian nuclear technology if India agrees to separate its civil and military nuke operations. That has critics growling in both nations. In the U.S., where Congress would have to O.K. the deal, they're unhappy that Washington might exempt nuclear-armed India from export controls; in India, that Prime Minister Manmohan Singh is giving way to foreign pressure. Overall, though, U.S.-India ties have never been more cozy.

See "Wooing India with a Capital W" and "Bush's Visit Highlights India's Growth"

How jumpy are Google (GOOG) investors these days? Wall Street responded on Feb. 28 to an unsurprising statement by CFO George Reyes that "our growth rates are slowing" by knocking 7% off the stock price.

Adding insult to injury for the U.S. auto industry, Consumer Reports on Mar. 1 named its top 10 vehicle picks -- and for the first time they're all Japanese marques. On the same day, carmakers reported February sales. GM (GM) slipped 3%, and so did Ford (F), minus its European brands -- but its Volvo (VOLVY) and Jaguar units crashed by double digits. One bright spot: DaimlerChrysler's Chrysler Group (DCX) sales accelerated 3%. Then look at the Asians: Toyota (TM) up 2%, Honda (HMC) up 9%, Nissan (NISANY) up 2.2%, Suzuki up 39%. Mercedes, Volkswagen, and Porsche all logged zippier numbers, too.

Throw another bison on the barbie, Ted. Nine years after selling his media holdings to Time Warner (TWX), maverick Ted Turner is bidding farewell, announcing on Feb. 24 that he's quitting the board after its May annual meeting. He'll spend more time on philanthropy, his 1.7 million-plus acres of ranchland -- and his real growth vehicle, the Ted's Montana Grill restaurant chain. Ted's, which features bison burgers as well as salmon, chicken, and steaks, began with one eatery in Columbus, Ohio, in 2002 and is already up to 39. It's also selling its chili and beans in Whole Foods Market (WFMI)s. The 67-year-old cable entrepreneur, who launched CNN in 1980, had been grumpy with Time Warner since its ill-starred 2001 America Online merger and of late has sold much of his 4% stake, once valued at $9 billion. He's thought to be down to about 0.7%, worth $600 million. That may be far from his glory days, but Turner's estimated net assets of $2 billion will feed a heck of a lot of bison.


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