NEWS AT A GLANCE
Microsoft drops Yahoo! takeover
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Deutsche Telekom weighs Sprint bid
Deutsche Telekom, the parent of T-Mobile, is reportedly considering a bid for No. 3 U.S. wireless carrier Sprint Nextel. T-Mobile is currently a distant fourth in the U.S. market, but acquiring Sprint would propel it to No. 1, past AT&T and Verizon Wireless. The U.S. has been Deutsche Telekom’s biggest growth region. (The Wall Street Journal) Deutsche Telekom shares slipped in Frankfurt early today on the news. Sprint’s weak share price and the strong euro could make the acquisition a bargain, German magazine Der Spiegel said. But while it could make sense, said Dexia analyst Rob Goyens, “we are bound to take this morning’s news with a grain of salt.” (Bloomberg)
Buffett sees pain, but no panic
Billionaire investor Warren Buffett, speaking at the end of his annual investors’ conference, said he thinks the worst of the turmoil from the credit crunch has passed, but that the bank losses “aren’t over by a long shot.” About 31,000 investors came to the Berkshire Hathaway conference. (The Wall Street Journal) Buffett said he has been looking abroad for new acquisitions, was “probably close” to a purchase in the U.K., and was looking at bidding on the insurance unit of Royal Bank of Scotland. (MarketWatch) Separately, ex-Fed Chairman Alan Greenspan said he thinks the U.S. is in an “awfully pale recession,” likely until year’s end. (Bloomberg)
The new Chinese outsourcing
With the weak U.S. dollar and the spreading fallout from the credit and mortgage meltdowns, cash-flush Chinese businessmen are increasingly moving their factories to the U.S. Land and electricity now cost less in some parts of the U.S., and state and local governments are offering incentives to counter the higher cost of labor. Many Chinese entrepreneurs are wary of U.S. visa restrictions or upset about a perceived pro-Tibet bias in the run-up to the Olympics, but those concerns rarely trump business. “They don’t want to miss this opportunity to bottom-fish in the U.S.,” said economist Mei Xinyu at China’s Commerce Ministry. (Los Angeles Times, free registration)
