The daily business briefing: April 25, 2018
Shire backs a sweetened $64 billion takeover bid from rival drugmaker Takeda, Amazon launches deliveries to parked cars, and more
Shire urges shareholders to take Takeda's sweetened $64 billion bid
European drugmaker Shire PLC said Wednesday it would recommend that shareholders accept Japanese rival Takeda Pharmaceutical Co.'s sweetened $64 billion takeover offer. The last-ditch bid by Takeda marked its fifth attempt to buy the Dublin-based Shire as it pushes to expand its global reach. If the deal goes through, it will be the largest purchase ever by a Japanese company of a Western rival. Shire shares closed up by 5.9 percent on Tuesday. The company's stock has risen by more than 30 percent since Takeda emerged as a potential buyer in March. Takeda's shares dropped by more than 6.5 percent early Wednesday.
Amazon launches deliveries to parked cars
Amazon on Tuesday started offering deliveries to customers' parked cars in dozens of U.S. cities. The new service is only available to people with vehicles equipped with the proper technology. Amazon couriers can use smartphones to unlock the customer's car, then leave the package in the trunk or on the back seat, and lock the vehicle again before moving on to the next delivery. The service targets people who want to avoid the risk that someone will steal a package left on their front porch, or who want their items delivered to a workplace but their employer can't or won't allow it. To use the service, customers must have a 2015 or later Chevrolet, Buick, GMC, or Cadillac with active OnStar roadside assistance accounts, or a Volvo with the similar On Call service.
Wells Fargo shareholders approve executive raises despite scandals
Wells Fargo & Co. shareholders on Tuesday overwhelmingly approved a compensation plan that provides raises for top executives. The vote of confidence came despite protests over a series of scandals, including the opening of millions of sham accounts by bank employees, and consumer abuse complaints that resulted in a $1 billion fine regulators announced last week. "This company has harmed and wounded millions of its customers," activist shareholder Sister Nora Nash said. CEO Timothy Sloan, who received a 36 percent raise to boost his 2017 package to $17.4 million, said that, "While we have more work to do, we have made significant progress as we work to fix problems."
Concerns about corporate costs weigh on stocks
U.S. stocks plunged on Tuesday after major companies warned about rising corporate costs. Google-parent Alphabet fell by 4.9 percent as its rising expenses overshadowed better-than-expected quarterly profits. Caterpillar sank by 6.6 percent after warning that higher steel prices would take a toll on its bottom line, with its CEO saying the first quarter was a "high-water mark" for the company. The concerns were magnified by the rise of the benchmark U.S. 10-year Treasury yield above the 3-percent level for the first time in four years, driven up by inflation concerns and the Federal Reserve's raising of borrowing costs. The Dow Jones Industrial Average fell by more than 2 percent before paring its losses somewhat and closing down by about 1.7 percent. U.S. stock futures fell further early Wednesday.
Online music streaming becomes industry's biggest money maker
Online streaming services like Spotify and Apple Music have overtaken CD and digital download sales to become the recording industry's largest revenue source, according to IFPI's Global Music Report 2018, released Tuesday. Rapid growth for streaming music services has helped the music industry post its third year of revenue growth, with total recorded music revenue rising 8.1 percent in 2017 to $17.3 billion. Streaming expanded by 41 percent, accounting for 38 percent of the industry's revenue, up from 29 percent in 2016. Music sales fell by 40 percent over the 15 years ending in 2014 as music file-sharing services eroded CD sales, and revenues for 2017 were just 68.4 percent of the market's 1999 peak.