South Korea: Samsung heir arrested
Samsung is in turmoil after South Korean officials arrested the company’s “heir apparent” on corruption charges, said Matt Stiles in the Los Angeles Times. Authorities have linked Samsung vice chairman Lee Jae-yong, son of chairman Lee Kun-hee and the firm’s de facto leader, to an influence-peddling scandal that has ensnared South Korean President Park Geun-hye. Prosecutors allege that Lee Jaeyong, 48, diverted $38 million to Park confidante Choi Soon-sil “to boost support for a controversial merger between two Samsung affiliates.” Lee denies any wrongdoing. A separate court process is deciding whether to make Park’s December impeachment by the legislature permanent
The arrest has renewed calls for South Korea to rein in its massive family-run corporations, known as chaebol, said Paul Mozur and Choe Sang-hun in The New York Times. Chaebol play an outsize role in the South Korean economy, “with the 10 largest generating annual revenue exceeding 80 percent of South Korea’s gross domestic product.” Samsung’s electronics arm alone accounts for more than one-fifth of the country’s exports. But their power “is coming up against rising public anger over the perception of corruption and favoritism.” Among the 10 top chaebol, six company leaders have been convicted of white-collar crimes; many have received pardons or reduced sentences
Washington: White House could change trade stats
The Trump administration might tweak how the government calculates the U.S. trade deficit, said William Mauldin and Devlin Barrett in The Wall Street Journal. The White House is looking at excluding so-called re-exports from its calculations, so liquefied natural gas that the U.S. imports and stores before transferring to other buyers around the world, for example, would no longer be counted as an export. That would make trade deficits “appear larger” than in years past and “give the Trump administration ammunition” to argue for a renegotiation of trade deals and for imposing new tariffs.
Food: Burger King owner to buy Popeyes for $1.8B
The company that owns Burger King and coffee chain Tim Hortons is adding fried chicken to its portfolio, said Nathan Bomey in USA Today. Restaurant Brands International agreed this week to purchase Atlantabased Popeyes Louisiana Kitchen for $1.8 billion. The Southerninspired fast-food chain has more than 2,600 locations, “about double what it had in 2008,” but its sales growth has slowed over the past year. Brazilian investment firm 3G Capital, which owns 42.6 percent of the voting shares in Restaurant Brand and engineered Burger King’s takeover of Tim Hortons, is known for aggressive cost cutting.
Retail: Online sales surge for Walmart
Amazon dominates the online marketplace, but Walmart “is catching up fast,” said Paul La Monica in CNN.com. The big-box retailer said this week that its fourth-quarter online sales grew 29 percent from a year ago, compared with 22 percent for Amazon. Walmart has taken big steps to grow its digital business, spending heavily on acquisitions like e-commerce startup Jet.com and rolling out free two-day shipping on online orders over $35. Still, Walmart’s online sales account for only 3 percent of its annual global sales, about $14 billion. That compares with $94 billion in net global sales for Amazon.
Consumer goods: Kraft walks away from Unilever bid
Kraft Heinz has ended its brief courtship of consumer goods giant Unilever, said Carl O’Donnell in Reuters.com. The U.S. food firm pulled back from its $143 billion merger proposal last week after being “flatly rejected” by Anglo-Dutch Unilever, which owns brands like Lipton Tea and Dove soap. Unilever executives reportedly felt their business was too distinct from Kraft’s. But Kraft’s willingness to look outside the food industry for big buys could hint at future deals. Analysts have floated Colgate-Palmolive as a potential target. ■