Vodafone Buys German Cable Giant, Rio Tinto Can’t Sell Diamond Operation, and 3 More Hot Stocks
Vodafone (NASDAQ:VOD) is set to acquire Germany’s foremost cable operator, Kabel Deutschland, for a cool $10.1 billion. The mobile company sees the deal as an opportunity to expand its presence in the German market, and will continue to offer cable services as well as broadband to existing customers now.
The sale price represents a price of 87 euro per share paid by Vodafone, which has a market capitalization of $132 billion. Liberty Global (NASDAQ:LBTYA) also wanted to acquire Kabel Deutschland, but did not match the offer made by Vodafone.
Kabel Deutschland is Germany’s largest cable provider, servicing more than 8.5 million households.
Rio Tinto plc (NYSE:RIO) has been trying to find a buyer for its diamond business, which is worth $1.5 billion, amid the global industry downturn in mining. However, it has scrapped its sale after being unable to find a buyer, as Rio is $19 billion in debt, and the volatility of the commodity market both work to scare of potential buyers from paying full price. Rio intended to use the money to pay down the large debt it holds, as well as to return value to shareholders.
Other companies have failed to offload their unwanted operations as well. Barrick Gold (NYSE:ABX) was unable to sell its African operation to China National Gold, and Brazil’s Vale could not sell its mines in Australia.
Rio’s move to sell its diamond arm followed the lead of competitor BHP Billiton (NYSE:BHP), who successfully sold its division to Harry Winston.
Major banks including Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) have presented their own plans to the United States Federal Reserve which outlines how the banks wish to restructure in the case of future failures. The plan would have the largest financial firms maintain debt and equity which would then be used to hold up any failing subsidiary siezed by government regulators.
The banks have proposed that they hold combined debt and equity equal to 14 percent of their risk-weighted assets, with some possibly being forced to issue more expensive long-term debt. Wells Fargo already holds a ration of debt and equity at 14 percent, with Citigroup holding 20.2 percent.
The Fed has not commented on the proposals.
Barrick Gold (NYSE:ABX) has announced plans to layoff up to one-third of its corporate staff in Toronto, according to Chief Executive Jamie Sokalsky. Regulatory compliance issues and a declining gold price have forced the mining company into cost cutting measures, as Sokalsky told employees at a town hall meeting of the pending layoffs. Barrick currently employes over 400 people in its corporate workforce, with the majority being based in Toronto.
These are not the first cuts that Barrick has had to undergo, however. Earlier this month it announced it was cutting jobs at sites in the U.S. as well as in Australia.
Barrick employs around 25,000 people across the world.
Don’t Miss: Vodafone: Sticking to Verizon, Expanding Abroad.