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AFX TOP STORIES Global 1105 GMT

LONDON (AFX) - Here are the top stories on AFX News

UK Jan manufacturing output unexpectedly drops monthly 0.2 pct

LONDON (AFX) - UK manufacturing output unexpectedly dropped in January though the wider measure of industrial production rose slightly as the Buzzard oil field came on stream, official figures showed.

The Office for National Statistics reported that manufacturing output, which accounts for 14.7 pct of the UK economy, fell by 0.2 pct in January from the previous month, below expectations for a 0.2 pct rise.

EADS reports $1.01 billion loss in 4Q

MUNICH, Germany (AP) - Airbus parent EADS NV said Friday that a weaker dollar and major delays at its Airbus unit dragged its 2006 profit down, caused a multimillion dollar quarterly loss and warned that Airbus would “display another substantial loss in 2007.”

The Amsterdam-based company lost 768 million euros ($1.01 billion) in the fourth quarter compared with a profit of 405 million euros a year earlier. Sales, however, were up 11 percent to 11.96 billion euros ($15.73 billion) compared with 10.76 billion euros in 2005.

Brevan Howard Macro raises 770 mln eur in IPO

LONDON (AFX) - Brevan Howard Macro Ltd said it has raised 770 mln eur by placing 82.8 mln shares in its initial public offering.

The company said the offer comprised of 27.2 mln eur shares at 10 eur each, 45.1 mln usd shares at 10 usd each and 10.5 mln stg shares at 10 stg each.

Japan’s Aeon, Daiei form alliance to create country’s largest retail group

TOKYO (XFN-ASIA) - Aeon Co Ltd and Daiei Inc are forming a broad capital and business alliance to create Japan’s largest retail group, the two companies said.

By combining forces, Aeon, Daiei and Daiei’s largest shareholder, Marubeni Corp, aim to help turn around the struggling Aeon and to grow its business in a difficult market, the three said in a joint statement.

DaimlerChrysler has no plans to spin off commercial vehicles

FRANKFURT (AFX) - DaimlerChrysler AG has no plans to spin off its commercial vehicles division, reported Sueddeutsche Zeitung in an interview with the unit’s chief Andreas Renschler.

“That is not on our agenda. Why would we separate from such a highly profitable business?” said Renschler.

Telefonica requests Merrill Lynch provide financing for eventual Endemol buyer

AMSTERDAM (AFX) - Telefonica SA said it has asked Merrill Lynch to offer stapled financing to the eventual buyer of Endemol NV as the Spanish group is exploring strategic options for the sale of all or part of its 75 pct stake in the Dutch television company.

If Telefonica were to decide to divest its 75 pct stake in Endemol, it said it would solicit from the potential purchaser a public offer for the other 25 pct of the shares outstanding in Endemol.

Telecom Italia sees sales up 1-2 pct/year in 2007-09, vs 3-4 pct seen before

MILAN (AFX) - Telecom Italia SpA said it expects its group sales to rise 1.0-2.0 pct per year in the period 2007-2009 compared to the 3.0-4.0 pct per year growth target provided last year in the group’s previous 2006-2008 plan.

In its new 2007-2009 business plan, Telecom Italia said it expects EBITDA margins to decline by 2.5 and 2.0 percentage points in 2007 and remain broadly unchanged in the following years.

Converium is open to a bidder other than Scor - chairman

LONDON (AFX) - Swiss reinsurer Converium Holding AG, fending off a 2.4 bln usd hostile takeover from French rival Scor SA, is increasingly open to — and looking for — another bidder, but one hasn’t surfaced yet, the Wall Street Journal said, citing Converium

s chairman in an interview.

German Jan trade surplus 16.2 bln eur vs 11.1 bln in Dec

FRANKFURT (AFX) - Germany’s trade surplus in January rose to 16.2 bln eur from an upwardly revised 11.1 bln in December and from 12.4 bln in January last year, according to unadjusted provisional figures from the Federal Statistics Office.

Economists polled by AFX News had forecast the trade surplus would widen to 14.0 bln eur in January.

French Jan trade deficit 2.760 bln eur vs revised Dec deficit 2.584 bln

PARIS (AFX) - French provisional, seasonally-adjusted trade figures for January showed a deficit of 2.760 bln eur compared with a deficit of 2.584 bln in December, revised from a deficit of 2.922 bln eur reported originally.

Economists had expected a deficit in January of around 2.7 bln eur.

Akzo Nobel expects Organon IPO on March 27

AMSTERDAM (AFX) - Akzo Nobel NV expects the IPO for Organon BioSciences to go ahead on March 27, with book-building expected to start on Monday, Organon CEO Toon Wilderbeek said.

Wilderbeek did not give an indication about the share price or how much money Organon hopes to raise through the IPO, but said Akzo Nobel expects to make the price public on Monday.

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Buyers, Walk Away Now

Miner CVRD (RIO) is worth buying because it now has “a monopoly on nickel,” Jim Cramer said Wednesday on CNBC’s “Stop Trading!” segment.

Cramer said the market hates miners right now but makes an exception for the Brazilian metals giant because of its strong position in a crucial material. Cramer said CVRD’s position in nickel is not unlike Nelson Bunker Hunt’s failed effort 27 years ago to corner the silver market, except that CVRD “has got the staying power.”

Cramer also likes Sprint (S) . He contends that the latest quarter and comments on the conference call suggest management is saying, “We’re still stupid but not as stupid as we used to be.” Cramer called the fourth-quarter performance “a good quarter for a bad company” and said the stock, up 6% at $19.50, could head into the mid-20s should an acquirer come calling.

Cramer said Qwest (Q) is a “winner” because falling interest rates will allow the debt-heavy telco to save money by refinancing. He said the stock, up 3% Wednesday at $8.77, will “soon be a teenager.”

Cramer reiterated his comment that investors should look to the three D’s — diversified, defensive and dividend — amid market turmoil. He said those principles underlie his recommendation this morning of Coke (KO) , Procter & Gamble (PG) and Exxon (XOM) .

Terasen Gas sold to Fortis in $3.7B deal

Much of Terasen Inc. the utility formerly known as BC Gas looks to be returning to Canadian ownership following news that its U.S. owner has sold thenatural gas part of the businessto Newfoundland-based power producer Fortis Inc.

Fortis will pay Houston-based Kinder Morgan Inc.$3.7 billion for the natural gas distribution business of Terasen. Terasen Gas owns and operates 44,100 kilometres of natural gasdistribution pipelines and 4,300 kilometres of natural gas transmission pipelines.

“These are high-quality utility assets located in a region with strong economic growth,” said Fortis CEO Stan Marshall in a statement.

“Terasen Gas is a well-run utility which will give Fortis a platform for further growth in the natural gas distribution business,” Marshall said.

Kinder Morgan had bought all of Terasen in 2005 for $6.9 billion. Terasen’s chief attractiveness to Kinder Morgan was considered to be its oil pipeline business, which has links to Alberta’s oilsands region. The company has lines inBritish Columbia,northern Alberta and the U.S. Kinder Morganwill hang on tothe company’s oil pipeline business.

Terasen Gas delivers natural gas and piped propane to900,000 customers in British Columbia 95 per cent of the province’s gas customers.

Following the acquisition, Fortis said itscustomer base would almost double to1,900,000. After the deal is completed, Fortis said its total assets wouldincrease by94 per cent to $8.9 billion.

This is just the latest acquisition for Fortis, which also owns 18 hotels. The company, which trades on the Toronto Stock Exchange, was founded in the 1980s as the parent company of Newfoundland Power, the primary distributor of energy in Newfoundland and Labrador. It now owns 12 hydroelectric generating stations in North America.

AFX TOP STORIES Global 1605 GMT

LONDON (AFX) - Here are the top stories on AFX News

Italy’s Prodi wins second confidence vote

ROME (AFX) - Italy’s centre-left government easily won a vote of confidence today in the lower house of parliament, formally ending a political crisis sparked by last week’s resignation of Prime Minister Romano Prodi.

The centre-left prevailed in the Chamber of Deputies by 342 to 253, with two abstentions by far-left members.

Bayer to cut 6,100 jobs worldwide including 1,500 in Germany

FRANKFURT (AFX) - BAYER AG said its Bayer HealthCare AG business is to cut 6,100 jobs worldwide, including 1,500 in Germany, as part of a plan to generate synergies from the integration of Schering AG.

The company said 3,150 jobs are to be shed in Europe; 1,000 in the US; 750 in the Asia, Pacific and Japan region; and 1,200 in Latin America and Canada.

Cegedim to buy Dendrite for $751 million

NEW YORK (AP) - Cegedim SA, a French maker of software for pharmaceutical companies, said Friday it is buying Dendrite International Inc., which provides sales and marketing services for pharmaceutical companies, for about $751 million in cash.

The $16 per share offer represents a 40 percent premium over Bedminster, N.J.-based Dendrite’s average closing share price from Feb. 1 to March 1 and a a 25 percent premium over Thursday’s closing price of $12.79.

Aker Kvaerner to restructure operations into five global businesses

OSLO (AFX) - Aker Kvaerner ASA said it is to restructure its business by transforming its existing six divisions into “five global business areas”, in a bid to both increase transparency and optimise the efficiency of its overall operations.

The Norwegian engineering firm said that by combining specialised units which work within the same market segments, the company will be able to increase overall capacity and improve its product offering.

EADS unit Airbus could get cash injection from French regional authorities

PARIS (AFX) - The presidents of eight French socialist regional councils yesterday signalled their intention of investing in Airbus’ parent company EADS following the announcement of the Power8 restructuring plan for the ailing aircraft unit.

In a letter addressed to French prime minister Dominique de Villepin, the presidents of eight councils including Midi-Pyrenees, Ile-de-France, and Provence-Cote d’Azur, all of which have a socialist majority, criticised the planned 4,300 French job cuts, and asked for details on how they could take a stake in EADS’ capital.

Lenovo recalls 205,000 laptop batteries

RALEIGH, North Carolina (AP) - Chinese PC maker Lenovo Inc. recalled about 205,000 laptop computer batteries made by Japan’s Sanyo Electric Co., warning that they could overheat and cause a fire.

The worldwide battery recall announced Thursday was the second for the company in the past six months and comes as Lenovo, the world’s No. 3 computer maker, tries to gain ground on its better-known competitors.

Adecco CFO says 1.5 bln eur earmarked for potential acquisitions

ZURICH (AFX) - Temporary employment group Adecco SA said it has a war chest of 1.5 bln eur for potential acquisitions for the coming years, CFO Dominik de Daniel said at the company’s presentation of fourth-quarter and full-year results.

De Daniel emphatically ruled out the possibility of a capital increase to finance acquisitions.

Bodycote rejects Sulzer’s 325 pence a share offer, says it undervalues co

LONDON (AFX) - The board of UK group Bodycote International PLC has rejected a cash offer of 325 pence per share from Swiss engineering firm Sulzer AG.

Bodycote, which is being advised by Lehman Brothers and Credit Suisse, said it considered Sulzer’s proposal but rejected it because it undervalued the company.

Linde 2006 net income up to $2.4 billion

WIESBADEN, Germany (AP) - Linde AG, the world’s largest maker of industrial gases, said Friday that 2006 net income more than tripled after restructuring the business.

Net income rose to euro1.8 billion (US$2.4 billion) in fiscal 2006 from 515 million in the previous year, the company said in a statement. Sales gained 31 percent to euro30.8 billion (US$40.7 billion).

United Business Media FY pretax pre-ex up 5.5 pct, will pay special div of 72p

LONDON (AFX) - United Business Media PLC, the UK publishing and exhibition group, posted a 5.5 pct rise in pretax pre-exceptional profit for 2006 and announced it will pay a special dividend of 72 pence a share this month.

Pretax profit before amortisation and exceptional items increased to 160.5 mln stg from 152.1 mln stg in 2005. Deutsche Bank had forecast pretax profit of 157 mln stg. Continuing revenue grew 16.6 pct to 739.1 mln stg.

Tognum IPO to raise more than 1.4 bln eur - report

FRANKFURT (AFX) - The planned IPO of German engine manufacturer Tognum could raise more than 1.4 bln eur, Financial Times Deutschland reported, citing people familiar with the situation.

Swedish private equity firm and majority stakeholder EQT said on Monday that a final decision about the public listing is to be made in the course of this year, the report added.

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The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

Belarus Announces Compromise With Russia Over Oil Flow

MINSK, Belarus announced Wednesday that it had reached a compromise with Russia in a dispute that has halted oil flows along a key pipeline to Europe after telephone talks between the two countries’ presidents.

The Kremlin did not confirm any agreement although it said in a brief statement that Presidents of Russia and of Belarus had held telephone talks on the oil transit row.

Analysts suggested that Russia was distrustful of Belarus and additionally that Lukashenko could be seeking to pressure the Russians into concessions by trumpeting an accord in the eyes of the West.

“In the course of the conversation, a compromise was found which enables us to resolve the current deadlock, including concerning the transit of Russian oil to European countries through the territory of the Republic of Belarus,” the Belarusian presidency’s press service told The Associated Press.

The press service added that Presidents Putin and Lukashenko had ordered their prime ministers to work out within two days a package of measures to resolve the dispute and submit them for approval by the two leaders on Friday.

On Monday, Russia stopped pumping oil to Europe via the Druzhba, or Friendship, pipeline that crosses Belarus, accusing its neighbor of siphoning off oil. By Tuesday, the stoppage had affected supplies to Ukraine, Germany, Poland, Hungary, the Czech Republic and Slovakia.

http://www.foxnews.com/world/europe/index.html

The oil shortages have caused more damage to Russia’s reputation as a key energy supplier to the European Union, one year after a price dispute with Ukraine led to a brief interruption of EU gas imports from Russia. EU leaders have strongly criticized the shutdown of the oil pipeline.

The dispute centers on Russia’s decision to impose a hefty duty on oil exports to Belarus, with Moscow complaining that the previous duty-free regime has been costing the Russian budget up to US$4 billion a year.

Minsk, whose isolated regime is tied to Moscow through a loose union treaty and relies on cheap Russian energy and duty-free trade with Russia, hit back by slapping duties on Russian oil pumped across Belarus to Europe.

Putin took a harsh stance at a Cabinet meeting Tuesday, ordering his government to work out a set of measures aimed at Belarus to protect the national economy.

Putin also told ministers to consider a possible reduction in oil output Д an indication the standoff could drag on. Russia has a limited capacity for refining oil and would have to cut crude output if its exports decrease suddenly.

Talks between Belarus and Russia broke up in failure Tuesday after Moscow insisted that Minsk annul the oil transit fee.

The Russian business daily Vedomosti reported Wednesday that Russia was planning to impose duties on more than half of Belarusian imports, in what would deal a heavy blow to Belarus’ inefficient, state-dominated economy.

Analysts say that Putin has grown tired of supporting the authoritarian Belarusian leader, who has been dubbed the “last dictator in Europe” by some Western governments for his undemocratic rule and crackdown on dissent.

But the disruption of Russian oil to Europe one year after the Ukraine gas cutoff alarmed European officials and led to renewed calls for energy diversification. Russia currently supplies a quarter of the EU’s oil and over two-fifths of its natural gas.

Yevgeny Volk, head of the Russian office of the conservative U.S-based Heritage Foundation think tank, said that the reported agreement, if true, was still only a verbal one.

“No one in Moscow trusts Lukashenko, who is a master of bluff and who has deceived Russia on many occasions,” he told the AP.

But it was equally possible that the Belarusian leader was playing a complicated game with Russia, he said.

“Lukashenko knows Russia is under immense pressure from the West and the Russian image has suffered tremendously from the interruption of oil deliveries. … One of his goals is to push it into an early compromise,” Volk said.

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