The big deals are back. Companies are enjoying their biggest buying sprees in four years. In recent weeks, megadeals like Procter & Gamble's $52 billion acquisition of Gillette have made headlines. A study by Robert W. Baird and Co., a U.S. investment bank, shows a 52.7 percent jump in the value of global mergers and aquisitions deals from 2003 to 2004. Now, there's even buzz that merger mania is coming to Europe. Last week, speculation helped push the FTSE to the 5,000 mark.
European bankers shouldn't raise their glasses just yet. European M&A did rise last year, with the largest deal being Banco Santander's $15 billion acquisition of Britain's Abbey National Bank. But the actual number of transactions fell by nearly 1 percent. What's more, many experts say the fundamentals don't support a European M&A boom at this point. (European growth is sluggish and interest rates are rising.)
The deals currently underway don't match the buzz. European countries have consolidated internally--all that's left are much trickier cross-border mergers. And companies looking to do those deals are under pressure from politicians who don't want to lose their national champions. Analysts say European companies may also be gun-shy, having suffered disproportionately after the last M&A bubble in 2000 .
It's not all gloom and doom, though. Many experts expect a moderate pickup by the second half of 2005. The big U.S. deals of late may also prompt European sector leaders to re-evaluate their own positions. After the Proctor & Gamble bid, many analysts have been speculating on how Unilever, the troubled Anglo-Dutch consumer-goods giant, will respond. So far, it's not with a merger. In fact, newly appointed CEO Patrick Cescau said last week that he needed to "get the company working with what it has" before making any new purchases. With European corporate profitability continuing to lag behind the United States, his continental counterparts would do well to follow a similar strategy.
When indian Foreign Minister Natwar Singh travels to Islamabad this week, he'll have his work cut out for him. Last September the fledgling peace process between India and Pakistan seemed about to take off. Pakistani President Pervez Musharraf and Indian Prime Minister Manmohan Singh pledged to explore "all possible options for a peaceful, negotiated settlement" of their serious differences, including the disputed territory of Kashmir. But since then, "there have been several steps backward," says a senior Pakistani Foreign Ministry official.
Islamabad complains that no headway has been made on the simplest issues, let alone Kashmir. Proposed bus service between the capitals of divided Kashmir is trapped in a dispute over travel documents. A trans-Pakistan pipeline that would carry natural gas from Iran to India is bogged down in trade issues. Pakistan has even gone to the World Bank for arbitration over a dam that New Delhi is building on the Indus River. "India is not serious in resolving the issue," says Pakistani Foreign Minister Mian Khurshid Mahmud Kasuri. India counters that Pakistan has been dragging its feet on normalizing border trade.
Fortunately both sides still seem deeply committed to peace. In addition to Natwar Singh's trip this week, the Indian prime minister has accepted an invitation to visit the Pakistani capital next month. If progress is to be made it will clearly have to come from the very top.
The search for a new director of National Intelligence in the United States continues. Two of the names most frequently mentioned as hot candidates for the intel-czar job are both members of the WMD commission set up by Bush a year ago to study U.S. intel failures on Iraq and ways to stop nuke proliferation: federal appeals Judge Laurence H. Silberman and Adm. William Studeman, a former director of the hypersecret National Security Agency, which monitors international telecom s and breaks foreign government codes. Silberman is said to be a favorite of Defense Secretary Donald Rumsfeld. Studeman served as NSA director when Dick Cheney was Defense secretary under the then President George H. W. Bush. Asked about his interest in the intel-czar job, Studeman declined to comment; a spokesman for Silberman, who has considerably less intel experience than the admiral, also had no comment.
NEWSWEEK has confirmed that at least two former George H. W. Bush aides--former attorney general William Barr and former CIA director Robert Gates--were approached by the White House regarding the intel-czar position and turned it down.
British P.M. Tony Blair's campaign to save the world from global warming started two weeks ago amid a plethora of dire predictions. Scientists warned that melting Antarctic ice might add several meters to sea levels and that the probability of northern Europe reverting to a new ice age "may rise to 50 percent." A conference of scientists in Oxford, convened at Blair's request, determined "that global warming is one of the gravest threats facing our world today," wrote The Independent of London.
The brouhaha aside, it's not clear what Blair or anybody else can reasonably do. Scientists still don't know to what extent humans have caused the warming. Researchers at Stockholm University have analyzed 2,000 years of data from tree rings and lake and ocean sediments and found that climate may have varied far more than previously thought. A devil's advocate, in other words, could use the data to explain the current warming trend as an almost purely natural occurrence. Of course, the study's authors refrain from jumping to that conclusion, as well they should. But there's some reason to doubt that the apocalypse is now.
Paris, which is making its third Olympic bid in 20 years and appears to be backed by IOC president Jacques Rogge, is still the front runner for the 2012 Summer Games. "If they don't screw up, it's theirs," says one Olympic insider, "but it is the French." New York is ready to take over if they stumble. The Big Apple, once a long shot in the 2012 race, is now a serious contender, thanks to the sophistication of the city's presentation to European sports leaders in Dubrovnik in December, and a charm offensive by NYC2012's top brass. Bid-committee boss Daniel Doctoroff has rounded the globe, courting International Olympic Committee delegates. "I sense we have momentum," he says.
In July, the IOC will choose among New York, Paris, London, Madrid and Moscow. And next week, with a visit from the IOC evaluation commission, NYC2012 hopes to impress with revisions in the athletes' village, transportation scheme (buses, not boats or trains, for athletes) and competition venues (more clusters). It hoped to already have full approval for the $1.7 billion Olympic stadium proposed for the city's West Side, but, Doctoroff says, "we're still on track to have shovels in the ground by the vote."
It's said that urbanity and prosperity go hand in hand. So why is Latin America--dotted with megacities--both the world's second-most-urbanized region and its slowest growing? According to a new World Bank study, local officials can't count. Using international rather than local standards to measure population densities and distances from city centers, bank researchers claim the true rural share of the population is nearer 42 percent, not the official 24 percent.
Policymakers fail to grasp the importance of rural economies and try to "solve rural problems with urban solutions," says the World Bank's Daniel Lederman, and this hurts growth. Due to Latin America's labor-intensive methods, he says, agriculture packs a bigger economic punch than official numbers suggest. Farming counts for only 12 percent of GDP, but triggers so much economic activity downstream that each percentage point of growth yields a 0.22 percent increase in total GDP and a further 0.28 percent rise in the poorest families' incomes, twice what the same amount of manufacturing output would. Apparently, seeing green can produce it too.
American-born model Lee Miller became famous for her looks. But it was her role behind the camera that made her a legend. "Lee Miller: Portraits," currently showing at the National Portrait Gallery in London, reveals why. The exhibit, a collection of her portraits organized chronologically, displays the continuity in her art. Unlike many studio portraits, Miller's never looked staged--they instead gave unmediated access to the subject's self, even when that self was oddly disconnected. Consider Miller's 1943 portrait, "Textile Factory Worker," which depicts a woman disappearing behind a pile of cloth with only her head visible. The body is not present, but the soul certainly is.
Even as a war photographer for Vogue during World War II, Miller managed to capture personalities rather than events. Chronicling the liberation of Paris in the summer of 1944, she shot French artists at work. In one called "Colette," a writer sits at her desk looking at her own reflection in a glass ball. The inverted image brings forth the idea of a reality with multiple layers, as well as a sense of anxiety about the future.
Miller captured people as people rather than as objects. Picasso, whom she befriended in the 1930s, remained a favorite model of hers. And in a 1950 portrait of the painter and her son Antony, it becomes clear what Miller did best. She could suggest intimacy without actually spelling it out.
Much of today's U.S. cultural warfare, argues an entertaining new documentary called "Inside Deep Throat," can be traced back to Gerard Damiano's hugely profitable ($600 million) 1972 "Deep Throat," which briefly made the sad Linda Lovelace a star, almost destroyed co-star Harry Reems's life and raised the wrath of both the religious right and the feminist left. The documentary, directed by Fenton Bailey and Randy Barbatos, includes broad-ranging interviews with Damiano, Reems, Hugh Hefner, Norman Mailer, Erica Jong, Alan Dershowitz and John Waters. "Inside Deep Throat" is more scattershot than deep, but it vividly evokes the days when the "sexual revolution" was supposed to liberate the American libido.
Ed Levine is a native New Yorker. Native New Yorkers love their pizza. But Levine, author of a new guidebook, "Pizza: A Slice of Heaven," has taken that obsession to a new level. Over the last year, he searched for the world's best pizza, eating about 1,000 slices in order to finally proclaim that "61,000 or so" of the more than 62,000 U.S. pie joints serve mediocre stuff. The best U.S. pizza, according to Levine, is made in Phoenix, Arizona, far from what he calls the "Pizza Belt," which runs from Washington, D.C., to Philadelphia, to Trenton, New Jersey, to New York, to New Haven, Connecticut, and ends in Providence, Rhode Island.
Who in the name of all that is deep dished is this guy? "No one has developed his educated subjectivity to a higher level, pizza-wise, than Ed," says friend and food writer Jeffrey Steingarten. Levine, 53, has a day job creating and producing food-related content for various media. But his real passion is to "turn people on to things." That missionary zeal began in 1992 when he published "New York Eats," which told you about where to find, say, the city's best bagel. And he's fascinated by pizza in the same way: how can something so simple be so hard to perfect? The guide is a 359-page exploration of that question--and Levine looks at home and abroad to answer it. He weighs in on pizza in Naples ("Tasty" he says, but the oil, undrained canned tomatoes and moisture from the cheese "made for wet pizzas that occasionally bordered on swampy") and includes other critics' assessments of what you'll find in Argentina, France and Montreal. Essays explore topics like "Pizza Cognition Theory," which holds that your first slice forever shapes your definition of pizza. "It's such a simple food," says Levine. "It invites standards because of that." And extra pounds. Which is why, he says, he's "back on a smart-carb thing." Back?
After six years of wowing audiences around the world, "Mamma Mia"--the award-winning musical set to the music of Swedish pop legends Abba--is finally taking a chance on its homeland, putting on a Swedish version in Stockholm. NEWSWEEK's Ginanne Brownell spoke with the production's creator, Judy Craymer:
Yes, and it seems completely natural. The audience was as crazy there as anywhere else. I think the joy is understanding how the songs work with the story and the characters. So however good one's English is, it is even better when it is in your own language.
It is contemporary and about people that everyone can recognize. I love the idea that businessmen have a great time, grandmothers have a great time, children have a great time. And it's sexy! It's become an industry.
I don't actually, and that is maybe why it has the appeal it has. [The] music is addictive, [it] has come into its own. They have become classic songs. "Mamma Mia" has reinvented those songs. If I were on a desert island I would certainly have to have an Abba album--"Dancing Queen." You know life would not be the same without it.
PERISTAT: 2.68: The number of microseconds lost on Dec. 26 due to the Asian tsunami's effect on the Earth's rotation