• briefing asia infrastructure aug 15, 2006 • briefing asia energy aug 15, 2006

China Mobile pursues $5.3-billion acquisition; Purchase of Millicom would be largest overseas takeover by a Chinese company
JASON SINGER AND JASON DEAN

Wall Street Journal

613 words

25 May 2006

The Globe and Mail

GLOB

B14

English

All material copyright Bell Globemedia Publishing Inc. or its licensors. All rights reserved.
LONDON, BEIJING -- China Mobile Communications Corp. is near a $5.3-billion (U.S.) pact to acquire Millicom International Cellular SA of Luxembourg, operator of mobile-telephone services in many of the world's poorest nations, in a move that would expand China's influence into international telecommunications, especially in emerging markets.
The expected deal — the biggest overseas acquisition by a Chinese company — could also have a ripple effect on Chinese suppliers of telecom equipment and mobile handsets such as Huawei Technologies Co. and ZTE Corp. China Mobile is expected to upgrade the network of Millicom, which operates in 16 countries.
Gao Songge, deputy director of the General Department of China Mobile, said that “the talks are still going on. . . . There's no news for disclosure for now.” A spokesman for Millicom declined to comment.
The deal, which could be signed within days, is the latest sign of Chinese companies' ambitions in snapping up international assets. After watching Western companies invest billions in their home market, Chinese companies in recent years have been looking at purchases abroad, most notably with Lenovo Group Ltd.'s purchase of the personal-computer division of International Business Machines Corp. For China's government, the expansion of Chinese companies overseas is part of a broader push to expand the country's global influence.
But Chinese oil company CNOOC Ltd. last year failed in its high-profile $18-billion bid to take over Unocal Corp. after opposition to the deal from Congress. That led to great frustration in China, and Chinese companies increasingly are looking instead toward the world's faster-growing emerging markets.
State-owned oil company CNPC International Ltd. last year paid $4-billion for Petrokazakhstan Inc., which controls oil fields in Kazakhstan. Other recent Chinese deals have been completed in Nigeria, Ecuador and Peru, and more are being sought in Russia and Sri Lanka.
China Mobile plans to leverage its access to inexpensive and plentiful engineers, designers, contractors and others needed to build new Millicom networks, or to upgrade existing networks in its far-flung locales, according to people familiar with the matter.
Emerging markets represent a particularly attractive market for telecom companies as Western markets become saturated. In many developing nations, the fixed-line infrastructure is poor and limited in its range, so cellular networks, which are cheaper to roll out than traditional lines, are used as the primary means of communication.
China Mobile has built one of the most extensive national cellular networks in the world, covering all of mainland China. With more than 250 million wireless customer accounts as of last month — all in China — China Mobile is by far the world's biggest wireless carrier and controls about two-thirds of the mobile market in China.
China Mobile is owned by China's government. The company owns about 75 per cent of China Mobile (Hong Kong) Ltd., which is listed in Hong Kong and on the New York Stock Exchange.
Nasdaq-listed Millicom would be China Mobile's first overseas acquisition. China Mobile is in the final stages of inking an agreement to buy Millicom for $48 a share in cash, according to people familiar with the situation. The deal still hinges on several layers of administrative approvals in China, and will be contingent on the Chinese company receiving at least 75 per cent of Millicom's shares. Millicom's shares rose $1.24 to $45.04 in 4 p.m. Nasdaq Stock Market trading.
Document GLOB000020060525e25p0006n
New vaccine can help save children from deadly virus.
956 words

25 May 2006

Irish Times

IRTI

15

English

(c) 2006, The Irish Times.
 Under the Microscope / Prof William Reville: If asked to name a deadly virus, most people would nominate the HIV virus that causes Aids, and some would mention the Ebola virus or the Sars virus. But few would mention the rotavirus, even though it kills more children annually than HIV/Aids.
Rotavirus causes vomiting and diarrhoea and infects most children in their early years. The diarrhoea can be so bad that, untreated, it can kill the child by shock from dehydration. An estimated 610,000 children die annually from rotavirus - 5 per cent of all deaths younger than five years. The good news is that vaccines have just been tested that promise to effectively tackle this deadly disease. The story is outlined by Roger Glass, a leading epidemiologist, in Scientific American, April 2006.
Viruses are tiny biological entities made from protein and nucleic acid. The nucleic acid is either deoxyribonucleic acid (DNA) or ribonucleic acid (RNA) and contains the information content (genes) of the virus. The protein forms a protective coat around the nucleic acid. The rotavirus is a spherical particle (about 70 billionths of a metre across) and looks like a wheel when seen in the electron microscope - hence the name, derived from the Latin rota for "wheel".
In 1973 it was discovered that rotavirus infects children causing diarrhoea. The route of transmission is faecal-oral. A virus - bearing droplet landing on a baby's thumb quickly gets into the mouth, from where the viruses soon reach the small intestine. They infect the cells of the intestinal lining where they replicate themselves at great speed, killing the infected cells. The infected intestinal cells are shed and are excreted in floods of fluid as diarrhoeal bursts. If rehydration therapy is not given the child can lose up to 10 per cent of body weight and enter shock within a couple of days.
I have a personal interest in human rotavirus. I carried out most of my research using the electron microscope. In 1980 I was approached by Michael Mahony of the department of paediatrics in Cork University Hospital and asked to examine normal and diarrhoeal infant stools in the electron microscope at UCC. I was excited to see the first ever image of the rotavirus in Cork. We (MJ Mahony, RG Barry, WJ Reville) published the results in the Irish Medical Journal, Vol 74, 171-173, 1981.
Although nearly all children under five everywhere contract rotavirus, most deaths occur outside of North America and Europe, in locations where access to medical rehydration therapy is limited. The 10 countries where rotavirus diarrhoea is deadliest are India, Pakistan, China, Nigeria, Congo, Ethiopia, Afghanistan, Bangladesh, Indonesia and Tanzania.
Children who survive their first rotavirus infection remain unharmed in the long term and are very unlikely to suffer rotavirus diarrhoea again. This is because they have acquired natural immunity against the virus and, if challenged again by the virus, automatically produce antibodies to inactivate the pest. It was clear from the start that the only hope of successfully combating this disease was to develop a vaccine that would imitate this natural immunity.
The principle of vaccination is to fool the immune system into thinking it is under attack by using a form of the infectious micro-organism that poses no threat, eg in the case of a virus either an inactivated virus, or a form weakened to such an extent it cannot trigger disease. The immune systems reacts to the inactivated/attenuated agent (vaccine) and produces antibodies just as it would against the active virus itself.
The pharmaceutical companies were emboldened to invest huge resources in developing rotavirus vaccines because the potential market is enormous. GlaxoSmithKline tested an oral vaccine in 1983 based on a weakened strain of bovine rotavirus. Trials in Finland showed the vaccine reduced the chance a vaccinated child would develop severe diarrhoea by 88 per cent. However, later trials in Africa and Peru gave inconsistent results. Malnutrition and poor general conditions affect a child's response to vaccination. The company put the vaccination programme on hold.
In 1991 Wyeth Ayerst (now Wyeth Pharmaceuticals) was given permission to test another vaccine, called RotaShield, an attenuated molecular hybrid of monkey and human rotavirus. Large-scale tests in the US, Finland and Venezuela demonstrated the vaccine's efficacy and safety. However, in 1999 several infants suffered a serious complication called intussusception after vaccination, whereby a short segment of intestine folds into a nearby region to cause a blockage. This painful condition must be quickly reversed with an enema and, in rare cases, causes death. The vaccination programme, the product of 15 years work and several hundred million dollars, was shelved.
Researchers suspected that the intussusception problem was related to the monkey strain of rotavirus. GlaxoSmithKline (GSK) and Merck independently started huge trials - GSK using an attenuated human rotavirus (Rotarix) and Merck a hybrid bovine-human rotavirus (RotaTeq). Those trials, the largest and most expensive safety trials ever conducted, have now been completed. The new vaccines offer 85- to 98 per cent protection against rotavirus diarrhoea and do not increase the natural incidence of intussusception.
These vaccines cost several hundred million dollars each to develop and so they will, at least initially, be expensive. Efforts must be made to make them affordable to the many millions of children born annually in the poorest and most vulnerable regions. With help from a committed world the principal killer of children in the developing world should be eliminated by effective vaccination within 10 years. This will be a wonderful demonstration of the power of science-based technology to do good.
William Reville is associate professor of biochemistry and public awareness of science officer at UCC
Document IRTI000020060525e25p00049

Leading the News

China Mobile Nears $5.3 Billion Deal for Millicom --- Beijing's Biggest Purchase Overseas Would Intensify Push Into Emerging Markets

By Jason Singer in London and Jason Dean in Beijing

762 words

25 May 2006

The Wall Street Journal

J

A3

English

(Copyright (c) 2006, Dow Jones & Company, Inc.)
China Mobile Communications Corp. is near a $5.3 billion pact to acquire Millicom International Cellular SA of Luxembourg, operator of mobile-telephone services in many of the world's poorest nations, in a move that would expand China's influence into international telecommunications, especially in emerging markets.
The expected deal -- the biggest overseas acquisition by a Chinese company -- could also have a ripple effect on Chinese suppliers of telecom equipment and mobile handsets such as Huawei Technologies Co. and ZTE Corp. China Mobile is expected to upgrade the network of Millicom, which operates in 16 countries.
Gao Songge, deputy director of the General Department of China Mobile, said that "the talks are still going on. . . . There's no news for disclosure for now." A spokesman for Millicom declined to comment.
The deal, which could be signed within days, is the latest sign of Chinese companies' ambitions in snapping up international assets. After watching Western companies invest billions in their home market, Chinese companies in recent years have been looking at purchases abroad, most notably with Lenovo Group Ltd.'s purchase of the personal-computer division of International Business Machines Corp. For China's government, the expansion of Chinese companies overseas is part of a broader push to expand the country's global influence.
But Chinese oil company Cnooc Ltd. last year failed in its high-profile $18 billion bid to take over Unocal Corp. after opposition to the deal from Congress. That led to great frustration in China, and Chinese companies increasingly are looking instead toward the world's faster-growing emerging markets.
State-owned oil company CNPC International Ltd. last year paid $4 billion for Petrokazakhstan Inc., which controls oil fields in Kazakhstan. Other recent Chinese deals have been completed in Nigeria, Ecuador and Peru, and more are being sought in Russia and Sri Lanka.
China Mobile plans to leverage its access to inexpensive and plentiful engineers, designers, contractors and others needed to build new Millicom networks, or to upgrade existing networks in its far-flung locales, according to people familiar with the matter.
Emerging markets represent a particularly attractive market for telecom companies as Western markets become saturated. In many developing nations, the fixed-line infrastructure is poor and limited in its range, so cellular networks, which are cheaper to roll out than traditional lines, are used as the primary means of communication.
China Mobile has built one of the most extensive national cellular networks in the world, covering all of mainland China. With close to 265 million wireless customer accounts as of last month -- all in China -- China Mobile is by far the world's biggest wireless carrier and controls about two-thirds of the mobile market in China.
China Mobile is owned by China's government. The company owns about 75% of China Mobile (Hong Kong) Ltd., which is listed in Hong Kong and on the New York Stock Exchange.
Nasdaq-listed Millicom would be China Mobile's first overseas acquisition. China Mobile is in the final stages of inking an agreement to buy Millicom for $48 a share in cash, according to people familiar with the situation. The deal still hinges on several layers of administrative approvals in China and will be contingent on the Chinese company receiving at least 75% of Millicom's shares. Millicom's shares rose $1.24 to $45.04 in 4 p.m. Nasdaq Stock Market trading.
Millicom is about 40%-owned by Investment AB Kinnevik, a Swedish family-controlled holding company, and a private Swedish trust.
The deal would give China Mobile, which has so far operated only as a domestic company, experience owning a multinational concern. Millicom's executive team is known in the industry as a group with a particular savvy at selling cellphones and building networks in often-inhospitable environs in Asia, Africa and Central America.
Millicom reported a 16% rise in subscribers for the first quarter and a profit of $33.4 million, compared with a loss of $11.3 million a year earlier. The company, with about 10 million subscribers, said revenue rose 20% to $322 million, compared with the year-earlier period.
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Cui Rong, Evan Ramstad and Cassell Bryan-Low contributed to this article.
(See related letter: "Letters to the Editor: Chinese Wireless Purchase Would Be Good for West" -- WSJ May 30, 2006)

License this article from Dow Jones Reprint Service
Document J000000020060525e25p00038

Luxembourg mobile firm attracts Chinese suitor
By Jason Singer

865 words

25 May 2006

The Wall Street Journal Europe

WSJE

1

English

(Copyright (c) 2006, Dow Jones & Company, Inc.)
China Mobile Communications Corp. is near a $5.3 billion agreement to acquire Millicom International Cellular SA of Luxembourg, operator of mobile-telephone services in many of the world's poorest nations, in what would be the biggest overseas acquisition to date by a Chinese company.
The Chinese company is in the final stages of signing an agreement to buy Nasdaq-listed Millicom for $48 a share in cash, according to people familiar with the situation. The deal still hinges on several layers of administrative approvals in China.
The purchase of Millicom would be the first overseas acquisition by China Mobile, the world's largest cellular-phone service by number of subscribers. Spreading Beijing's commercial interests further into the world's emerging markets, the deal also would open major new markets to a host of Chinese suppliers, such as telecommunications-equipment maker Huawei Technologies Co. With China Mobile and Millicom suggesting that China Mobile's access to Chinese suppliers is one benefit of a deal, that indicates current Millicom suppliers, including Telefon AB L.M. Ericsson, could lose out on lucrative contracts in many of the world's fastest-growing mobile-phone markets. An Ericsson spokeswoman declined to comment.
Gao Songge, deputy director of China Mobile's General Department, said, "The talks are still going on . . . there's no news for disclosure for now." A Millicom spokesman declined to comment.
The potential deal also underlines China's strategy to hop-scotch wealthy nations and use its swelling financial firepower to invest directly in the world's faster-growing emerging markets. The move comes after some attempts by Chinese companies to acquire assets in wealthy nations, such as an $18 billion bid for Unocal Corp. of the U.S. last year, were blocked on political grounds.
Increasingly, Chinese state-controlled companies are buying strategic assets in developing regions. The biggest overseas acquisition for a Chinese company to date is state-controlled CNPC International Ltd.'s $4 billion deal last year for Petrokazakhstan Inc., which controls oil fields in Kazakhstan.
Other recent Chinese deals have been completed in Nigeria, Ecuador and Peru, and more are being sought in Russia and Sri Lanka. China Mobile's most recent attempt to expand overseas failed. It was one of the final three bidders for a 26% stake in Pakistan Telecommunications Co. last year, but the stake eventually went to Emirates Telecommunications Corp., or Etisalat, of the United Arab Emirates.
Millicom has 10 million subscribers in 16 countries, including El Salvador, Chad and Cambodia. The company is known for operating with limited resources, and analysts say it has lacked investment needed to expand the businesses. Millicom employs about 40 people in its Luxembourg headquarters, which is an unassuming office in the basement of a villa, with much of the group management taking place in the various regions where the company has operations.
"If you look at Millicom, it's like a plant that needs water," said John Strand, a Copenhagen-based consultant who advises telecom companies around the world. "Millicom's main problem is that investment has been quite limited; in each region they've been told to grow organically."
Millicom reported a 16% rise in subscribers for the three months ended March 31, and a profit of $33.4 million, compared with a loss of $11.3 million a year earlier. The company said revenue rose 20% to $322 million.
China Mobile is expected to keep Millicom as a separate international arm for the near future, operating with some autonomy, people close to the matter said. The deal will be contingent on the Chinese company's receiving at least 75% of Millicom's shares. In Luxembourg, an acquiring company needs to receive at least 95% of a company's shares to take it private, so it is likely Millicom would remain publicly traded. Millicom's top executives are expected to remain in their positions to manage the operations.
China Mobile intends to spend aggressively to build more-extensive networks in the African, Asian and Central American markets where Millicom has operations, using China's vast industry of low-cost suppliers, people familiar with the talks said. China Mobile has been looking to expand at the same time that cash is pouring in because the company has been adding as many as four million subscribers a month.
Millicom already has been buying more equipment and services from Chinese companies. Chinese companies sent a chartered jet filled with engineers and designers to build a network in Ghana for Millicom; Chinese companies also recently built infrastructure for third-generation mobile-phone service for Millicom in Mauritius. A private Swedish trust and Investment AB Kinnevik, a Swedish family-controlled holding company, together own about 40% of Millicom.
China Mobile several years ago passed China Telecommunications Corp. in revenue and subscribers to become the largest of the four major state-run telecom companies in China. Use of wireless technology eclipsed that of traditional fixed lines as phone service became widespread in China only during the past 10 years, decades after more-developed countries.
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Cui Rong, Evan Ramstad and Cassell Bryan-Low contributed to this article.
Document WSJE000020060525e25p0001s

WSJA(5/25) China Mobile Pursues $5.3 Billion Acquisition
886 words

24 May 2006

09:47 PM

Dow Jones Chinese Financial Wire

DJCFWE

English

Copyright (c) 2006, Dow Jones & Company, Inc.
WSJA(5/25) China