RIM shares dive as fee changes catch market off guard

(Reuters) – Shares of BlackBerry maker Research In Motion Ltd dropped 20 percent on Friday on fears that a new fee structure for its high-margin services segment could put pressure on the business that has set the company apart from its competitors.

The shares were still more than 80 percent above the year’s low, which was hit in September. They started to rally in November as investors began to bet that RIM’s long-awaited new BlackBerry 10 phones, to be launched in January, would turn the company around.

The services segment has long been RIM’s most profitable and accounts for about a third of total revenue. Some analysts said there was a risk that the fee changes could endanger its service ecosystem and leave the Canadian company as just another handset maker.

The fee changes, which RIM announced on Thursday after the close, overshadowed stronger-than-expected quarterly results. The company said the new pricing structure would be introduced with the BlackBerry 10 launch, expected on January 30.

RIM said some subscribers would continue to pay for enhanced services such as advanced security. But under the new structure, some other services would account for less revenue, or even none at all.

Chief Executive Thorsten Heins tried to reassure investors in a television interview with CNBC on Friday, saying RIM’s “service revenue isn’t going away”.

He added: “We’re not stopping. We’re not halting. We’re transitioning.”

Since taking over at RIM in January, Heins has focused on shrinking the company and getting it ready to introduce its new BB10 devices, which RIM says will help it claw back ground it has lost to competitors such as Apple Inc and Samsung Electronics.

But the news of the new services pricing strategy came as a shock to markets, and some analysts cut their price targets on RIM stock.

RIM will not be able to sustain profitability by relying on its hardware business alone, said National Bank Financial analyst Kris Thompson, whom Thomson Reuters StarMine has rated the top RIM analyst based on the accuracy of his estimates of the company’s earnings.

Thompson downgraded RIM’s stock to “underperform” from “sector perform” and cut his price target to $ 10 from $ 15.

Forrester Research analyst Charles Golvin said the move was likely about stabilizing market share: “At the moment, they need to stem the bleeding.”

He said the tiered pricing might line up better with RIM’s subscriber base as it expands in emerging economies.

RIM’s Nasdaq-listed shares were down 19.8 percent at $ 11.32 on Friday afternoon. The stock was down 19.6 percent to C$ 11.21 on the Toronto Stock Exchange.

COUNTDOWN TO LAUNCH

The success of the BB10 will be crucial to the future of RIM, which on Thursday posted its first-ever decline in total subscribers. Heins said on CNBC that the company expected to ship millions of the new devices.

He cautioned that this will require heavy investment, which will reduce RIM’s cash position in its fourth and first quarters from $ 2.9 billion in its fiscal third quarter. He said, however, it would not go below $ 2 billion.

Still, doubts remain about whether RIM can pull off the transformation. Needham analyst Charlie Wolf said the BB10 would have to look meaningfully superior to its competitors for RIM to stage a comeback.

Canaccord Genuity analyst Michael Walkley said it was highly unlikely that the market would support RIM’s new mobile computing ecosystem, and he remained skeptical about the company’s ability to survive on its own.

“We believe RIM will eventually need to sell the company,” said Walkley, who cut his price target on RIM shares to $ 9 from $ 10.

Baird Equity Research analysts said BB10 faced a daunting uphill battle against products from Apple, as well as those using Google Inc’s Android operating system, and, increasingly, phones with Microsoft Corp’s Windows 8 operating system.

Baird maintained its “underperform” rating on the stock, while Paradigm Capital downgraded the shares to “hold” from “buy” on uncertainty around the services revenue model.

“RIM has gone from having one major aspect of uncertainty – BlackBerry 10 adoption – to two, given an uncertain floor on services revenue,” William Blair analyst Anil Doradla said.

RIM will have to discount BB10 devices significantly to maintain demand, Bernstein analyst Pierre Ferragu said.

The BlackBerry, however, still offers the security features that helped it build its reputation with big business and government, a selling point with some key customers.

Credit Suisse maintained its “neutral” rating on the stock, but not because it expected BB10 to be a big success.

“Only the potential for an outright sale of the company or a breakup keeps us at a neutral,” Credit Suisse analysts said.

Separately on Friday, ailing Finnish mobile phone maker Nokia said it had settled its patent dispute with RIM in return for payments. Nokia did not disclose detailed terms, but said the deal included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM. [ID:nL5E8NL22K]

($ 1=$ 0.98 Canadian)

(Reporting by Chandni Doulatramani in Bangalore and Allison Martell in Toronto. Additional reporting by Sinead Carew in New York; Editing by Ted Kerr, Dale Hudson, Janet Guttsman,; Lisa Von Ahn and Peter Galloway)

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Singer Odell first male to win Brit newcomer award

LONDON (Reuters) – Singer-songwriter Tom Odell was named the Brit Awards’ tip for the top in 2013, the first male artist to receive the honor previously won by chart queens including Adele and Jessie J.

The 22-year-old, whose musical style and voice has drawn comparisons to Coldplay lead singer Chris Martin, beat London electronic duo AlunaGeorge and classically trained soul singer Laura Mvula to the Critics’ Choice Award.

Selected by a panel of music industry experts, the annual prize goes to a British artist tipped for mainstream success, and previous winners have gone on to top charts in Britain and beyond.

“Looking at the list of amazing female artists who have won the Award already, I just hope I don’t let the boys down!” Odell said in a statement.

He released his debut E.P. “Songs From Another Love” in late 2012 and followed up with a performance on the popular live music show “Later…with Jools Holland“.

Odell also appears on the BBC’s Sound of 2013 longlist and MTV’s Brand New For 2013 selection of 10 up-and-coming artists, as the music business seeks to identify the chart-toppers of tomorrow.

Many acts, including Odell, already have record deals with major labels.

(Reporting by Mike Collett-White, editing by Paul Casciato)

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Halozyme inks drug development deal with Pfizer

SAN DIEGO (AP) — Halozyme Therapeutics Inc. said Friday it has reached an agreement with Pfizer to develop injectable versions of the drugmaker’s biotech drugs.

Halozyme specializes in a recombinant hyaluronidase enzyme technology, which is designed to temporarily break down a substance in the body that forms a barrier between cells so drugs can be absorbed faster. That would allow some drugs to be delivered by an injection instead of an IV drip.

Under the terms of the agreement, Halozyme of San Diego has granted to Pfizer, based in New York, a license to develop and release up to six products using its enzyme technology. Halozyme will receive an initial payment of $ 8 million, which includes the upfront fee for exclusive licenses to two specified drugs in primary care and specialty care, and the right for Pfizer to choose up to four additional targets after additional payments.

Halozyme is entitled to additional payments of up to $ 507 million if Pfizer’s products reach certain regulatory and sales milestones. The company is also entitled to additional royalty payments on sales of the drugs.

Shares of Halozyme surged 26 percent, or $ 1.45, to $ 6.97 in midday trading Friday. Pfizer shares slipped 32 cents to $ 25.11 as the broader markets declined.

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Boehner: Still hope on cliff deal

21 December 2012 Last updated at 12:09 ET

John Boehner: “It is not the outcome I wanted, but it was the will of the House”

Republicans will keep working to avoid the so-called “fiscal cliff” of tax rises and spending cuts, House Speaker John Boehner has said.

Earlier, right-leaning Republicans rejected a plan by Mr Boehner to raise taxes on higher earners.

Mr Boehner said his party would keep working to break the deadlock but “significant spending cuts and real tax reforms” were needed.

The White House said it would work with Congress to strike a deal.

Analysts say the rejection has weakened Mr Boehner’s position in negotiations with the Obama administration.

Mr Boehner’s plan would have had little chance of passing a Senate vote, but was seen as an effort to tell the US public that the Republicans should not be blamed if a deal could not be reached ahead of the 1 January deadline.

The House is controlled by the Republicans, but the Senate is Democrat-led.

‘God only knows‘

Continue reading the main story

“Start Quote

What happens now depends on whether President Obama’s foot soldiers are as willing to play chicken with the recovery as Mr Boehner’s troops seem to be”

End Quote

At a press conference, Mr Boehner conceded the House’s failure to take up the tax bill was “not the outcome that I wanted”.

He admitted that “God only knows” how the cliff would be avoided but Republicans would keep working on a plan to protect families and small businesses.

He added: “We only run the House. Democrats continue to run Washington.”

If politicians fail to agree new fiscal rules by the end year, steep tax rises and deep spending cuts are meant to take effect automatically.

Analysts say the resulting “fiscal cliff” could take the US into recession.

Despite the failure of Mr Boehner’s proposal, major European stock markets fell, but by only about 0.5%, as most analysts had expected this to be a long drawn-out process.

The White House said President Barack Obama would work with Congress “to get this done”.

“We are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy,” it said.

Continue reading the main story

What is the fiscal cliff?

• On 1 January 2013, tax increases and huge spending cuts are due to come into force – the so-called fiscal cliff


• Deadline was put in place in 2011 to force president and Congress to agree ways to save money over the next 10 years


• Fear is that raising taxes while massively cutting spending will have huge impact on households and businesses


• Experts believe it could push the US into recession, and have a global impact on growth

The House of Representatives is not expected to meet until after Christmas, while the Senate was due to meet only briefly on Friday.

Although Mr Boehner’s proposal would have ensured a tax cut for 99.8% of Americans, it would have imposed a rise on those earning more than $ 1m (£600,000).

Mr Boehner said he had been unable to garner sufficient votes to secure passage of the bill.

Mr Obama initially sought tax rises for those earning more than $ 250,000, but later offered a compromise threshold of $ 400,000.

He also offered a change to the way Social Security cost of living adjustments are made for some recipients, cuts from government healthcare programmes and a two-year extension of the debt ceiling.

‘Non-starters’

Mr Boehner announced his bill on Tuesday, saying he would bring forward a measure that extended Bush-era tax cuts for those earning less than $ 1m per year – but would not address the automatic spending cuts.

Continue reading the main story

“Start Quote

Mr Boehner has no alternative but to return to negotiations with Obama, his moral authority shredded but his bargaining hand curiously strengthened”

End Quote

On Wednesday, the Republican leadership added a companion bill that would replace the automatic cuts with a proposal to remove cuts from defence and government operating budgets. They would be offset by reductions elsewhere in the budget.

The proposal would cut food stamps, benefits for federal workers and some social services programmes.

That bill was narrowly passed.

Senate Majority Leader Harry Reid said Mr Boehner’s plans were “non-starters in the Senate”, while White House spokesman Jay Carney called them a “multi-day exercise in futility at a time when we do not have the luxury of exercises in futility”.

Analysts have painted a grim picture of the consequences of going over the cliff, with some warning that the impact could push the US back into recession.

The Organisation for Economic Co-operation and Development (OECD) said in its latest economic outlook that the recession from the cliff could become global.

Changing taxation across the years
Tax year	1993-2000	2001	2002	2003-2008	2009-2012	2012 tax brackets	2013 scenarios
Source: Tax Foundation, IRS Tax brackets shown for unmarried individuals
President	Bill Clinton	George W Bush			Barack Obama		Tax cuts expire	Tax cuts expire for top incomes
Bottom rate	15%	15%	10%	10%	10%	Up to $ 8,700	15%	10%
			15%	15%	15%	$ 8,700-$ 35,350		15%
	28%	27.5%	27%	25%	25%	$ 35,350- $ 85,650	28%	25%
	31%	30.5%	30%	28%	28%	$ 85,650- $ 178,650	31%	28%
	36%	35.5%	35%	33%	33%	$ 178,650-$ 388,350	36%	33%
								36%
Top rate	39.6%	39.1%	38.6%	35%	35%	Over $ 388,350	39.6%	39.6%

BBC News – Business

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Wounded presage health crisis for postwar Syria

ATMEH, Syria (AP) — A baby boy joined the ranks of Syria’s tens of thousands of war wounded when a missile fired by Bashar Assad‘s air force slammed into his family home and shrapnel pierced his skull.

Four-month-old Fahed Darwish suffered brain damage and, like thousands of others seriously hurt in the civil war, he will likely need care well after the fighting is over. That’s something doctors say a post-conflict Syria won’t be able to provide.

Making things worse, there has been a sharp spike in serious injuries since the summer, when the regime began bombing rebel-held areas from the air, and doctors say a majority of the wounded they now treat are civilians.

This week, Fahed was recovering from brain surgery in an intensive care unit, his head bandaged and his body under a heavy blanket, watched over by Mariam, his distraught 22-year-old mother.

She said that after her first-born is discharged from the hospital in Atmeh, a village in an area of relative safety near the Turkish border, they will have to return to their village in a war zone in central Syria.

“We have nowhere else to go,” she said.

Even for those who have escaped direct injury, the civil war is posing a mounting health threat. Half the country’s 88 public hospitals and nearly 200 clinics have been damaged or destroyed, the World Health Organization says, leaving many without access to health care. Diabetics can’t find insulin, kidney patients can’t reach dialysis centers. Towns are running out of water-purifying materials. Many of the hundreds of thousands displaced by the fighting are exposed to the cold in tents or unheated public buildings.

“You are talking about a public health crisis on a grand scale,” said Dr. Abdalmajid Katranji, a hand and wrist surgeon from Lansing, Michigan, who regularly volunteers in Syria.

No one knows just how many people have been injured since the uprising against Assad erupted in March 2011, starting out with peaceful protests that turned into an armed insurgency in response to a violent government crackdown.

More than 43,000 have been killed in the past 21 months, said Rami Abdul-Rahman, head of the Britain-based Syrian Observatory for Human Rights, basing his count on names and details provided by activists in Syria. He said the number of wounded is so large he can only give a rough estimate, of more than 150,000.

Casualties began to rise dramatically at the start of the summer. At the time, the regime, its ground troops stretched thin, began bombing from the air to prevent opposition fighters from gaining more territory.

Seemingly random bombings have razed entire villages and neighborhoods, driving terrified civilians from their homes, with an estimated 3 million Syrians out of the country’s population of 23 million now displaced.

About 10 percent of the wounded suffer serious injuries and many of those will need long-term care and rehabilitation, said Dr. Omar Aswad of the Union of Syrian Medical Relief Organizations, an umbrella for 14 aid groups.

This includes artificial limbs and follow-up surgery. “This is of course not available and will be one of the major (health) problems in the months right after the war,” said Mago Tarzian, emergency director for the Paris-based Doctors Without Borders.

For now, aid groups are struggling to provide even emergency treatment in under-equipped clinics.

The two dozen small hospitals and field clinics in rebel-run areas of Idlib province in the north only have a few Intensive Care Unit beds between them, said Aswad. None has a CT scanner, an important diagnostic tool.

“We need generators, we need medical supplies and the most pressing is medicine,” he said.

The challenge has been compounded by new types of injuries.

The regime has begun dropping incendiary bombs that can cause severe burns, according to the New York-based Human Rights Watch, citing amateur video and witness accounts.

Ole Solvang, a researcher for the group, said he saw remnants of such a bomb on a recent Syria trip. Aswad said doctors in Idlib and nearby Aleppo province reported seeing patients with burns from such weapons.

Doctors and hospitals have also been targeted. Aswad, who fled the city of Idlib in March after regime forces entered it, said five friends in a secret association of anti-regime physicians have been arrested. Hospitals, ambulances and doctors have been attacked, Solvang said, calling it “a worrying trend that makes the medical situation even worse.”

One of the bright spots is a 50-bed emergency care clinic set up six weeks ago in a former elementary school in Atmeh.

Largely funded by a wealthy Syrian expatriate, the Orient clinic, with five ICU beds, handles some of the most serious cases in a radius of some 150 kilometers (90 miles), said its director, orthopedic surgeon Abdel Hamid Dabbak.

In the past, seriously wounded patients had to go to Turkey, risking dangerous delays at the border, he said. Now, once patients are stabilized in Atmeh, they are sent to a sister clinic across the border for follow-up care.

In Orient’s ICU, a 24-year-old rebel fighter was breathing oxygen through a mask. He had been brought in a day earlier, bleeding heavily from stomach wounds and close to death, said Dr. Maen Martini, a volunteer physician from Joliet, Illinois. After surgery, he stabilized and was taken off a respirator. A delayed crossing into Turkey would have killed him, Martini said.

The fighter’s neighbor was little Fahed, whose house had been struck by a missile on Saturday in the village of Kafr Zeita in Hama province. “The roof collapsed on us,” his mother said of the attack. “We ran out … I saw him bleeding from his head, but it was just a small cut.”

The local clinic said the injury was more serious than it seemed and the family rushed to Atmeh, more than 100 kilometers (60 miles) to the north.

Since surgery, Fahed has been nursing and has moved his arms and legs, and the doctor is hoping for a near-complete recovery.

“Clinically, he has improved dramatically,” he said.

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Acer will beat Google to market with its own $99 tablet

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Taylor Swift keeps Bruno Mars out of Billboard 200 top spot

LOS ANGELES (Reuters) – Country pop star Taylor Swift held her reign at the top of the Billboard 200 album chart on Wednesday, keeping retro-inspired R&B singer Bruno Mars‘ new album at bay.

Swift’s latest album, “Red,” released in October, held the No. 1 slot for a fifth non-consecutive week with sales of 208,000, according to figures from Nielsen SoundScan.

Mars’ second album, “Unorthodox Jukebox,” sold 192,000 copies in its opening week to take the No. 2 slot.

The album’s lead single, “Locked Out of Heaven,” stayed at the top spot on the Billboard Hot 100 chart for a second week, and is the singer’s fourth chart-topping single. It also tops the Digital Songs chart this week.

Hip hop artist The Game entered the chart at No. 6 with his fifth studio album, “Jesus Piece,” selling 86,000 copies.

Four festive albums sat in the top ten this week, with Michael Buble‘s “Christmas” at No. 3, Rod Stewart‘s “Merry Christmas Baby” at No. 5, Blake Shelton‘s “Cheers, It’s Christmas” at No. 8, and Lady Antebellum‘s “On This Winter’s Night” at No. 10.

(Reporting by Piya Sinha-Roy Editing by Jill Serjeant, Gary Hill)

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The Benghazi Report and Parents of Children With Mental Illness: Today’s Qs for O’s WH, 12/20/12

TAPPER: Has the president read the Accountability Review Board report?

CARNEY: I don’t know. I haven’t – I know he has been briefed on it. I don’t know if he’s read it word for word, but he’s a voracious reader, so he may have.

TAPPPER: The – I believe one person has resigned and three have been – stepped down from their current duties but are still State Department employees. There might – there might have been an update for that since I last read about that. Is that sufficient for the president? Is that – is that enough accountability from the Accountability Review Board?

CARNEY: I think by every measure, the report has been assessed to be – to have been sharply critical and very blunt and clear-eyed about both problems that exist, problems that need to be fixed and the need for accountability, and actions are – already have been taken, as you just – as you just noted.

TAPPER: I’m not questioning the report. I’m -

CARNEY: Well, again, I think -

TAPPER: I’m wondering: is that enough?

CARNEY: I think independent experts here, Admiral Mullen and Ambassador Pickering, oversaw a – Accountability Review Board which I think everyone is judging to have been quite – and the recommendations that they have made are being adopted in full, and there has already been, in this very short period of time, actions that demonstrate accountability is being upheld.

I don’t – I mean I haven’t had a discussion with the president, but I think he is both appreciative of Ambassador Pickering and Admiral Mullen for the service they provided to the nation here, for the depth that they delved into in this report and the seriousness of the recommendations, the speed with which they acted; and, you know, he intends to make sure that the administration, as the secretary of state has said, begins implementation of all of these recommendations before the next secretary of state takes office.

Some of this has to do – some of it will have to do with working with Congress to ensure that Congress provides the necessary funds to allow for enhanced security at our diplomatic missions around the world. So there is obviously more action that needs to be taken, but this is a very serious report and the president has indicated that he expects it to be implemented fully.

TAPPER: Again, I’m not disparaging the report. I’m just wondering if -

(Cross talk.)

CARNEY: Again, I think – I don’t have another answer for you. Four people have already, in one way or another, been held accountable, fairly senior people, so -

TAPPER: Is that sufficient for the president? That’s the only question.

CARNEY: I believe the president believes that the recommendations and the actions taken have been the right ones.

TAPPER: O.K., one other thing I wanted to ask about the mental health ramifications following Sandy Hook, and that is there have been some interesting personal stories in the media about parents – a lot of them single parents, but not exclusively – struggling with children who are mentally ill, some of them violently so, most of them not, who do not have enough help from society. They fall through some holes, some cracks in the system. I’m just wondering if the president has seen any of these, have read any of the – of the essays that have been written, and caught any of them on television, because it’s been – it’s actually been – it’s been remarkable to hear, because normally you don’t hear stories like this.

CARNEY: Well, I haven’t had that discussion with him. He is someone who reads widely, and it would surprise me if he hasn’t read or seen some of the reports that you’re talking about, probably more likely to have read rather than seen, with all due respect to the broadcast media.

But the fact is that he believes very strongly that mental health is one of the major areas that needs to be addressed as we take a kind of comprehensive approach to this problem. It’s why – setting aside the issue of gun violence – but the issue of mental health in general is extremely important to – in the president’s view, to our – what our overall approach to health care in this country ought to be, which is why, as you know, he made sure that the health care law that he passed with Congress will ensure 30 million more Americans have access to mental health services, and that will also – makes recommended mental health services available without a co-pay or a deductible – again, part of the effort here to make it clear that issues of mental health are as important, both for the individual and for the society, as issues of physical health.

So – but as it relates to the gun violence there is no question that this is something that needs more exploration and likely more action, which is why the president has taken the action that he has.

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IntercontinentalExchange buys NYSE Euronext for $8 billion

NEW YORK/LONDON (Reuters) – IntercontinentalExchange struck an $ 8.2 billion deal to buy NYSE Euronext, a combination that will propel the commodities market powerhouse into European financial futures but threaten to further reduce the clout of the New York Stock Exchange.

The deal will create a new player in global derivatives trading and clearing that would take on CME Group Inc. While the New York Stock Exchange has stood for 200 years as an iconic symbol of U.S. capitalism, it is almost an afterthought in this deal.

Atlanta-based ICE said it will try to spin off the Euronext European stock market businesses in a public offering, generating speculation it may eventually shutter the NYSE‘s trading floor, as well. Profits from stock trading have been significantly eroded by new technology and the rise of private venues run by Wall Street banks and brokers.

Analysts said the deal will give ICE a strategic boost with control of Liffe, Europe’s second-largest derivatives market, helping it compete against U.S.-based CME Group, owner of the Chicago Board of Trade. Derivatives trading remains quite profitable for the exchanges and new rules coming into play next year will dramatically expand the demand for clearing over-the-counter contracts.

Regulatory concerns sank two deals to buy NYSE Euronext last year, including a joint bid by ICE and Nasdaq OMX Group and a separate bid from German exchange Deutsche Bourse. But ICE alone has far less overlapping business and should face easy approvals, antitrust attorneys said.

The deal values each NYSE Euronext share at $ 33.12, a 28 percent premium to the stock’s closing price on Wednesday. Shareholders will have the option of accepting $ 33.12 in cash per NYSE Euronext share or 0.2581 ICE share or a mix of $ 11.27 in cash and 0.1703 ICE share, subject to a maximum cash consideration of $ 2.7 billion..

NYSE Euronext stock rose 33 percent, to $ 31.88, after the deal was announced. ICE’s shares fell as much as 4 percent before clawing back some of the losses to trade down 0.6 percent, at $ 127.60, at 01:10 p.m. ET.

ICE said it would pay an annual dividend of $ 300 million once the deal closes.

NYSE Chief Executive Duncan Niederauer called the deal a “no brainer” on a call with analysts on Thursday. Further consolidation of exchanges was “inevitable” and ICE was a “great partner,” he said, so continuing on alone did not make sense.

“We can sit here and keep slugging away and keep working hard, but the bottom line is we had not delivered, in my mind, sufficient returns to shareholders,” Niederauer said.

Before the latest ICE offer emerged, NYSE Euronext‘s shares had fallen by nearly a third since ICE and Nasdaq launched their thwarted joint bid.

The newest offer first took shape in October when ICE Chairman and Chief Executive Jeff Sprecher, a consummate deal maker, called Niederauer to consider reviving their talks without the Nasdaq involved, said one person familiar with the situation who was not authorized to speak to the press.

ICE started out as an online marketplace for energy trading before Sprecher initiated a string of acquisitions from the London-based International Petroleum Exchange in 2001, to the New York Board of Trade and, most recently, a handful of smaller deals, including a climate exchange and a stake in a Brazilian clearing house.

A tie-up with Liffe would give Sprecher a boost to trade in to interest rates, one of the world’s biggest asset classes and a particular specialty of CME. Liffe and CME have a long-time rivalry in trading of short-term interest-rate contracts, with each launching – to little effect – look-alike versions of the other’s contracts. The CME declined to comment on the proposed deal.

“ICE is after Liffe, that is the crown jewel of NYSE Euronext,” said Peter Lenardos, analyst at RBC Capital Markets. NYSE bought Euronext, including Liffe, for 8 billion euros in 2007. “Strategically it makes sense for ICE to enter the European derivatives space in a meaningful way.”

ICE’s current main operations are in energy futures trading and, it has steered clear of stocks and stock-options trading, key businesses for NYSE Euronext. So there is not much business overlap between the two groups compared with last year’s proposed takeovers.

“This deal is probably not going to generate a lot of concern from an antitrust perspective,” said Warren Rosborough, a veteran of the U.S. Justice Department’s antitrust division who is now with the law firm McDermott Will & Emery.

A small amount of competing derivatives business could be addressed with straightforward divestitures, he said. “It’s an open question about whether it will generate questions,” he said. “If there is a fix, it will be relatively easy fix.”

Sprecher, who will be chairman and CEO of the combined company, said the deal had been “well received” by regulators after he and Niederauer completed a “whirlwind tour” in the United States and Europe ahead of Thursday’s announcement. Officials at the European Commission and the U.S. Securities and Exchange Commission declined to comment.

Last year, the Justice Department blocked a $ 11 billion joint hostile bid by ICE and Nasdaq OMX on concerns the tie-up would dominate U.S. stock listings. A rival $ 9.3 billion bid by Deutsche Boerse fell afoul of European regulators.

A combined ICE-NYSE Euronext would leap-frog Deutsche Boerse to become the world’s third-largest exchange group with a combined market value of $ 15.2 billion. CME Group has a market value of $ 17.5 billion, Thomson Reuters data shows.

Hong Kong Exchanges and Clearing is the world’s largest exchange group with a market cap of $ 19.5 billion.

ICE said it expected to achieve $ 450 million in cost savings from the takeover. In the first year after the deal closes, additional earnings of 15 percent are expected.

Long-time Wall Street traders saw the potential takeover of the venerable stock exchange by a 12-year-old derivatives upstart as weighted with symbolism.

“It’s the end of an era,” said a director on the board of a rival exchange who did not have clearance to speak to the press and asked not to be named. “I think ultimately the floor will be closed, because Jeff (Sprecher) has shut every floor he’s ever had,” the person said.

The exchange was prepared to shut down the floor temporarily during superstorm Sandy and trade completely electronically, Wall Street executives said.

But one former New York Stock Exchange executive was doubtful that ICE would completely shut down the NYSE floor. “It has too strong a marketing brand associated with it to close it,” said the executive, who declined to be identified because he is not permitted to speak to the press.

Morgan Stanley was the lead financial adviser to ICE, with assistance from BMO Capital Markets Corp, Broadhaven Capital Partners, JPMorgan Chase & Co, Lazard Group LLC, Societe Generale Corporate & Investment Banking, and Wells Fargo Securities LLC. ICE legal advisers are Sullivan & Cromwell LLP and Shearman & Sterling LLP.

The principal financial advisers to NYSE Euronext are Perella Weinberg Partners and BNP Paribas. Further financial advice to NYSE Euronext is being provided by Blackstone Advisory Partners, Citigroup, Goldman Sachs & Co. and Moelis & Co. Legal advisers to NYSE Euronext are Wachtell, Lipton, Rosen & Katz, Slaughter & May, and Stibbe NV.

(Additional reporting by Luke Jeffs and David Brough in London, Jessica Toonkel, Diane Bartz and Karen Brettell in New York, Sarah N. Lynch in Washington and Ann Saphir in Chicago; writing by Carmel Crimmins and Aaron Pressman; editing by Philippa Fletcher)

Business News Headlines – Yahoo! News

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Worries grow in east Congo with fighter buildup

DAKAR, Senegal (AP) — Aid workers warned Wednesday that armed groups are setting up new front lines in and around the city of Goma in eastern Congo, where the U.N. said it now has documented at least 126 rape cases last month.

Thousands of fighters from the M23 rebel group withdrew several weeks ago from Goma, and the fighters have since taken steps toward negotiating with the Congolese government.

However, residents in Goma say M23 and other armed fighters are now positioning themselves in an around the city — including inside camps for people displaced by the violence.

The arrival of several thousand fighters within the last week is prompting fear among civilians, who already have experienced years of fighting and rebellions, said Tariq Riebl, Oxfam’s humanitarian coordinator there.

“They are very concerned — people are seeing this and they don’t know what it means,” he said. “I think what everyone is scared about is that it seems like people are ramping up, ramping up but for what purpose?”

Oxfam warns that more than 1 million people could come under attack if violence again flares in Goma, where more than 100,000 people already have fled from elsewhere in the region.

“Goma is typically the last refuge safe haven and now it’s being directly called into question. If Goma falls in a big battle, where are people going to go?” Riebl said.

“This is very, very disconcerting because you have a population of over 1 million people and if war were to break out, we’re looking at a horrific situation.”

The M23 rebel group, which is believed to be backed by neighboring Rwanda, is made up of hundreds of soldiers who deserted the Congolese army in April.

They took control of many villages and towns in the mineral-rich east over the last seven months, culminating in the seizure of Goma on Nov. 20. It took days of negotiations and intense international pressure, including from the U.N., for the thousands of fighters from M23 to finally withdraw from the regional capital.

The U.N. mission says it’s received allegations of serious rights violations, including killings and wounding of civilians, rape, looting, and forced recruitment of children, by elements of the M23 rebels in Goma and neighboring areas.

Congo’s armed forces are also blamed for a series of attacks as they fled Goma in retreat in late November.

The U.N. said Tuesday it now has been able to document at least 126 rapes during that period in the Minova area, about 60 kilometers (40 miles) south of Goma.

U.N. spokesman Martin Nesirky said that two Congolese soldiers so far have been arrested in connection with the rapes, while seven others had been implicated in looting in the area.

“The Congolese Armed Forces have started investigating those human rights violations,” he said. “The U.N. Mission is supporting the military justice procedure in conducting thorough investigations into these allegations to ensure that the perpetrators are identified and held accountable.”

Rape has long been used as a brutal weapon of war in eastern Congo, where both soldiers and various armed groups use sexual violence to intimidate, punish and control the population.

Africa News Headlines – Yahoo! News

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