Business this week
The saga at Valeant rumbled on. Michael Pearson decided to quit as chief executive of the troubled Canadian drugmaker. He acknowledged that the past few months, during which time the company has been criticised for introducing whopping price increases on heart medicines and has come under federal investigation for its ties to an online pharmacy, have been “difficult”. He will stay until a successor is named. The company blamed the “tone at the top of the organisation” and pressure to achieve targets as factors causing it to restate its earnings. William Ackman, an activist investor whose hedge fund owns 9% of Valeant, was appointed to the board.
IHS and Markit, two providers of market and financial data, agreed to merge in a transaction they valued at $13 billion. IHS is based in Colorado but will move to London, where Markit has its headquarters, thus allowing it to lower its corporate-tax rate considerably. It is the latest in a series of “tax inversion” deals that have attracted political controversy in America. The new IHS Markit will compete with Bloomberg and Thomson Reuters for business.
Apple went back to basics, unveiling a new iPhone, the SE, which comes with a smaller screen than the iPhone 6 and is billed by the company as the cheapest iPhone ever. Meanwhile, America's Supreme Court agreed to hear Samsung's appeal against the penalties it has incurred for copying Apple's patented designs on the iPhone.
Marriott increased its offer for Starwood Hotels to $13.6 billion in order to fend off a rival bid from Anbang, a Chinese insurance company. Starwood, which counts the Sheraton and Westin chains among its brands, accepted Marriott's new deal, which was discussed by the companies' bosses when they accompanied Barack Obama on his visit to Cuba. Starwood also announced that it had struck a deal with the Cuban government to operate hotels on the island, the first American hotelier to do so since the revolution in 1959.
The minutes from the latest meeting of the Bank of England's policy committee showed that its members think uncertainty in the markets over the outcome of the June referendum on Britain's membership of the European Union is a “significant driver” behind the fall of the pound. The central bank, which is officially neutral in the Brexit debate, said the uncertainty was also causing some businesses to delay spending decisions.
In a surprise move, Nigeria's central bank raised its benchmark interest rate by 1 percentage point, to 12%. Nigeria's currency, the naira, has been hurt by the fall in oil prices. That has helped push up inflation to 11.4%.