Business

NEW YORK — BB&T and SunTrust got final approval on Tuesday for their plan to join forces, creating a regional banking giant in the industry’s largest merger since the 2008 financial crisis.

The Federal Reserves (Fed) and Federal Deposit Insurance Corporation both gave a green light allowing the midsize banks to join forces, creating the sixth largest US commercial bank.

The new entity — Truist Financial Corporation — will have combined assets of over $450 billion and deposits of over $330 billion, the Fed said.

The banks, which operate in the southeastern United States, announced the union in February, and said they plan to conclude the deal December 6 and the conversion will take two years.

The companies called it a merger of equals and said it would enable them to compete against heavyweights like Bank of America and Wells Fargo and save some $1.6 billion in administrative costs.

“We are pleased to have received regulatory approval to merge two strong companies with complementary business models and a high level of cultural alignment,” BB&T Chairman and CEO Kelly King said in a statement. “We’ll be even better together.”

As a condition of the approval, BB&T must divest 30 bank branches with more than $2.4 billion in deposits “to mitigate the competitive effects of the merger”, the Fed said in its announcement.

The Justice Department’s anti-trust division approved the merger on November 8 and required the two banks to divest 28 branches across North Carolina and Virginia.

Bank executives had touted the benefits of combining their technology budgets to boost digital banking offerings as the industry scales back retail branches in response to shifting consumer habits.

Atlanta, Georgia-based SunTrust and BB&T of Winston-Salem, North Carolina, said the combined company will be based in Charlotte, North Carolina.

BB&T will hold 57 per cent of the combined company and King will lead the combined company through September 2021, when he will become executive chairman.

SunTrust Chief Executive William Rogers Jr, who will begin as president and chief operating officer, will take over as chief executive when King steps down.

AMMAN — During a meeting with a Kuwaiti economic delegation to the Kingdom on Tuesday, Minister of Industry, Trade and Supply Tareq Hammouri highlighted the importance of economic integration between the two countries.

The minister called for effective economic partnerships between the two countries’ private sectors in various fields, according to the Jordan News Agency, Petra.

“The Jordanian and Kuwaiti governments are concerned with providing all facilitations for their countries’ private sectors to build economic partnerships, especially in the fields of investment and commerce, to serve bilateral interests and enhance benefits from the signed agreements and memoranda of understanding,” said Hammouri, highlighting “the Jordanian government’s readiness to sign any agreements with their Kuwaiti counterparts to enhance the private sector”.

The minister called on Kuwaiti businesspeople and investors to benefit from the “great” opportunities provided by the free trade agreements Jordan has signed with several countries, especially the US, Canada and the European Union. 

Hammouri encouraged Kuwaiti investors to invest in Jordan and export to “the most important international markets” through Jordan’s free trade agreements.

He also encouraged Kuwaiti businesspeople to benefit from the recently signed decision between Jordan and the EU to simplify the rules of origin, which enhances export opportunities. 

“Jordan is perfectly ready to cooperate with the Kuwaiti side to increase commerce and enhance both countries’ private sectors to build shared investment projects,” Hammouri said.

During the meeting, the ministry’s Secretary General Yousef Shamali highlighted the importance of facilitating the exchange of expertise between the two sides in all fields.

For his part, Chairman of the delegation and Director General of The Kuwaiti Public Authority for Industry Abdulkarim Taqi called for the activation of all agreements between the two countries, and commended Hammouri’s suggestions. 

Also on Tuesday, Minister of Agriculture Ibrahim Shahahdeh met with the delegates to discuss the importance of investing in Jordan’s food industry and removing hindrances to bilateral relations, according to Petra.

Meanwhile, Jordan Investment Commission (JIC) General Secretary Faridon Hartouqa met with the delegation discussing ways to increase the volume of investments and trade exchange with Kuwait.

Hartouqa briefed the gathering on a set of investment opportunities in various fields, highlighting the competitive features that have made the Kingdom a destination for investors from various countries, according to Petra.

The volume of Kuwaiti investments in the Kingdom is the highest among Arab countries, he said, voicing keenness to increase these ventures, and expressing the Kingdom's readiness to facilitate them. 

The JIC, during a promotional tour in Kuwait and Saudi Arabia, announced the opening of an office to follow up on investors’ affairs.

For his part, Taqi reiterated Jordan-Kuwait "deep ties" in various fields and lauded the JIC's services, mainly its support to Kuwaiti businesspeople in the Kingdom.

He also expressed hopes to increase the volume of Kuwaiti investments in the Kingdom, citing Jordan's strategic position in the region and the "promising" investment advantages it offers.

AMMAN — Chairman of the Arab Potash Company (APC) Jamal Saryarah received the gold medal in “Industry Stewardship” from The International Fertiliser Association (IFA), according to a company statement. 

This is a high-level prize awarded for exceptional service to the fertiliser industry in the fields of environment and safety, the statement said. 

IFA President Mostafa Terrab presented the award to the APC during an IFA strategic forum that is currently taking place in Paris.

The safety of workers and the work environment in the company takes centre stage in its list of priorities, Sarayrah said, adding that preliminary results reveal a drop in workplace injuries frequency rates to record levels.

Partnerships with the International Fertiliser Association and the Arab Fertiliser Association were an important factor for implementing best practices in safety and environment, he said. 

Maen Nsour, APC president and CEO, who was also present at the award ceremony, noted that the “human dimension is highly important” for the executive management which realises that high productivity largely depends on the safety, security and stability of its workforce in its ecology and environment. 

Recently, the APC has received the Australian Quarantine and Inspection Service certification, enabling the company to export its products to Australia after it implemented strict measures to ensure product quality and freedom from contaminants. 

AMMAN — A recent study by the government showed that having several independent commissions leads to administrative flabbiness, due to the presence of multiple references, increased expenditures and large number of employees with high ranks, Minister of State for Prime Ministry Affairs Sami Daoud said on Tuesday. 

Speaking to Al Mamlaka TV, Daoud said that the government’s main goals are to streamline its administrative capacity, organise references, improve expenditure efficiency and direct any surplus in public money towards development and employment, the Jordan News Agency, Petra, reported.

The minister noted that some commissions have five secretaries general or employees with the rank of secretary general, appointed under the law and upon the government's approval. This “contradicts good governance approaches”, he said.

He stressed that any decision to merge institutions will not affect the rights of employees and their salaries, noting that a new civil service by-law will be prepared to include all public-sector employees.

Daoud noted that some companies owned by the government will be merged due to the overlap of duties, so as to save expenses.

As for the financial impact of such procedures on the Treasury, the minister said that the government will save on privileges and travel expenses, noting that details will be provided later, since the prime minister has called on ministers and directors of independent commissions to present reports within one month.  

AMMAN — Jordan Investment Commission Chairman Khaled Wazani has announced that he will lead a team from the commission to study the prospects for establishing a national investment fund. 

Financial experts believe that, with several factors in place, the creation of the fund would be a “step in the right direction”.

Prime Minister Omar Razzaz has tasked the commission to start the review under Royal directives. 

According to economist Husam Ayesh, a national fund can be assessed on its ability to improve the economy in spite of internal and external factors.

If the fund resorts to borrowing to establish projects, the results might not be as envisioned, he added.

Factors involved in determining the utility of the fund include the source of funding, which decides how it will operate, in addition to the question of who will own the fund, the economist said.

The fund could be co-owned by the government and the private sector, or only owned by the government, he told The Jordan Times on Sunday over the phone.

Previous experiences of funds run by the government show that there is a need for “firm” measures to be taken in the interests of the Kingdom, directing the economy towards growth on the one hand and having a positive impact on the livelihood of citizens on the other, he said.

Ayesh noted that if the government's revenues increase, it will help reduce taxes and debt, and if the fund had this purpose, it would be a “step in the right direction”.

"The location of the fund's investments is important; if they are in Jordan, it could compete with the private sector and the social security fund investments in a small market... it is important to look for promising investment opportunities that the fund can be involved in," the economist said.

He continued that this leads to the question of the size of the investments the fund is designated for and which sectors it would focus on, noting that some countries utilise their investment funds in certain fields, while others invest in all sectors.

In all cases, a feasibility study for the fund should be carried out to avoid past mistakes, he said.

Ownership, location and sectors of investments and the source of funding are factors that must be made clear before envisioning a roadmap for the fund, according to the economist.

Citing past failures, economist Mazen Marji said that the new fund should be run by experts, who “can deliver results”, without relying on the money of the Social Security Corporation fund; the money that belongs to the citizens and their pensions.

Marji noted that if banks want to use their own money and that of their stakeholders, after obtaining approval, it could be a fund that brings revenues; since banks have guarantees that protect them against possible losses.  

DUBAI — Airbus signed two mammoth deals for its A320 and A350 aircraft worth $30 billion at Dubai’s air show on Monday, with Boeing managing only a $1.2 billion sale of its aircraft 737 MAX.

The deal with Turkish carrier SunExpress was “the first firm order” for the 737 MAX since it was grounded in March, a source at Boeing said.

Emirates Airline, the largest carrier in the Middle East, inked a $16 billion agreement to buy 50 Airbus 350-900 widebody aircraft, as it reorganises its fleet after cutting orders of the A380 superjumbo.

Emirates’ fleet stands at a whopping 261 large aircraft, including 113 Airbus A380 superjumbos and 158 Boeing 777 planes.

Its move earlier this year to cut 39 aircraft from its total A380 orders prompted Airbus to pull the plug on the costly plane, which airlines have struggled to fill to its capacity of 500-850 people.

At the time, Emirates said it would buy smaller A330 and A350 models instead in a deal worth $21.4 billion.

The airline said that Monday’s announcement replaces an agreement from February when Emirates had announced its intent to purchase 30 A350s and 40 A330Neos.

Sheikh Ahmed said the decision “follows a thorough review of various aircraft options and of our own fleet plans” but he did not rule out the possibility of discussions on the A-330Neos in the future.

The airline said the A350 would enable it to serve a range of new markets, including on long-haul routes up to 15 hours of flying time from its base in Dubai.

“It is very good news for Airbus,” the European aerospace giant’s CEO Guillaume Faury said at the air show, adding he was “very proud that Airbus 350 has been selected by Emirates”. 

In the second big deal of the day, Air Arabia said it would buy 120 Airbus A320s in a purchase worth $14 billion that represents a major expansion for the United Arab Emirates low-cost carrier.

Air Arabia, which currently operates 53 Airbus A320 and A321 aircraft, will triple in size after the new planes arrive from 2024, allowing it to move ahead with plans to add new routes to its network which takes in 170 destinations.

“We are glad to announce today one of the region’s largest single-aisle orders with Airbus to support our growth plans,” said CEO Adel Al Ali.

Air Arabia last month announced an agreement with Abu Dhabi-based giant Etihad Airways to launch a new low-cost airline based in the UAE capital, to be known as Air Arabia Abu Dhabi.

Boeing blues 

In a consolation prize for Boeing, Turkish carrier SunExpress said it was buying 10 Boeing 737 MAX 8 aircraft, on top of a previous order for 32 of the aircraft, in a show of support for the grounded model.

“We have full confidence that Boeing will deliver us a safe, reliable and efficient aircraft,” the airline’s CEO Jens Bischof said.

“However, it goes without saying that this requires the undisputed airworthiness of the model, granted by all relevant authorities.”

The 737 MAX has been grounded since March following the second of two crashes that left a total of 346 people dead.

The crisis is one of the most serious in Boeing’s 103-year history, and has already cost it tens of billions of dollars, amid multiple investigations by US authorities and complaints from victims’ families.

Boeing has said at the Dubai Airshow that it is working with regulators to make the necessary changes to the 737 MAX aircraft to ensure their safe return.

In more bad news for Boeing, Emirates Airline boss Sheikh Ahmed pointed to delays in the delivery of 150 Boeing 777-X, the US manufacturer’s new long-haul aircraft.

The planes were due to be delivered in June 2020, but Emirates is not expecting to receive the first batch before the second quarter of 2021, he said.

Sheikh Ahmad said he anticipates some word on the delivery date over the next few days, and quipped that there is “a lot to be said on the Boeing deal”.

PARIS — The French state has raised 1 billion euros in subscriptions from small-time investors for shares in the national lottery, which is to be privatised next week, Finance Minister Bruno Le Maire said on Sunday.

The government is selling 52 per cent of the state lottery monopoly, Francaise des Jeux (FDJ), in order to raise money for investment in innovation.

It has launched a huge marketing drive to attract as many individual French investors as possible.

Since the sale began on November 7, "there has been 1 billion euros [$1.1 billion] in subscriptions from individual shareholders", Le Maire told France's BFM news channel, calling it "an immense success for the people".

Individual shareholders, for whom a third of the shares have been reserved, have until November 19 to subscribe.

Institutional investors have until November 20, a day before FDJ is floated on the Paris stock market.

Le Maire said that small-time investors, who are being offered a 2 per cent discount, would be given priority if the shares were over-subscribed.

The government hopes the sale will rekindle demand for stocks among French savers, many of whom have stuck with ultra-safe low-interest savings accounts since the 2007-2008 financial crisis.

The shares have an indicative price of 16.50-19.90 euros, which would value FDJ at up to 3.8 billion euros.

FDJ is the successor of a national lottery founded in 1933 to help soldiers disfigured in World War I and struggling farmers.

It is the second-biggest betting company in Europe and the fourth in the world.

The state will retain a 20 per cent stake in the company.

WOLFSBURG, Germany — German car giant Volkswagen (VW) said on Friday it would plough 60 billion euros ($66 billion) by 2024 into its switch to electric, hybrid and connected vehicles, as automakers around the world rev up electrification plans.

The sum is an increase of 16 billion euros over previously-announced investments.

In a plan approved by its supervisory board, VW also said it would introduce up to 75 all-electric models and around 60 hybrid vehicles over the next decade, compared with a total of 70 across both types that were already planned.

VW is “focusing our investments on the future of mobility”, chairman Dieter Poetsch said in a statement.

“Without electric mobility, we won’t be able to win the battle against climate change,” added chief executive Herbert Diess.

The group said it was planning to sell 26 million all-electric vehicles by 2029 as well as around six million hybrid vehicles by that time, hoping they will help hit new European carbon dioxide (CO2) emissions targets.

On top of that should come around six million hybrids.

From next year, carmakers must achieve average CO2 emissions of 95 grammes per kilometre across newly-sold vehicles in the European Union, on pain of hefty fines.

“We will meet the strictest European limits from 2020,” Diess said.

VW has made a bigger bet than competitors on all-electric cars, designing a battery-powered platform known as “MEB” that will form the basis for a whole range of vehicles, beginning with the mass-market “ID.3”.

Of the 29 million electric vehicle sales, VW is targeting over the coming decade, 20 million will be from MEB-based vehicles.

VW’s strategy apes Californian electric pioneer Tesla, which announced this week it plans its first European factory for a site just outside Berlin.

At other traditional manufacturers, platforms — which include the chassis and various invisible components that are shared across different models — are set to remain flexible for different fuel options.

Meanwhile, VW will have to spend big to transform existing factories to produce electric cars — five in Germany, one in the US, one in the Czech Republic and two in China.

The group’s electric push was given fresh momentum as it attempted to turn the page on its “dieselgate” scandal, which cost it dear in both cash and reputational harm.

Legal cases grind on over VW’s admission four years ago that it illegally fitted 11 million diesel vehicles worldwide with software to make them appear less polluting.

On top of the electric push, CEO Diess said that “in light of the worsening economic situation, we are also working on increasing our productivity, our efficiency and our cost base so as to secure meeting our targets”.

VW last month said it was confident of hitting financial targets despite a lower unit sales outlook, warning that “vehicle markets will contract faster than previously anticipated in many regions”.

A global growth slowdown triggered by trade wars and Brexit uncertainty has hit the car industry particularly hard, as have the mammoth costs associated with switching to electric car production.

In recent months, the company has announced between 5,000 and 7,000 job cuts at the VW brand alone.

Meanwhile, bosses also turned their attention on Friday to struggling high-end subsidiary Audi, which reported falling sales, revenues and operating profits over the first nine months of 2019.

From April, former BMW purchasing chief and engineer Markus Duesmann will head the manufacturer with the four-ring logo, also joining the group-wide executive board.

Audi suffered more than other German manufacturers from the introduction last year of the new WLTP emissions testing standards in the European Union, which created bottlenecks in production.

It has also ramped up spending on new technologies, including battery-electric and hybrid vehicles, connectivity and autonomous driving.