Bayer asks California judge to limit evidence in another Roundup cancer trial

(Reuters) – Bayer AG unit Monsanto has asked a California judge in the litigation over its glyphosate-based weed killer Roundup allegedly causing cancer to limit evidence by splitting an upcoming trial into two phases, a request previously successful with another judge.

Monsanto in a previously unreported filing on Jan. 15 asked California Superior Court Judge Winifred Smith in Oakland to split a March trial by a California couple into two phases.

Such a step would limit evidence the plaintiffs in the litigation consider crucial to their cases and describe as critical to a jury last year awarding $289 million in a similar case.

Under the company’s proposal, lawyers for Alva and Alberta Pilliod in the initial trial phase would be barred from introducing evidence that the company allegedly attempted to influence regulators and manipulate public opinion.

Such evidence would be allowed only if glyphosate was found to have caused the Pilliods’ cancer and the trial proceeded to a second phase to determine the company’s liability.

A hearing on the issue is scheduled for Feb. 8.

“This court need only look across the Bay to determine whether (splitting up the trial) is appropriate for a Roundup/glyphosate trial,” the company said in the filing.

U.S. District Judge Vince Chhabria in San Francisco, who oversees the federal Roundup litigation with some 680 cases pending before him, on Jan. 3 approved the company’s request to initially limit evidence in upcoming trials before him.

Following Chhabria’s decision, Bayer’s shares rose more than 6 percent.

Lawyers for the Pilliods on Tuesday declined to comment, saying they would file their response with the court on Jan. 28.

In front of Chhabria, the attorneys said their scientific evidence allegedly showing glyphosate causes cancer was inextricably linked to Monsanto’s alleged wrongful conduct.

The lawyers contended that such evidence, including internal Monsanto documents, showed the company’s misconduct and was critical to California state court jury’s August 2018 decision to award $289 million in a similar case.

The verdict sent Bayer shares tumbling though the award was later reduced to $78 million and is under appeal.

Bayer denies allegations that glyphosate causes cancer, saying decades of independent studies have shown the world’s most widely-used weed killer to be safe for human use.

But the company faces more than 9,300 U.S. lawsuits over Roundup’s safety in state and federal courts across the country.

The Pilliods’ case is scheduled to go to trial on March 18. The couple, who are in their 70s, allege their regular use of Roundup between 1975 and 2011 caused them to develop non-Hodgkin lymphoma, a cancer of the lymph system.

Reporting by Tina Bellon; Editing by James Dalgleish

Cloud, services fuel IBM’s profit beat, robust outlook; shares jump

(Reuters) – IBM Corp (IBM.N) beat Wall Street quarterly earnings estimates and also forecast 2019 profit above expectations on Tuesday, in the latest indication that Chief Executive Officer Ginni Rometty’s efforts to turn around the technology services company were gaining traction.

Shares rose 7 percent in extended trading after IBM also posted its first annual revenue growth since 2011.

Rometty, who has been CEO since 2012, has steered the company toward faster-growing segments such as cloud, software and services and away from traditional hardware products, but not without a bumpy journey. The newer areas of focus have sometimes underwhelmed investors.

Chief Financial Officer James Kavanaugh told Reuters that IBM signed roughly $16 billion worth of contracts in the quarter, its strongest by that measure in a long time.

Underscoring the drive into higher-margin businesses, IBM in October agreed to buy software company Red Hat Inc (RHT.N) for $34 billion, the company’s biggest acquisition in its more than 100-year history.

In a nod to investor concerns, Kavanaugh on a post-earnings call with analysts said client response to the Red Hat acquisition has been “overwhelmingly positive.”

IBM’s cloud strategy has focused on helping companies stitch together multiple cloud platforms rather than compete head on with “hyperscale” cloud providers such as Amazon Web Services (AMZN.O), Microsoft Azure (MSFT.O) and Alphabet Inc’s Google (GOOGL.O).

IBM’s cloud business overall grew 12 percent to $19.2 billion in 2018. It is one area IBM has actively looked to build and part of its “Strategic Imperatives,” which also include analytics, cybersecurity and artificial intelligence.

The core cloud businesses performed “quite well” in the quarter and is consistent with an overall view that enterprises are increasingly moving into the full-scale cloud migration, MoffettNathanson analyst Lisa Ellis said.

IBM said its gross profit margin, another closely monitored metric, expanded to 49.1 percent compared with 49 percent a year ago and it expects to build on that momentum in 2019.

The company forecast adjusted operating earnings for 2019 to be “at least” $13.90 per share, while analysts on average were expecting $13.79, according to IBES data from Refinitiv.

IBM projected 2019 free cash flow of about $12 billion, the same range it set for 2018, while Wall Street on average expects $12.67 billion.

IBM said revenue slipped to $21.76 billion in the three months ended Dec. 31, but came in above analysts’ average estimate of $21.71 billion.

The strengthening of the dollar cost over $2 billion of revenue in 2018, Kavanaugh said. Armonk, New York-based IBM gets over 60 percent of its revenue from outside the United States.

The company’s cognitive software business, which houses artificial intelligence platform Watson, analytics and cybersecurity services, reported sales of $5.46 billion, compared with analysts’ expectation of $5.25 billion.

IBM’s revenue of $4.32 billion from its global businesses services segment also beat estimates of $4.15 billion.

Excluding special items, the company earned $4.87 per share, above expectations of $4.82.

Reporting by Pushkala Aripaka, Sayanti Chakraborty and Shanti S Nair in Bengaluru; Editing by Sriraj Kalluvila and Leslie Adler

Trump won’t soften hardline on China to make trade deal: advisers

WASHINGTON (Reuters) – As much as U.S. President Donald Trump wants to boost markets through a trade pact with China, he will not soften his position that Beijing must make real structural reforms, including how it handles intellectual property, to reach a deal, advisers say.

Offering to buy more American goods is unlikely by itself to overcome an issue that has bedeviled talks between the two countries. Those talks are set to continue when Chinese Vice Premier Liu He visits Washington at the end of January.

The United States accuses China of stealing intellectual property and forcing American companies to share technology when they do business in China. Beijing denies the accusations.

With a March 1 deadline approaching to reach an agreement or risk an escalation of tariffs on another $200 billion worth of Chinese goods, the two sides are still far apart on key, structural elements critical for a deal, according to sources familiar with the talks.

“We’re not yet in a position where our concerns have been addressed sufficiently,” one U.S. official said, speaking on condition of anonymity. The official said the Trump team, led by hardline U.S. Trade Representative Robert Lighthizer, was focused on such structural issues as well as trade imbalances.

White House economic adviser Larry Kudlow told Reuters that forced technology transfers, IP theft and ownership restrictions remained a top priority for Trump.

“The president’s said many times how crucial that is, and he’s not going to back down,” Kudlow said.

Lack of progress led the Trump administration to decline an in-person meeting with a lower-level Chinese delegation for preparatory talks ahead of Liu He’s visit, a source familiar with the situation told Reuters.

The Financial Times also reported that an offer for preparatory meeting was rejected, but White House officials pushed back on the suggestion that any meeting was canceled.

“With respect, the story is not true,” Kudlow told CNBC, referring to the FT report.

“The teams remain in touch in preparation for high-level talks with Vice Premier Liu He at the end of this month,” said White House spokeswoman Lindsay Walters.

Trump and Chinese President Xi Jinping agreed on a ceasefire in their trade war at the G20 meeting in Buenos Aires last year, setting a 90-day period to discuss differences and agree a deal.

Those talks have yet to produce anything on paper.

“There’s progress in that the two sides are talking. But I look at it like this: there’s still nothing agreed on in writing,” said one source familiar with the discussions.

Trump has painted developments in the U.S.-China trade talks as largely positive, aware of the effect that the tensions have had on stock markets.

The SP 500 registered its biggest four-week percentage gain since 2011 on Friday after dropping nearly 20 percent from its record September close on Christmas Eve. The benchmark index lost ground on Tuesday after a national holiday on Monday.

“We’ve really had a very extraordinary number of meetings, and a deal could very well happen with China. It’s going very well,” Trump told reporters at the White House on Saturday.

China has offered more than $1.2 trillion in additional commitments on trade, Treasury Secretary Steve Mnuchin said last month.

That is not sufficient for Trump or his team.

“To think that this is going to end with simple ‘commitments,’ I think, is overlooking the historical experience that we’ve had,” the U.S. official said.

Chinese officials pledged to buy enough U.S. products to wipe out the U.S-China trade deficit at talks in Beijing earlier this month but also hedged its position, saying it depended on the demands of Chinese companies, said Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies.

The Chinese have indicated they feel they already addressed U.S. concerns about intellectual property rights through a new law and other actions, Kennedy said.

“These weren’t sufficient to satisfy the U.S. negotiation team. So we’ll see if the Chinese give any more on those or if they still try to focus on sweetening the purchases side, and hoping that Trump bites on the potential big numbers,” he said.

Barring progress at the end of the 90-day period, the Trump administration is scheduled to increase tariffs on $200 billion worth of Chinese goods from the current 10 percent to 25 percent.

“All I’ll say is the meetings coming up at the end of the month with Liu He are very important,” Kudlow said.

Reporting by Jeff Mason; Additional reporting by Michael Martina in Beijing and David Lawder and Chris Prentice in Washington; Editing by Sonya Hepinstall

Google, Facebook spend big on U.S. lobbying amid policy battles

SAN FRANCISCO (Reuters) – Alphabet Inc’s Google disclosed in a quarterly filing on Tuesday that it spent a company-record $21.2 million on lobbying the U.S. government in 2018, topping its previous high of $18.22 million in 2012, as the search engine operator fights wide-ranging scrutiny into its practices.

In its filing to Congress on Tuesday, Facebook Inc disclosed that it also spent more on government lobbying in 2018 than it ever had before at $12.62 million. That was up from $11.51 million a year ago, according to tracking by the nonpartisan Center for Responsive Politics.

Google’s spent $18.04 million on lobbying in 2017, according to the center’s data.

Google and Facebook declined to comment beyond their filings.

U.S. lawmakers and regulators have weighed new privacy and antitrust rules to rein in the power of large internet service providers such as Google, Facebook and Amazon.com Inc. Regulatory backlash in the United States, as well as Europe and Asia, is near the top of the list of concerns for technology investors, according to financial analysts.

Microsoft Corp spent $9.52 million on lobbying in 2018, according to its disclosure on Tuesday, up from $8.5 million in 2017 but below its $10.5 million tab in 2013.

Apple Inc spent $6.62 million last year, compared to its record of $7.15 million in 2017, according to center data going back to 1998.

Apple and Microsoft did not respond to requests to comment. A filing from Amazon was expected later on Tuesday.

Google disclosed that new discussion topics with regulators in the fourth quarter included its search technology, criminal justice reform and international tax reform. The company is perennially among the top spenders on lobbying in Washington along with a few cable operators, defense contractors and healthcare firms.

Google Chief Executive Sundar Pichai, who testified in December before a U.S. House of Representatives panel for the first time, has said the company backs the idea of national privacy legislation. But he has contested accusations of the company having a political bias in its search results and of stifling competition.

Susan Molinari, Google’s top U.S. public policy official, stepped down to take on an advisory role this month.

Facebook said discussing “election integrity” with national security officials was among its new lobbying areas in the fourth quarter. The filing said the company continued to lobby the Federal Trade Commission, which is investigating its data security practices.

Reporting by Paresh Dave; Additional reporting by Diane Bartz in Washington; Editing by Bill Berkrot and Sonya Hepinstall

U.S. will seek extradition of Huawei CFO from Canada

WASHINGTON/DAVOS, Switzerland (Reuters) – The U.S. Justice Department said on Tuesday it will pursue the extradition of the chief financial officer of China’s Huawei Technologies Co Ltd’s, arrested in Canada in December.

The United States has accused Meng Wanzhou of misrepresenting the company’s links to a firm that tried to sell equipment to Iran despite U.S. sanctions. The arrest soured ties between Canada and China, which subsequently detained two Canadians and sentenced a third to death.

The U.S. statement came a day after a report that Canada’s ambassador to the United States said his government was told Washington planned to proceed.

“We will continue to pursue the extradition of defendant Ms. Meng Wanzhou, and will meet all deadlines set by the U.S.-Canada Extradition Treaty,” Justice Department spokesman Marc Raimondi said in a statement.

“We greatly appreciate Canada’s continuing support of our mutual efforts to enforce the rule of law.”

Huawei Chairman Liang Hua told media at the World Economic Forum in Davos on Tuesday that the company was following the issue closely and wanted a quick resolution of the case, but had no direct contact with authorities.

The United States must file a formal request for extradition by Jan. 30. Once it is received, a Canadian court has 30 days to determine if there is enough supporting evidence and the Canadian justice minister must issue a formal order.

Canada has not asked the United States to drop its bid to have Huawei executive Meng Wanzhou extradited, Foreign Minister Chrystia Freeland told Bloomberg TV in an interview.

“CONTAINING” HUAWEI

Huawei, the world’s biggest producer of telecoms equipment, faces U.S.-led allegations that its devices present a national security risk. Huawei says such concerns are unfounded.

In an editorial on Wednesday, the state-run China Daily newspaper said Canada was helping the United States try to limit China’s technological advance by “containing” Huawei.

“If Canada does continue to do what is required of it by the U.S., it will certainly see its relations with China, including its trade relations, further deteriorate,” the newspaper warned.

Canada had the choice not to carry out the extradition of Meng on what were trumped-up charges, it added.

It said there was no connection between Meng’s arrest and China’s detention of two Canadians – Michael Kovrig, a diplomat on unpaid leave from the embassy in Beijing, and Michael Spavor, a consultant, on suspicion of endangering state security.

China would “respond” to U.S. actions, foreign ministry spokeswoman Hua Chunying said on Tuesday, when asked whether China would retaliate against the United States if Meng was extradited. But she did not elaborate.

In an article on Monday, a former head of Canada’s spy agency said the country should ban Huawei from supplying equipment to its 5G networks. China’s ambassador has threatened repercussions if Ottawa blocks Huawei.

“We’ve talked about it with Germany because we have a good relationship with Germany and our European partners generally, and Germany is having some deliberations of its own too,” Freeland said on Tuesday, regarding possible curbs on Huawei’s access to 5G networks.

The German government is debating whether to follow the United States and allies like Australia in restricting Huawei from accessing its next-generation mobile networks, business daily Handelsblatt said.

Huawei will allow foreign officials to visit its labs, Liang said on Tuesday.

Reporting by Karen Freifeld, Allison Martell in Toronto, Soyoung Kim and Leika Kihara in Davos, and Michael Martina in Beijing; Editing by Lisa Shumaker and Clarence Fernandez

Germany: Siemens/Alstom deal could increase competitiveness

MUNICH (Reuters) – German Economy Minister Peter Altmaier said on Monday that the aim of a planned merger of Alstom (ALSO.PA) and Siemens’ (SIEGn.DE) rail businesses was to increase competitiveness, adding that this goal was achievable.

Altmaier said he had already spoken to European Competition Commissioner Margrethe Vestager about the deal and the process on the possible merger was in a decisive phase.

People familiar with the matter told Reuters on Friday that Siemens’ and Alstom’s plan to create a European rail champion to take on a Chinese rival had failed to win over EU antitrust regulators, despite German and French backing.

Reporting by Joern Poltz; Writing by Michelle Martin; Editing by Joseph Nasr

Siemens: Key to have dialogue based on trust with EU about Alstom deal

MUNICH (Reuters) – Siemens (SIEGn.DE) Chief Executive Joe Kaeser said on Monday it was important to have a dialogue based on trust with European Competition Commissioner Margrethe Vestager about a planned merger of Siemens’ and Alstom’s (ALSO.PA) rail businesses.

France and Germany on Monday raised pressure on Vestager to approve the merger, warning that thwarting the proposed European champion would be a strategic error.

Reporting by Joern Poltz; Writing by Michelle Martin; Editing by Thomas Seythal

IMF fears trade war and weak Europe could trigger sharp global slowdown

DAVOS, Switzerland (Reuters) – The International Monetary Fund on Monday cut its world economic growth forecasts for 2019 and 2020 due to weakness in Europe and some emerging markets, and said failure to resolve trade tensions could further destabilize a slowing global economy.

In its second downgrade in three months, the global lender also cited a bigger-than-expected slowdown in China’s economy and a possible “No Deal” Brexit as risks to its outlook, saying these could worsen market turbulence in financial markets.

The IMF predicted the global economy to grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage point respectively from last October’s forecasts.

The new forecasts, released on the eve of this week’s gathering of world leaders and business executives in the Swiss ski resort of Davos, show that policymakers may need to come up with plans to deal with an end to years of solid global growth.

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde told a briefing.

“Does that mean a global recession is around the corner? No. But the risk of a sharper decline in global growth has certainly increased,” she said, urging policymakers to be ready for a “serious slowdown” by boosting their economies’ resilience to risks.

The downgrades reflected signs of weakness in Europe, with its export powerhouse Germany hurt by new fuel emission standards for cars and with Italy under market pressure due to Rome’s recent budget standoff with the European Union.

Growth in the euro zone is set to moderate from 1.8 percent in 2018 to 1.6 percent in 2019, 0.3 percentage point lower than projected three months ago, the IMF said.

The IMF also cut its 2019 growth forecast for developing countries to 4.5 percent, down 0.2 percentage point from the previous projection and a slowdown from 4.7 percent in 2018.

“Emerging market and developing economies have been tested by difficult external conditions over the past few months amid trade tensions, rising U.S. interest rates, dollar appreciation, capital outflows, and volatile oil prices,” the IMF said.

CHINA’S ECONOMY COOLS

The IMF maintained its U.S. growth projections of 2.5 percent this year and 1.8 percent in 2020, pointing to continued strength in domestic demand.

It also kept its China growth forecast at 6.2 percent in both 2019 and 2020, but said economic activity could miss expectations if trade tensions persist, even with state efforts to spur growth by boosting fiscal spending and bank lending.

“As seen in 2015–16, concerns about the health of China’s economy can trigger abrupt, wide-reaching sell-offs in financial and commodity markets that place its trading partners, commodity exporters, and other emerging markets under pressure,” the IMF said in the report.

The report came hours after data showing China’s economy cooled in the fourth quarter on faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest in nearly three decades.

“The numbers we saw for China today are completely consistent with our forecasts,” the IMF’s chief economist Gita Gopinath told the briefing, calling on Beijing to continue with efforts to rebalance its economy by reining in excessive credit growth and reforming its financial sector.

Britain is expected to achieve 1.5 percent growth this year though there is uncertainty over the projection, which is based on the assumption of an orderly exit from the EU, the IMF said.

The rare bright spot was Japan, with the IMF revising up its forecast by 0.2 percentage point to 1.1 percent this year due to an expected boost from the government’s spending measures, which aim to offset a scheduled sales-tax hike in October.

Slideshow (2 Images)

The IMF has been urging policymakers to carry out structural reforms while the global economy enjoys solid growth, with Lagarde telling them to “fix the roof while the sun is shining”. The IMF has stressed the need to address income inequality and reform the financial sector.

However, as growth momentum peaks and risks to the outlook rise, policymakers must now focus on policies to prevent further slowdowns, the IMF said.

“The main shared policy priority is for countries to resolve cooperatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers further and destabilizing an already slowing global economy,” it added.

Reporting by Leika Kihara and Silvia Aloisi; Editing by Mark Bendeich and Mark Trevelyan

France, Germany step up pressure over Alstom-Siemens deal

PARIS (Reuters) – France and Germany raised pressure on the European Union’s competition chief to approve the merger of Alstom and Siemens’ rail businesses, warning that thwarting the proposed European champion would be a strategic error.

French Finance Minister Bruno Le Maire said the French and German governments were fully behind the merger, as were Alstom (ALSO.PA) Chief Executive Henri Poupart-Lafarge and his Siemens (SIEGn.DE) counterpart Joe Kaeser.

“Refusing the merger between Alstom and Siemens would be an economic error and a political mistake,” Le Maire told journalists on Monday before a visit by EU Competition Commissioner Margrethe Vestager to Paris.

“We cannot take an industrial decision for the 21st century with the competition rules from the 20th century,” Le Maire added, reiterating a warning to Vestager about rejecting the merger.

People familiar with the matter told Reuters on Friday that Siemens’ and Alstom’s plan to create a European rail champion to take on a Chinese rival had failed to win over EU antitrust regulators, despite German and French backing.

Comments from politicians reflect a frustration that the EU’s competition laws no longer reflect modern-day geopolitical realities, and in particular the threat from China.

“We need international champions in Europe that are able to compete globally”, German Economy Minister Peter Altmaier told Reuters on the sidelines of a technology conference in Munich.

“Talks are in an important phase and we will do everything so that this project has a chance,” he added.

During her visit to Paris, Vestager refused to comment on the possible outcome of the antitrust decision due by Feb. 18, but stressed the importance of defending consumers’ interests rather than building European industrial champions.

“We’re dealing with two European champions, we’re dealing with businesses that are very big in the European marketplace and the global marketplace,” Vestager told journalists.

The French and German government have argued in favor of the merger on the grounds that it would create a European market leader capable of competing with Chinese giant CRRC (601766.SS), which currently dwarves other rivals.

Vestager said the European Commission had looked in-depth at CRRC’s position in the global market.

  • Siemens: Key to have dialogue based on trust with EU about Alstom deal
  • Germany: Siemens/Alstom deal could increase competitiveness

She added that the European antitrust enforcer would review any measures offered by the companies to ease its competition concerns, but warned it was extremely late in the process.

“Of course our phone is open, the mailbox as well, (but) when you’re this late in the procedure, you have to be very blunt in remedying concerns if you want to do that,” she said.

German conglomerate Siemens has already offered to license parts of its high-speed train business and sell parts of its signaling operations after the European Commission voiced concerns.

Reporting by Leigh Thomas, addiotnal reporting by Myriam Rivet and Julie Carriat and Doug Busvine in Munich; Editing by Keith Weir

Tesla’s Model 3 gets green light in Europe

AMSTERDAM (Reuters) – Tesla’s Model 3 has been given the green light to hit the road in Europe, clearing the final hurdle for the European introduction of the battery-powered sedan expected next month.

The Model 3 is a crucial project for Tesla as the U.S. electric vehicle maker known for its high-price luxury cars tries to reach the mass market with a more affordable option.

The cheapest version of the Model 3 is on sale from 58,800 euros ($66,800), while the most basic version of the more exclusive Model S starts around 89,000 euros.

The Model 3 meets the requirements for approval on European roads, data published on the Netherlands Vehicles Authority’s (RDW) website showed. The RDW is one of the authorities in Europe tasked with licensing vehicles and vehicle parts.

This stamp of approval comes at a pivotal time for Tesla, as it prepares for increasing competition, with established automakers planning to spend nearly $300 billion on electric vehicles and batteries in the coming years.

Tesla last week said it would cut thousands of jobs to rein in costs as it plans to increase production of lower-priced versions of the Model 3.

($1 = 0.8805 euros)

Reporting by Bart Meijer; Editing by Mark Potter