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AfDB Signs $38bn Investment In Africa

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The African Development Bank (AfDB) has signed $38 billion as investment commitments to projects in Africa.

The multilateral Development Finance Institution (DFI) has also stressed the need for Africa to prioritise investments in quality infrastructure; enhanced dialogue and support towards harmonising policy and regulatory frameworks; while also making investments in projects with regional footprints to make the continent the most favourable destination for Foreign Direct Investments (FDI).

According to a statement disclosed on its website at the end of its 54th annual meeting of the board of Governors of the Bank, the Governors, representing member-countries of the Bank and state participants, commended the launch of the Africa Investment Forum.

The statement added, its emergence was a unique transaction-based marketplace to attract institutional investments and global financing towards Africa.

“We encourage the Bank Group to pursue efforts towards operationalising the forum’s online platform as well as improving its efficiency and financial sustainability, which can help the Forum leverage significant new investment commitments for projects in Africa”.

The governors urged the Bank to continue to work with the African Union and the Regional Economic Communities (RECs) to fast-track Africa’s integration and economic and social transformation, particularly in view of the entry into force of the agreement establishing the African Continental Free Trade Area, which they said has the potential to increase growth, enhance competitiveness, improve the business climate, as well as ensure greater investment and development of regional and continental global value chains.

They also called on the Bank to focus on its areas of comparative advantage within the global development landscape, while exploring areas of synergies and coordination with other development partners for accelerating the implementation of its High 5 priorities and the Sustainable Development Goals in Africa as well as the objectives of the African Union Agenda 2063.

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Infineon Technologies Acquires Cypress Semiconductor With $10B Deal

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Germany’s Infineon Technologies has agreed to buy Silicon-Valley-based Cypress Semiconductor for $10 billion, or $23.85 per share, in an action that will allow Europe’s largest chipmaker to expand further into next-generation autos and internet technologies.

The deal will create the world’s No.8 chipmaker ranks as one of the biggest takeovers led by a European company this year.

Investors quickly gave the deal a negative reaction based on concerns that Infineon was paying a heavy price just as the chip business was weakening, pushing its shares 9% lower on Monday.

The pace with which finance functions are employing automation and advanced technologies is quickening. Rapidly. A new survey of senior finance executives by Grant Thornton and CFO Research revealed that, for just about every key finance discipline, the use of advanced technologies has increased dramatically in the past 12 months.

The deal would create an automotive leader with a 13% market share, coupling Infineon’s electric drivetrain management with Cypress’s connectivity in areas such as in-car entertainment. This would help the combined company to offer more complete packages for electric vehicles.

Company officials said that Infineon was among the few companies in a sector facing headwinds that could finance a deal that in more prosperous times might have been out of its reach.

Reinhard Ploss, CEO of Infineon, made the announcement announcement of the planned acquisition of Cypress “a landmark step in Infineon’s strategic development. We will strengthen and accelerate our profitable growth and put our business on a broader basis,” He said.

According to him, “This will open up additional growth potential in the automotive, industrial, and internet of things sectors. This transaction also makes our business model even more resilient. We look forward to welcoming our new colleagues from Cypress to Infineon,” Ploss said. “Together, we will continue our shared commitments to innovation and focused R&D investments to accelerate technology advancements.” He added.

The cash offer of $23.85 per share represents a 46% premium to Cypress’ share price over the last month.

Hassane El-Khoury, president and CEO of Cypress said, “The Cypress team is excited to join forces with Infineon to capitalize on the multi-billion-dollar opportunities from the massive rise in connectivity and computing requirements of the next technology waves.”

In his words, “the announcement is not only a testament to the strength of our team in delivering industry-leading solutions worldwide, but also to what can be realized from uniting our two great companies.”

“Jointly, we will enable more secure, seamless connections, and provide more complete hardware and software sets to strengthen our customers’ products and technologies in their end markets,” he said. “In addition, the strong fit of our two companies will bring enhanced opportunities for our customers and employees.”

The transaction is expected to yield $202 million in cost synergies per annum by 2022 and more than $168 billion in annual revenue synergies in the long-term.

Investors took a less favorable view of the sale, sending shares in Infineon sharply lower on fears that it was overpaying in a transaction that will be 30% financed through equity, with the rest paid for in debt and cash. Cypress shares jumped 27% to $22.74 in U.S. pre-market trading, below Infineon’s offer.

“The overall risk-reward profile of the deal is unfavorable,” Citi analysts said in a note, highlighting execution and regulatory risks, and promised long-term synergies that were hard to substantiate.

One trader speculated that Infineon could itself become a takeover target after the company twice lowered its revenue guidance this year as demand in China slowed and trade frictions escalated between the US. and China.

The closing of this deal is expected by either the end of the calendar year 2019 or by early 2020.

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Union Bank posts N18.5 billion profit for 2018

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Union Bank of Nigeria (UBN) Plc has announced that it achieved over one million active mobile users and over 400,000 active online users in 2018.

The bank’s Chief Executive Officer, Emeka Emuwa, made this known at the company’s 50th Annual General Meeting (AGM) held in Lagos.

Mr Emuwa told the shareholders that the bank during the period deepened customer acquisition which resulted in a 68 per cent growth in new-to-bank accounts.

He said the growth was achieved through improved engagement strategy, service delivery and robust digital platforms.

In his words, “We now have 4.5 million customers served across all our touch points. “Today, we have over one million active mobile users and over 400,000 active online users,” Mr Emuwa added.

He noted that increased channel activity contributed to 101 per cent increase in fees which stood at N2.2 billion in 2018 against N1.1 billion in 2017.

Mr Emuwa said the bank in the current year would prioritise customer acquisition, digital and automation, portfolio diversification and cost optimisation, among others, to drive growth and success.

He noted that the bank would continue to deepen customer acquisition and retention through product and service innovation, robust and reliable channel platforms and customer experience.

On the group’s performance for 2018 and plans for 2019, Mr Emuwa said:

“Our priorities in 2018 were three pronged; enhancing our productivity across board; tightening up our loan portfolio (especially resolving key large exposures which drove NPLs up significantly at the end of 2017); and optimising the bank’s capital and funding base.

“I am pleased to report that we made significant strides in each focus area.

“Notwithstanding a depressed economic environment and a challenging operating landscape, our efforts to optimise productivity delivered results.”

The chief executive officer said the company in 2019 would double-down on productivity efforts to deliver financial targets.

“We are harnessing synergies across our business segments to ensure we maximise opportunities across entire value chains, while centralising key business and operational functions for better efficiency, and prioritising customer experience across all our touch points,” Mr Emuwa said.

He explained that the bank was well positioned to continue executing key business priorities in 2019 and beyond following successful execution of its debut local currency bond issue to raise N13.5 billion and the tightening of loan portfolio.

It was reported that major highlights of the group’s financial performance for the financial year ended December 31, 2018 showed that profit before tax grew by 33 per cent to ₦18.5 billion from ₦13.9 billion in 2017.

Customer deposits also went up by seven per cent to N857.6 billion compared to N802.4 billion in 2017, continuing its upward trajectory since 2016; an indication of consumers’ growing confidence in the brand.

As a result of aggressive focus on recoveries, the bank’s Non-Performing Loan ratio declined to 8.1 per cent in December 2018 from 20.8 per cent as at December 2017.

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PayPal to infuse $500 million in Uber

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Online Payments Company, PayPal Holdings Inc, is set to invest $500 million in Uber Technologies Inc as the ride-hailing firm readies to unveil terms for its initial public offering recently.

PayPal to invest in Uber through a concurrent private placement at the IPO price, IFR reported on Thursday, citing sources.

A financial services component is important to Uber as it works to expand into a “superapp” of logistics and transportation services.

Superapps are applications where customers go for a range of services, such as transportation, shopping and payments. Such companies can be much more lucrative than those that offer just one core business or service.

Uber is expected to tell investors it will seek to be valued at between $80 billion and $90 billion, according to people familiar with the matter.

The valuation sought is less than the $120 billion valuation that investment bankers told Uber last year it could fetch, and closer to the $76 billion valuation it attained in its last private fundraising round last year.

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