Category Archives: Companies

Alibaba & Malaysia Forming an Interesting Partnership

Last year, Alibaba founder Jack Ma and Malaysian Prime Minister Najib Razak launched an “e-hub” facility. One of their goals was to remove trade barriers for smaller locations and emerging nations. Now, Alibaba plans to set up a traffic control system that would use artificial intelligence for Kuala Lumpur. This would be their first time offering a service of this sort outside of China.

They plan to make live traffic predictions and recommendations by looking at the data they collect from video footage, traffic bureaus, public transportation systems and other locations. The technology will be integrated into 500 inner city cameras by May and Alibaba will work with the state agency Malaysia Digital Economy Corporation (MDEC) and the Kuala Lumpur city council to implement these changes.

A similar system in the Chinese city of Hagnzhou has reported traffic violations with as much as 92% accuracy, an increase in traffic speed of 15%, and an ability for emergency personnel to reach their destinations in half the previous time.

 

 

Italian Confectioner Ferrero Buys Nestle USA

Photo courtesy of Avelinak

After considering several buyers for its US chocolate business, food giant Nestle picked the Italian luxury chocolate brand, Ferrero in a deal worth about $2.5 billion. Last week it was reported that Ferrero had outbid its rival Hershey for the prize.

The deal makes Ferrero the third largest chocolate company in the US, after Mars, Inc. and Hershey. Before the buyout, Ferrero was the fifth largest confectioner, but only controlled 3% of the market. The Hershey group had 31.5% of the industry and Mars with 27.1%.

Ferrero also makes Ferrero Rocher pralines and Kinder chocolate eggs. It was founded in 1946, in the small Italian town of Alba, in Piedmont, by the grandfather of the present CEO, Giovanni Ferrero.

In 2011, after the death of his brother, Giovanni became the sole CEO of the company. Until that point the business grew solely through internal growth. After that the company started growing through acquisitions of other companies.

Its All About Trust at Essex Financial

Earning customer trust and keeping that trust is the most important commodity a financial company offers its clients. Although sorely challenged recently, Essex Financial Services, a Connecticut-based subsidiary of Essex Savings Bank, pulled through their crisis in the best possible way.

The trouble began when the founder of the firm, John Rafal, was accused of obtaining a large account by means of an illegal referral fee.  He then tried to cover up the payment, but was unsuccessful, and a government investigation ensued. Some of the firm’s top advisors left, and some customers. A strong, positive reaction was needed for the company to regain the confidence of its clients and the US Securities and Exchange Commission.

Into the fray entered Charles R. “Chuck” Cumello, Jr. Already part of Essex Financial, he was promoted to the office of chief executive and president, while Rafal, at first, remained on as vice chairman. Eventually, under pressure from the SEC, Rafal was fired and then banned from the securities industry.

“We handled it the way we should,” Cumello said in an interview this month at Essex Financial. “At the end of the day, this is a trust business; there is a right way and a wrong way. … We navigated some rough waters, but we did what we had to do.”

Essex Financial paid a fine for the unethical actions of Rafal. But to regain the trust from the firm’s clients Cumello insisted that the firm assert an uncompromising requirement of utter transparency.

One colleague, John Patrick, president and CEO of Farmington Bank, which has a marketing partnership with Essex Financial, had the following praise for Cumello:

“Chuck kept me abreast of everything,” Patrick said. “He’s done a terrific job considering the (situation) that he inherited.”

TSX Worried About Pot Companies with US Business Exposure

A ripe & healthy cannabis plant. Photo courtesy of Cannabis Training University.

The struggle over the legalization of marijuana in the United States has created a bit of uncertainty in the Toronto Stock Exchange’s relationship to US companies that produce the mind-stimulating drug.

Aphria Inc, an Ontario-based producer of marijuana says it met with representatives of the TSX a week ago to talk about the company’s exposure to US markets and the risk that exposure subjects the company to.

Vic Neufeld, CEO of Aphria, said that the company re-committed to working with the TSX as it carefully studies the developments in the United States as they happen. Earlier in October the TSX warned companies that the US federal laws take precedence over the state laws, and, at least right now, federal US law holds marijuana to be an illegal substance. The potential for economic trouble exists for companies like Aphria which have investments in Florida and Arizona, where marijuana is legal for medicinal only and recreational use, respectively.

The TSX said that companies on their exchange that do not comply with US federal law are not in compliance with their requirements to be listed on their exchange.

Neufeld said that he would like to see his company remain on the TSX, and right now has no plans to move Aphria to the more pot-friendly Canadian Securities Exchange. However, if an agreement with the TSX can’t be reached Neufeld said there are other options, such as creating a spin-off for its US business which can be listed separately on the CSX.

The Hartford Acquires Aetna’s Group Life and Disability Business.

The Hartford Financial Services Group, Inc, announced that it will buy the US Group life and disability business from the health insurance company Aetna, Inc for $1.45 billion in cash. Hartford hopes to expand its insurance division and ignite its digital technology strategy.

Hartford shares lost over 5%, falling to $53.63 after they said is would halt their existing buyback in order to pay for part of the deal with Aetna. They added that they will not be repurchasing stock next year as well.

The company said it will use $273 million from its 2017 equity buyback program to fund the deal, and will also use dividends from its holding company resources and insurance units to cover the cost of Aetna’s subsids.

“Hartford is financing the deal by dividends and clearly mentioned that it will not authorize an equity repurchase plan for 2018, driving the shares down,” said John Heagerty, Atlantic Equities analyst.

The deal will insure that Harford is the second-biggest group life and disability insurance provider in the US. They will have over 20 million customers, and the deal will also strengthen the firm’s dealings with mid-sized companies.

Aetna’s divisions will also provide Hartford with access to Aetna’s digital assets. These tools will allow Hartford to more efficiently process worker’s comp and disability claims. Aetna’s assets include an integrated absence management platform.