Hydro One gets new board of directors after mass resignation

Hydro One gets new board of directors after mass resignation

A new board of directors has been appointed to Hydro One Ltd. just over a month after its chief executive retired and the entire board resigned en masse.

Ten new board members were named as replacements for Hydro One’s previous 14-member board, which resigned last month.

The power utility says former CIBC executive Tom Woods will serve as the interim board chair until the new directors can convene to permanently fill the position.

The new board comes in a time of sweeping change for Hydro One.

Its chief executive Mayo Schmidt suddenly retired last month after political intervention.

He had been labelled “the six-million-dollar man” on the campaign trail by newly elected Premier Doug Ford for his hefty compensation.



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Tesla forms three-member panel to decide on any Musk proposal

Tesla forms three-member panel to decide on any Musk proposal

Tesla Inc.’s board named a special committee of three directors on Tuesday to evaluate possibly taking the electric carmaker private, although it said it had yet to see a firm offer from the company’s chief executive, Elon Musk.

The committee will be tasked with evaluating Musk’s proposal, should it materialize. The Silicon Valley billionaire last week said on Twitter he wants to take Tesla private at $420 US a share, valuing it at $72 billion US, and that funding was “secured.”

That earlier tweet triggered investor lawsuits and an investigation by the U.S. Securities and Exchange Commission into the accuracy of his statement, according to multiple media reports.

Musk on Monday gave his most detailed vision of how a take-private deal could work, but shares ended flat, indicating investor skepticism.

The shares were flat at $356.29 US on Tuesday.

Musk said Monday he had held talks with a Saudi sovereign fund on a buyout that would take Tesla off the Nasdaq exchange – an extraordinary move for what is now the United States’ most valuable automaker. Tesla has a market capitalization of $60 billion US, bigger than Detroit rivals General Motors or Ford Motor Co., who produce far more cars.

The company said in the statement the special committee has the authority to take any action on behalf of the board to evaluate and negotiate a potential transaction and alternatives to any transaction proposed by Musk.

Tuesday’s announcement means three members of Tesla’s board will now weigh whether it is advisable – or even feasible – to pursue what could be the biggest-ever go-private deal, and they are doing so before receiving a formal proposal from the CEO.

“The special committee has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction,” the company said in a public filing with U.S. securities regulators, the first it has made since Musk’s tweets last week.

Asked about the outcome of the special committee, analyst Chaim Siegel at Elazar Advisors said, “This is not easy. Anything is possible from pulling something together to nothing. I hope nothing – so the stock can trade and benefit from the earnings inflection,” he said, referring to a promise by Musk the company would turn profitable later this year.

A blogging, tweeting CEO

Musk has yet to convince Wall Street analysts and investors that he can find the billions needed to complete the deal. Tesla’s handling of Musk’s proposal and its failure to promptly file a formal disclosure, meanwhile, have raised governance concerns and sparked questions about how companies use social media.

Musk first tweeted he planned to go private and that funding was “secured” last week, sending Tesla shares soaring 11 percent, but investors have appeared skeptical about the details he has provided since.

He blogged on Monday that recent talks with a Saudi sovereign wealth fund gave him confidence funding was nailed down, but that he was still talking with the fund and other investors. He tweeted later he was working with Goldman Sachs Group Inc and Silver Lake as financial advisers, though a source said the private equity firm was working in an unpaid, informal capacity and also not discussing participating as an investor.

“Despite Elon Musk’s frustration with being a public company, I think there are more advantages to remaining public,” said CFRA analyst Efraim Levy, citing cheaper access to capital and media exposure due to interest in a public company.

Tesla said the committee consists only of independent directors: Brad Buss, Robyn Denholm and Linda Johnson Rice.

But corporate governance and shareholder voting advisers Glass Lewis and Institutional Shareholder Services said they do not consider Buss an independent director, due to his connections to a solar panel business the company bought two years ago.

Buss was chief financial officer of solar panel installer SolarCity for two years before retiring when Tesla paid $2.6 billion for the sales and installation firm in 2016. It was Tesla’s last big deal and was criticized by some on Wall Street because the company, founded by two of Musk’s cousins, had seen its business shrink before the takeover.



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Ontario’s private sector retail cannabis plan draws pot industry approval

Ontario's private sector retail cannabis plan draws pot industry approval

Several cannabis companies and business groups are applauding the Ontario government’s new plan to add private retailers to its plans for the sale of recreational pot in the province.

The new plan — which will see the province launch online cannabis sales on  October 17 — means sales at ‘bricks and mortar’ stores won’t begin until April 1, 2019. The recently elected Progressive Conservative dumped the Liberals’ plan for the province to keep on a monopoly on cannabis sales that would have seen the government operate 150 brick-and-mortar stores by 2020.

Aurora Cannabis Inc., one of the major players in Canada’s pot industry, and Alcanna Inc., which runs 229 private liquor outlets in Alberta, B.C. and Alaska, offered kudos to the province for change in how cannabis will be sold.

The two companies say they have already scouted out over 100 potential retail locations in the province. The businesses said they have a licensing deal that will allow Alcanna to open retail cannabis stores under the Aurora name once regulations permit.

“Allowing a private retail channel in Ontario for recreational cannabis is good news for industry, consumers, and taxpayers, and will go a long way to making a meaningful impact on the grey market,” Aurora CEO Terry Booth said in a statement.

Jay Wilgar, the CEO of Newstrike Brands and its subsidiary, Up Cannabis, expressed similar sentiments.

“We look forward to engaging the Ontario government on potential retail locations,” he said. “Our first priority, however, will always be to ensure we provide adult-use consumers with a safe and reliable product.”

The Cannabis Council of Canada, which represents licensed producers of medical cannabis, said shifting retail pot sales to the private sector will save taxpayers money.

“By heavily regulating and overseeing the private sector, the provincial government will create a truly competitive and inclusive landscape that will allow for law-abiding companies to more quickly replace the bad apples in the cannabis space,” said Dr. Avtar Dhillon, the chair of the board of the Cannabis Council of Canada.

The provincial government’s private sector model will be designed in consultation with stakeholders, including municipal governments, Indigenous communities, law enforcement, public health advocates, business and consumer groups.

Municipal elections coming in the fall also play a role in the timing of the launch of physical cannabis stores, as newly elected councils will be offered a one-time chance to opt out of having retail stores in their area.

Ryan Mallough, a senior policy analyst for the Canadian Federation of Independent Business, did express some disappointment that in-store cannabis sales won’t begin until next spring.

“However, in the long run, an above-ground, regulated private sector is better suited to meet customer demand and guard against an underground industry,” he said.

“We ask the government to consider setting aside licences for small, independent businesses, so they are allowed a fair chance at participating in the cannabis retail sector.”

One group not in favour of the government’s new play is the Ontario Public Service Employees Union.

“We must make the public sale of cannabis a top municipal election issue. Fight for a sensible safe plan for cannabis sales and just say no to [Ontario Premier Doug Ford’s],” OPSEU president Warren Thomas said in a release.

Investors apparently didn’t see much to cheer in the provincial government announcement. Shares of several large players in the pot sector were down Tuesday, with Canopy Growth, Aurora Cannabis and Aphria all down between five and seven per cent in late morning trading on the Toronto Stock Exchange.



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3 Canadian cities make top 10 on global ranking of most livable cities

3 Canadian cities make top 10 on global ranking of most livable cities

Three Canadian cities have placed in the top 10 of a global ranking by the Economist Intelligence Unit of the world’s most livable cities, with Vienna dethroning perennial favourite Melbourne for the first spot.

Calgary placed fourth, Vancouver was sixth and Toronto ranked seventh.

Every year, the research and analysis arm of the London-based publisher of the Economist magazine ranks 140 cities and scores them based on 30 different factors, boiled down to five categories:

  • Stability (based on local rates of crime, terrorism and military unrest). 
  • Quality of local health care.
  • Local culture and environment (everything from weather to quality of local restaurants).
  • Quality of education. 
  • Quality of infrastructure (everything from transit to electrical grids and telecommunications networks).

Melbourne was first seven years in a row before being displaced by the Austrian capital.

Vienna was perfect in every category except culture and environment, where it scored 96.3 out of 100.

The Canadian cities in the top 10 break down this way:

  • Calgary was also given perfect scores in most categories, except culture and environment, where it got a 90.
  • Vancouver scored a 95 in stability and a 92.9 in infrastructure, with a perfect score in the rest.
  • Toronto scored 89.3 in infrastructure, and 97.2 in culture and environment, earning a perfect score on the rest. 

Perfect rankings don’t imply those cities are perfect in those regards, just that they are superior compared to others in those categories.

Typically, mid-sized cities tend to do well on the rankings, while large global metropolises tend to be punished for their successes by having higher costs of living and weaker public infrastructure due to higher demand on them.

Other noted cities and their rankings include:

  • Paris: 19th.
  • Hong Kong: 35th.
  • London: 48th.
  • New York: 57th.





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Morneau to announce next step to protect steel sector

Morneau to announce next step to protect steel sector

Finance Minister Bill Morneau is in Hamilton today to announce the federal government’s next move in support of its domestic steel industry, as U.S. steel tariffs continue to disrupt global trade and divert cheap foreign steel into other markets. 

The Trump administration’s protectionist measures continue to reverberate across a global industry that was already producing too much steel. Canada wants to avoid the dumping of inexpensive imports, something that damages its domestic industry and risks jobs.

It also wants to avoid being accused of being a “back door” for cheap steel to enter the U.S. if inexpensive foreign product is imported into Canada, perhaps modified in some fashion, and then exported onwards.

CBC News will carry Morneau’s announcement live starting at 11:45 a.m. ET from Hamilton, where the minister is touring the ArcelorMittal Dofasco facility.

Morneau spoke last week and again on Monday of his government consulting with industry as it considers “safeguards,” which can take the form of either surtaxes or import quotas, or some combination of the two. Under World Trade Organization rules, countries can apply safeguard measures to protect their domestic industries only under specific circumstances.

Canada has never used the emergency measures available to it under Section 55 of the Customs Tariff Act, which provides for an inquiry by the Canadian International Trade Tribunal when “goods are being imported under such conditions as to cause or threaten serious injury to domestic producers of like or directly competitive goods.”

This spring, the tribunal determined there is a “reasonable indication” that the dumping of steel from China, South Korea and Vietnam has “caused injury or (is) threatening to cause injury to the domestic industry.”

Tough choices ahead

The decision to apply safeguards could be a difficult one for Morneau, however. If they aren’t carefully designed, they could work too well and trigger a shortage of steel available to Canadian manufacturers, disrupting more supply chains and risking more jobs.

Canadian steel shipments, along with those from fellow NAFTA partner Mexico and the European Union, were exempt at first from the 25 per cent tariff levied by the U.S. administration of Donald Trump. But by late May, that changed, and these three U.S. allies also faced the tariff.

Chronic steel overproduction has started to abate, particularly in China, the source of much of the troublesome global surplus.

The U.S. tariffs, and the retaliation that followed, has pushed steel prices upwards, causing construction industries to warn new buildings could become unaffordable.

Trump and other members of his administration have made comments suggesting the U.S. sees its steel tariffs as leverage to obtain better trade deals from its partners, including Canada and Mexico at the NAFTA table.

Canada retaliated with a 25 per cent duty on imports of steel products from the U.S., but that doesn’t apply to steel coming in from other places.

The federal government has been consulting with Canada’s steel industry on its best strategy in the face of disruptive 25 per cent steel tariffs implemented by the U.S. earlier this year. Finance Minister Bill Morneau will announce its next step in Hamilton on Tuesday morning. (Peter Power/The Canadian Press)

For its next move, Canada could mirror an approach taken by the European Union last month.

On July 18, the EU set import quotas for 23 types of steel products. In each category, a tariff of 25 per cent is applied when the volume of imports exceeds the average amount the EU imported over the last three years — meaning the extra cost for the foreign steel is triggered only when volumes suggest dumping could be underway.

The EU quota is allocated on a first come first serve basis, rather than discriminating against any individual exporting country, as required by WTO rules. 

Shutting the back door to the U.S.

The federal government has been trying to defend itself against charges that it lets too much cheap foreign steel across its borders.

In April, Prime Minister Justin Trudeau announced $30 million in increased funding to crack down on what the industry calls transshipments — when foreign steel and aluminum move through Canada and into the U.S.

The Canada Border Services Agency (CBSA) now has more power to identify and stop companies that try to avoid duties, and to investigate whether prices charged in an exporter’s home market are fair.

Canada has already launched investigations to determine whether some fabricated industrial components from China and South Korea are unfairly subsidized, and whether corrosion-resistant steel sheeting from China, India and South Korea is being illegally sold in Canada at unfairly low prices.



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Waiting to see if declines in real estate sales translate into falling prices: Don Pittis

Waiting to see if declines in real estate sales translate into falling prices: Don Pittis

The Canadian real estate industry is used to disregarding gloomy predictions.

But now, after a decade of laughing in the face of repeated false warnings that a housing slump was imminent, most Canadians affected by real estate — in other words, just about all of us — have suddenly become a little more wary.

No one disputes the meteoric rise in Canadian house prices has come to an end. The latest figures from both Vancouver and Toronto, which come out before the national data, indicate the boom is over. 

Vancouver: lowest July sales since 2000

“July’s residential housing sales in Metro Vancouver reached their lowest levels for that month since the year 2000,” said the Real Estate Board of Metro Vancouver in its August 1 release. 

In Toronto, seasonally adjusted sales and prices were up, recovering from weakness in the first two months of the year. Of course, that follows a sharp slump a year ago, when sales were down 20 per cent and prices off by about five per cent.

Canada has an enormous part of its national wealth tucked away in bricks and mortar. Construction is repeatedly a leader in providing jobs. 

That means the list of people who care about the health of the real estate business is long.

This week, there will be more clues about what comes next. 

On Wednesday, the Canadian Real Estate Association releases its monthly figures on resale homes.

Prospective buyers have told us in the past that they wouldn’t mind at all if prices fell. Activists worried about people unable to find affordable homes would feel something similar. 

Of course, people who already own a house take a different view.

For those of us expecting to stay in our homes for the long term, the absolute price at any moment doesn’t really matter, although human psychology means they feel a little better when a home nearby goes for a good price and worse when prices are falling. 

A stake in the future

Older homeowners looking to cash out take things a little more seriously. Even though prices usually bounce back after even the deepest slump, that can take years, so a bursting bubble at the wrong time could spoil retirement plans.

Those who bought recently also have a bigger stake because the mortgage represents a bigger chunk of their house. That means a combination of rising rates and sharply falling home prices could make recent buyers feel nervous, knowing that a sudden job loss or a forced move could make them swallow a big, and perhaps unsustainable, loss.

Somewhere in the middle are economists, including people like Bank of Canada governor Stephen Poloz, who are glad the market is cooling but know that a sharp fall in prices would hit the whole economy. Statistics from the U.S. following its property slump show that people continue to suffer long after a property bubble bursts — and poorer homeowners suffer the most.

There’s no immediate sign of a bubble popping. Despite weakening sales, prices continue to recover from last year’s slump.

In the country’s hottest markets, a real estate construction boom shows little sign of ending. According to the most recent release from the Toronto Real Estate Board, the industry is working hard to overcome a housing shortage. And there are indications it hopes for support from the city and the province.

“Home sales result in substantial spin-off benefits to the economy, so the positive results over the last two months are encouraging,” said the board’s president, Garry Bhaura.

There’s no immediate sign of a bubble popping. Despite weakening sales, prices continue to recover from last year’s slump. And in the country’s hottest markets, a real estate construction boom shows little sign of ending. (Lars Hagberg/Canadian Press)

“However, no one will argue that housing supply remains an issue,” he said. “The new provincial government and candidates for the upcoming municipal elections need to concentrate on policies focused on enhancing the supply of housing and reducing the upfront tax burden represented by land transfer taxes.”

One thing you can count on is that the real estate industry is always anxious to be optimistic. In Australia — a market often compared to Canada during its boom — the number of real estate agents plummeted after a recent housing downturn.

That’s why reading the hidden messages is the latest numbers is important. 

Besides the trends for sales and prices in your particular region, the sales-to-listings ratio is also a useful sign. Lots of property on the market is a sign people want to sell but may not be willing to accept a realistic, lower, market price, creating a supply overhang.

Another significant indicator — inflation — has hit a recent high in the U.S. A roaring economy there and comments from the Federal Reserve indicate there will be two more quarter-point interest rate increases in 2018. It is unusual for Canada not to follow suit after a respectable delay.

Canada has already seen strong economic indicators that could make the Bank of Canada raise interest rates at least once more this year, probably in October. Canadian inflation numbers out this Friday will be one more signal whether Poloz will need to raise rates to help keep consumer prices in check. 

Follow Don on Twitter @don_pittis





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Ontario to allow private retailers to sell cannabis, province will handle online sales

Ontario to allow private retailers to sell cannabis, province will handle online sales

Ontario’s Progressive Conservative government announced today it will allow recreational pot to be sold in retail stores while the province will handle online sales.

Minister of Finance Vic Fedeli and Attorney General Caroline Mulroney laid out the government’s plan for a hybrid system in an announcement Monday at Queen’s Park, stressing the government’s priorities would be public safety and eliminating the black market. 

“The government of Ontario will not be in the business of running physical cannabis stores,” said Fedeli. “Instead we will work with private-sector businesses to build a safe, reliable retail system that will divert sales away from the illegal market.”

Starting Oct. 17, the province will introduce a system for online sales through the Ontario Cannabis Store (OCS) to meet the federal government’s requirements that provinces be ready for retail sales by that date. The government will then launch a consultation process with the aim of introducing a private retail model by Apr. 1.

The proposal will scrap the previous Liberal government’s plan for a provincial monopoly on cannabis sales that would have seen the government operate 150 brick-and-mortar stores by 2020.

Under the new plan, the Ontario Cannabis Store will not operate any storefronts, but will provide an online channel that will include an age-verification system to ensure safe home delivery of cannabis products.

The OCS will also act as a wholesale supplier for private retailers. Fedeli said the government will propose creating an official Ontario Cannabis Retail Seal, which will help consumers identify stores where federally qualified cannabis products can be found.

“Consumers can look to this seal to confirm they are buying from a legal channel,” said Fedeli. “This is an assurance that the illegal market simply cannot match.”

Changes require new legislation

Setting up a private retail system will require changes in legislation to the Ontario Cannabis Act of 2017. 

The key elements of the act will set the legal age for the purchase of cannabis at 19, ban the use of recreational cannabis in all public places and workplaces and prohibit those under the age of 19 from possessing consuming or cultivating the drug.

The province says it plans to address illegal selling — that includes storefronts that currently operate in cities across the province. Fedeli stressed these dispensaries remain illegal.

“For those engaged in the underground [cannabis market] today, our message is simple: Stop,” said Fedeli.

Ontario’s Minister of Finance Vic Fideli and Attorney General Caroline Mulroney following an announcement on Ontario’s cannabis retail model, in Toronto on Monday. (Christopher Katsarov/Canadian Press)

He also stressed the government will take sales to underage people very seriously.

“If a private retailer is caught selling cannabis to any underage buyer, even once, their licence is done,” he said.

The full regulatory framework for the private sector model will be designed in consultation with stakeholders, including municipal governments, Indigenous communities, law enforcement, public health advocates, business and consumer groups.

The province said it will also provide $40 million over two years to help municipalities across Ontario with costs related to the legalization of cannabis. Municipalities will have the option to opt out of allowing sales in physical stores. 

Politicians, industry react

Reaction from across the political spectrum was swift.

NDP Leader Andrea Horwath said her party still believes the safest way to sell cannabis is through the public sector because LCBO staff have the training and experience to ensure socially responsible access.

She expressed her hope that the consultation process is “open, transparent and thorough” and that it includes “the voices of as many Ontarians as possible.”

Green Party Leader Mike Schreiner,​ whose party has opposed the provincial monopoly since it was introduced in September 2017 — said the PC government was right to change course. 

“I look forward to seeing how a new wave of entrepreneurs can benefit local economies from regulated, safe and controlled cannabis sales,” said Schreiner.

Toronto Mayor John Tory said he supports legalization as long as it ensures three things: that neighbourhood and family safety is ensured, that public health isn’t compromised and that it doesn’t impose additional costs on the city of Toronto.

“Finance Minister Vic Fedeli made it clear that safety is the Ontario government’s top priority when it comes to cannabis sales,” said Tory’s office in a statement. “That is absolutely Mayor Tory’s top priority and he wants to see exact details on how that safety will be ensured before supporting a private retail model.”

The Cannabis Council of Canada, an industry group, responded positively to the announcement, saying the move would save taxpayers money and and will better equip the legal industry to replace the illegal market.

“By heavily regulating and overseeing the private sector, the provincial government will create a truly competitive and inclusive landscape that will allow for law-abiding companies to more quickly replace the bad apples in the cannabis space,” said Avtar Dhillon, the Cannabis Council of Canada board chair.



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Ontario to allow private retailers to sell cannabis, province will handle online sales

Ontario to allow private retailers to sell cannabis, province will handle online sales

Ontario’s Progressive Conservative government announced today it will allow recreational pot to be sold in retail stores while the province will handle online sales.

Minister of Finance Vic Fedeli and Attorney General Caroline Mulroney laid out the government’s plan for a hybrid system in an announcement Monday at Queen’s Park. The new proposal scraps the previous Liberal government’s plan for a provincial monopoly on cannabis sales and will require changes in legislation to the Ontario Cannabis Act of 2017. 

Starting Oct. 17, the province will move to introduce a system for online sales through the Ontario Cannabis Shop (OCS), following which it will introduce a private retail model by April 1.

The Ontario Cannabis Store will not operate any storefronts, but will act as the wholesale supplier of cannabis to private retailers. 

“The government of Ontario will not be in the business of running physical cannabis stores,” Finance Minister Vic Fedeli said.

The key elements of the act will set the legal age for the purchase of cannabis at 19, ban the use of recreational cannabis in all public places and workplaces and prohibit those under the age of 19 from possessing consuming or cultivating the drug.

The province says it plans to address illegal selling — that includes storefronts that currently operate in cities across the province. That means as of Oct. 17, the only legal place to buy cannabis in Ontario will be the OCS website. 

The regulatory framework for the private sector model will be designed in consultation with stakeholders, including municipal governments, Indigenous communities, law enforcement, public health advocates, business and consumer groups.

The province said it will also provide $40 million over two years to help municipalities across Ontario with costs related to the legalization of cannabis. Municipalities will have the option to opt out of allowing sales in physical stores. 



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Bayer shares plunge after Roundup hit with $289M lawsuit over cancer link

Monsanto ordered to pay $289M US in California Roundup lawsuit over cancer claims

Bayer shares plunged as much as 14 per cent on Monday, losing about $14 billion in value, after newly acquired Monsanto was ordered to pay $289 million in damages in the first of possibly thousands of U.S. lawsuits over alleged links between a weedkiller and cancer.

After the verdict in favour of a California school groundskeeper with terminal cancer, Monsanto faces more than 5,000 similar lawsuits across the United States over claims it did not warn of the cancer risks of glyphosate-based weedkillers, including its Roundup brand.

Monsanto, bought by Bayer this year for $63 billion, said that it would appeal against the jury’s verdict in California, which is the latest episode in a long-running debate over claims that exposure to Roundup can cause cancer.

The case by plaintiff Dewayne Johnson, filed in 2016, was fast-tracked for trial due to the severity of his non-Hodgkin’s lymphoma, a cancer of the lymph system that he alleges was caused by Roundup and Ranger Pro, another Monsanto glyphosate herbicide.

“The jury’s verdict is at odds with the weight of scientific evidence, decades of real world experience and the conclusions of regulators around the world that all confirm glyphosate is safe and does not cause non-Hodgkin’s lymphoma,” Bayer said in a statement.

Having closed the Monsanto takeover, Bayer is only awaiting the approval of some final antitrust-related asset sales before folding it into its own organisation. It did not negotiate any payments from Monsanto shareholders for Roundup-related litigation. Bayer shares were on track to close at their lowest in almost five years.

Barclays analysts said Bayer was in for a “litigious headache”. “Whilst an appeal is certain and may indeed likely result in the penalty being moderated at a minimum if not reversed altogether, a large number of similar pending cases will now likely multiply.”

Berenberg analyst Alistair Campbell said resolving the issue could cost Bayer $5 billion, citing a rough estimate based on a past product liability settlements such as Merck & Co Inc’s $4.9 billion settlement over painkiller Vioxx or Bayer’s $4.2 billion total settlement over the Baycol cholesterol drug.

The controversy could also affect future revenues. Genetically modified (GM) crops that withstand glyphosate are a main source of cash for Monsanto, mainly generated in North and South America, where the technology is widely accepted. The health worries could further darken the outlook for a product category following the emergence of weeds that have grown resistant to the herbicide.

“We think the risk of withdrawal is extremely low, but if it materialised it would be a major blow to the transaction value paid for the company,” said Berenberg’s Campbell.

Discovered by the Monsanto chemist John E. Franz in 1970, patent-free glyphosate herbicides are now sold by the global crop protection industry despite the dispute over its safety.

The U.S. court ruling caught many Bayer investors off guard as no hard evidence of a causal link to cancer had been produced so far.

The World Health Organization’s (WHO) cancer arm in 2015 classified glyphosate as “probably carcinogenic to humans”, but the U.S. Environmental Protection Agency in September 2017 concluded a decades-long assessment of glyphosate risks and found the chemical was not likely carcinogenic to humans.

A Reuters report in October showed that the WHO’s cancer agency dismissed and edited findings from a draft of its review of glyphosate that were at odds with its final conclusion that the chemical probably causes cancer. In Europe, the EU Commission in December drew criticism for renewing the licence for glyphosate.

Germany and France have meanwhile taken steps to phase out use of the weedkiller.

The U.S. case may prompt some retailers to curb sales of Roundup products. Homebase, one of Britain’s largest home and garden improvement retailers, is reviewing the sale of glyphosate-containing products in the light of the juryΓÇÖs decision, a spokeswoman said.

Glyphosate-exposed stocks also plunged in Asia and particularly in Australia where a withering drought has already hit herbicide sales. Australian chemical maker Nufarm Ltd, which Macquarie Bank analysts estimate earns about a fifth of its revenue from glyphosate-based products, plunged almost 17 per cent to a more than two-year low. Its top shareholder, Japan’s Sumitomo Chemical Co Ltd , shed 3 per cent, while Australian rural services firm Elders Ltd, which retails herbicides, fell 11 per cent.



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VF Corp., following millions of consumers, will shed its denim

VF Corp., following millions of consumers, will shed its denim

The company that makes Wrangler and Lee jeans is breaking off its denim division to focus on its fast-growing outdoor and activewear business as Americans swap out jeans for yoga pants.

VF Corp. said Monday the non-denim division would include its other well-known brands, The North Face and Timberland, Altra, Icebreaker and Williamson-Dickie.

The preference toward activewear has fueled growth at companies like Lululemon, Under Armour and Nike. Retailers like The Gap and Target have hopped aboard. Even traditional jeans makers have added stretch to their denim to catch up.

Despite growing more slowly last year, activewear sales still rose at least 10 per cent for the year ended in June, according to NPD Group, a market research firm. In comparison, jeans sales climbed 4 per cent for that same period, fueled by women’s denim.

The change in what people wear is playing out every quarter at VF. In the most recent quarter, revenue from activewear surged 25 per cent and outdoor revenue rose 6 per cent. Revenue from denim increased three per cent.

VF expects six per cent to eight per cent revenue growth in its outdoor business this fiscal year and 13 per cent to 14 per cent growth in its active division. Revenue in denim is expected to be flat, VF Corp. said last month.

The yet-to-be-named outdoor and activewear division is expected to generate annual revenue of around $11 billion US. It will move from North Carolina to the Denver area in the next year.

VF said it expects the tax-free spin-off of its denim business to generate annual revenue of $2.5 billion US. The company that operates the denim and also its outlet businesses, called NewCo, will remain in Greensboro, N.C.

The separation, which needs final approval from board members, is expected to be completed in the first half of next year.

VF shares fell almost four per cent Monday to $92.63 US on the New York Stock Exchange.



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