>> an agreement to ease tensions in ukraine collapses as joe biden meets the leaders today. investors cheer that news and the company's latest earnings. earning breaking this hour. we will speak to the chief executive on "countdown." hello and welcome.

i am mark barton. >> a warm welcome. announce a new ceo. for more on the new leader at the second largest car company and the tough act he has to follow. here's caroline hyde. will be chief executive designate as soon as may 1. and talking over from adam mulally. years mulally's junior. some 25een at ford years.

since december 2012 he has been chief operating officer and he has shown his power to me his strength in turning around the american business. nine years ago he became head of the north american unit. it was the albatross around the making ford.i it was loss and dragging the whole company down. more than a billion dollars in terms of profit. a measure of profitability but it is so much better than the rest of its competitors. is prettyve percent stellar. already he is with running the weekly business conversation. the weekly business review. it should have been obvious that he should be the man for the job. what about following in adam mulally's footsteps? 2006 he was brought in and he

turned ford around. and a $23 billion loan. if he had not taken the loan than the company would have it -- would have been no more. still losing,s hemorrhaging money. $30 billion in lost. he has managed to make $40 billion. how will he manage to bring in .ew types of cars he was able to reward investors and started reinstating the dividend. sales are from europe. biggest carmaker in china. >> he was essentially a playing man. a turnaround specialist. people were asking what does he

know about cars? >> he knew management style and this is what is important. what make sure there is a smooth transition. making sure that mark fields has all the tools in his box. they want the right person for the job. >> we are getting some news about phillips. >> it is quite a considerable miss. we have hadorts through the first quarter. the first quarter evident, coming in at 360 million euros. the market was looking for 413.

this is approximately five percent. 2014 will be another challenging year for them. at 5.0 2 billion. the met -- the estimate was for slightly higher. three key focuses. is health care and wellness. encouraging the bailment in the order book and this is important. we are nowhere near the accelerating's ending levels. that is obviously some vision and in terms of a forward-looking statement. and near 40%.

, foreign exchange is the key message coming through. we are talking about this later. all going after these eight but >> entirels area that., that is not just it is the contractor serving -- servicing them. is services as well as manufacture. >> the phrase they use is solid-state. now with led lighting they are around a bit longer than if -- a

few seconds. i'm obliged to put 75% into the property. call philips to come around and change the bulbs? >> am looking at three variations. they're very expensive. >> thank you. >> this will be tricky. >> we will get inside from the top man. joining us in about 20 minutes time. do not miss that interview on "countdown." >> joe biden is meeting with ukraine's government. us now with more. good to see you. i went back talking about sanctions? >> we're back on sanctions

watch. there will be consequences in a conversation he had yesterday with the russian foreign minister if russia does not take action in these next pivotal days. another u.s. official saying sanctions could come in days, not weeks. a also get a sanction -- sense of what the sanctions might look like from another official. this would be of the personal nature affecting so-called cronies. on thursday afternoon when we got this geneva accord we heard the u.s. secretary of state saying if russia does not take action of the weekend there will be more sanctions. and now the weekend is over and we're hearing days, not weeks. how -- when it comes to , how is it?timent >> in general sentiment about ukraine and russia and the

situation has turned negative. the moscow exchange was down 1%. you have to go back to thursday morning to see that kind of pessimism. that was ahead of the accord that was reached in geneva when the russian president was talking about new russian saying these part of the country, the south part of the country was part of imperial russia. which to a lot of people sounded like he was giving some kind of justification for another annexation. that sent the market south but we had the accord and markets got a nice bounce. we have seen a little bit of a drop in the yields on u.s. bonds because they were not that many options for a flight to safety. investors saying they are playing the geopolitical uncertainty of ukraine. we have the s&p 500 facing the longest rally.

where are we on the geneva accord? >> it is confusing. the buildings that were seized in the east of the country have not been vacated as they were supposed to. that is where the so-called pro-russia militia is. they have not left the building. >> they say they are not bound by the geneva accord. >> they can say they are not involved, they do not have any citizens. so how can they influence things? at the same time you have the rushes -- russians accused the ukrainian government. so on both counts they can complain that they have not done enough. in addition you had the suspicious killing of three pro-russia activists at a checkpoint over the weekend. russia said this was the right

sector guys. ukraine said that was russia killing their own rule-russia activists to create a pretext for invasion. >> thank you. >> big news crossing the terminal. portfolioficant summation as this is worth mentioning. buying glaxosmithkline's oncology unit. early will by the animal health division of novartis for $5.4 billion. novartis will be focusing on its three key divisions which are pharmaceuticals, i care, and genetics. part of that, too massive deals are taking place. the big announcement is novartis agreeing to buy the oncology unit for as much as $16 billion.

novartis and glaxo are combining the over-the-counter division. some massive deals taking place within the drug making industry today. we will keep on top of that throughout this morning's show. cheering.rs are more on that story and the latest earnings from the company that popularized binge watching. underthe geneva accord is fighting words, our investors caught in the middle? ♪

>> time for the days company news. teaming up to bid for allergan. pershing square, the fund run by bill ackman have been bidding for allergan. and holding formal and is

continued talks to buy astrazeneca. there are no plans to resume them. deposition would be among the revived.ver if tessa is looking to build cars in china in the next two to four years. the ceo said the company is building a big network of battery charging stations in china. the news comes as elon musk prepares to deliver the model s and the country. >> time in london 6:16 a.m. joe biden is in ukraine this week after a weekend of increased violence following the death of three oh-russian activists. -- pro-russian activists. good morning, thanks for joining us. is seeminglycord

agile. markets are for the moment shrugging off ears. didn't have the capability to rattled global markets? >> it has the ability. there is too much economically andtake for the west europe and the states to be too aggressive. ed the west'son resolve to follow through. would shoot themselves in the foot. >> especially the eu, getting their source of gas supplies through russia and ukraine. the markets. upset means we will not get a

russian incursion into eastern ukraine. you do not think we will get military intervention? do not think so. i am no expert but i suspect pointed outnomist on friday, it would be easy to make that incursion and maybe to take over the territory but retain control would be a difficult thing. and it would be a growing cost to the russian economy. an outflow of capital, etc. that would continue. >> away from the ukraine story, what is driving markets for you, it is it central banks are the earnings season? more central bank season. this reaction function of the fed. we are trying to anything changed,

has the arrival of janet yellen really changed manners -- matt ers? the underlying question remains how much slack is there in the economy? encouraging initial claims figures on thursday. also continuing claims falling again. >> you think that bodes pretty well for the next jobs report. >> indeed. that was the initial claims related to the week from which the harris survey is calculating the unemployment rate. 312,000. last week to the previous month's survey. it could take two years

janet yellen said last week for the fed to reject unemployment. that does not mean it will be two years before we see a rate hike. how does that play into our assessment of when the first rate hike will be because investors since the last fed meeting when she applied we , theysee rates raise pushed forward that rate hike expectations but they have come back a bit. >> a little bit. the force of the good figures we have seen almost continuously over the last two weeks have taken us almost back to those levels. plus the six month gap. we are getting back there and will continue. the uses of for guidance which is the psychological effect area the rates will stay low. she is trying to wring as much out of that. we will watch for subtle changes in the language of the second

half of this year. >> thanks. we will have more details on the outlook for the u.k. economy when we come back. reiterate. buy -- theyreed to healthling their animal operations at eli lilly. a massive overhaul for the swiss drug maker >> we will take a short break here on "countdown." see you on the other side. ♪

>> welcome back. >> the time in london is 6:24 a.m. u.k. lastnt in the week falling below 7%. it would have insignificant if the bank of england had a clear target in mind. where do you see rates going, will they go up this near -- year or next? few meetings will become increasingly interesting. they will be privy to the may

inflation report. the key chart to look at will be the bank's expectations were the inflation wille be in two years time. given the current market rate. will significantly increase speculation about the rate rise. >> the rate rise possibly by the end of the year. what about the eurozone? you have some crucial pmi manufacturing data tomorrow. confidence data on thursday. the euro is remaining stubbornly high. >> to the disappointment of companies like phillips. >> it was interesting. the last ecb conference where mario draghi brought up the subject of the euro very are early -- early on in the conference. -- this is not a target

for us, it is a consideration but he brought it up early and it is front of mine for the ecb. every chance that maybe not in may, maybe in june we see a cut and the deposit rate. >> does that send the euro lower? >> that is one of the reason why that is the favored tool of choice for easing the ecb. than fullyversial fledged qe which i suspect we will get to later in the year. deposit rate.he >> you expect a continued slowdown but no crisis. >> i do not think so. we are seeing more and more vestiges of the fact that if you feel like turning to perhaps a good old capitalist solution to the property problem. if there is a property problem. this is largely centered in the major cities.

more and more. >> thank you very much. joining us to discuss phillips latest earnings. right after the break here on "countdown." ♪

>> welcome back. >> let's get to jonathan ferro. >> we will look at the dollar yen. hitting 110 by the end of the year. can japan hit that inflation target of 2%. import prices and higher energy costs and the yen is weakening. that will start falling out of the year in your calculation for

inflation. will the bank of japan have to do more? the overwhelming consensus is yes. joining us now from amsterdam is the chief executive. good morning and thank you for joining us. rex good morning. to fxit just down movement or is it something more sinister? certainly fx movements have a big impact. we saw 500 basis winds. and we work hard to offset that but we did not fully make that. improveble to profitability further but in health care we had a temporary factory shut down to do with an altogether they resorted in a

decrease of profitability. headwindsrkets we saw and china was slower. altogether it was not an easy quarter. and a market full of headwinds. >> can you elaborate on those comments you made on china and russia? any concerned about the china slowdown. others worried about events in ukraine and the impact on the russian economy. seeyou elaborate on how you the ongoing macroeconomic picture in china and russia. and how that will affect phillips. >> sure. in china we saw the economy continued to slow down. inecially it is noticeable markets. the consumer market is going strong.

this is a hot roddick in much demand. russia, there we see across the board a reduction in demand. of course further aggravated by the fall of the ruble. that is where we see a double whammy. and then some smaller markets whether it is argentina or southeast -- south asian markets. due to the volatility of currencies we also see governments being very careful with big project orders, for example health care. >> do you think we have seen the worst of these fx movements, do you think the impact will decrease as the year progresses? isthe impact of currencies having -- is stronger now than some of -- as some of the hedging runs out.

on a comparable basis the effect becomes smaller. whatu were talking about mario draghi will do, the euro is a bit too expensive. the longer-term we are optimistic about our opportunities. phillips is well-positioned with regard to mega trends and we see the aging and growing population that needs more health care. roade minister pahlavi's, operators, building operators are looking for led lighting. we grew our is this by 37% in the quarter. just underlining how much potential that technology has. we remain fully committed to our 2016 financial targets. >> many of our viewers will be aware that you are awarding these contracts to install complex lighting systems. you won this contract in washington in november.

how big is this market, how much of a slice of this market cam phillips attain? -- ken phillips attain? -- 60% hisn 60 business-to-business and business to government. the contract size is rising as we engage with customers on long-term projects in health care and lighting. these lighting projects where we help cities and road operators 80% are-- 70% to fantastic. they come with business models where cities can pay as they go. basically paying out of their their save me -- savings investments in the new technologies. that is an exciting

transformation that we are happy with. >> how hard are you finding it to achieve economies of scale and to make money in this new lighting era, in this era of led lighting? that in the new technology, the profit pools will be shifting from the build to the lighting selections. we have installed a new system .ith lighting systems it is a plug-and-play where technology is built-in. where able to sell you a higher ticket item as we become the solutions partner. i find it an exciting business and i am not worried about the long-term prospects of the sliding systems business. what isou update us on

happening on the audio and video units, your -- you agree to sell it and then you said you would not sell it. offload thisre you division? >> obviously there was a disappointment. since then we have restarted the process. we see several prospective buyers create we are strongly engaged in that process that we expect this year to finalize a deal. >> coming back to the euro. standing what're is fair value for the euro would you say? that is a difficult question. i am not a macro economist. obviously by saying it i would like it to go down. let's leave it to central bankers and other financial

experts to what it should be. we do believe that it is overvalued as we stand today. >> do you think the ecb will take measures, the implied they will. do you think the ecb will take measures to drive the euro down imminently in the next month or two? business guy. i am focused on winning more hospitals as customers and winning more cities to take our lighting and seduce consumers with great health and well-being products. let me focus on that while you second-guess the european central bank. >> i always ask you about your health and well-being products and a.l. is ask you what hundred right now is capturing the public's imagination. about anothera product. you have all this about the toothbrushes, give us an idea of another product that is capturing the public's imagination. the fryer is selling so well,

we are the number one non-fat fryer brand in the world. it has taken japan by storm. a new innovation i already alluded to, people are worried about the air they breathe. the air that is often polluted in big cities in china but also in southeast asia where the smog from a forest burning is hitting singapore. we see that consumers are fed up. they are buying our air purifiers in order to read clean-air in their apartments, in their homes. recently newis a addition to the phillips stable and it has been growing very strongly. multimilliontrong business for phillips. >> always a pleasure to talk to you. we will speak to next quarter. thank you very much. >> still to come.

big moves from novartis. we have been recapping the big shakeup there saying at that business and we can tell you that the ceo will be speaking first on bloomberg coming up shortly on "countdown." ♪

>> welcome back to "countdown."

today's company news. captain america has vanquished his rivals. the film was number one for the first -- third straight weekend. the movie collected more than $200 million in u.s. sales. samsung says $2 billion for infringement claims is 57 too much. he called on a yale university business school professor to make a case to a california jury. samsung said if they have to pay anything it should be $.35 a hot -- a phone. italy's two biggest banks may announce a preliminary agreement restructuring advisor. they will pool bad loans into a

loan. ." this is "countdown channel.our free video reported first earnings ahead of expectations. a boost in after-hours trade. bidding a can lower more users with his -- its exclusive content. it is suddenly about this been chewing that we are accustomed to. thelix says it is all about content now. that is why they are able to ramp up prices. we saw shares surge being profitability targets.

they're able to squeeze more money out of each user. >> a big difference when you look at it like that. this is for unlimited web viewing. dollarsng by one to two does not seem much to the customer who is addicted to "house of cards." 25% boost that as a in pricing, they are able to ramp this up. of $20 billion. that is why we saw the shares, very volatile. about international law

as well. >> this is a company that invests in its content. , they have more than 40 million subscribers. the growth potential is in europe. they are in the netherlands and ireland and the nordic regions germany, france, that is where they're looking to invest. >> thank you. >> a big shakeup at novartis announced this morning including deals for glaxo and eli lilly. the novartis overhaul, jonathan ferro is here. tag.is a big price >> big deals this morning involving none of those companies. they always involve novartis. i will break it down for you. the oncology unit, the cancer treatment unit for $16 billion

and selling the vaccine business excluding the flow operations, that will be sold separately. at 7.1es to glaxo billion dollars. getting more money from eli lilly. buying the animal health business. perhaps the most interesting is teaming up with glaxo to formic lth sooner -- a consumer hea care business. big,unit will be pretty germany revenue of $10 billion. some pretty big steps to get rid of some of those smaller businesses and big step. for the industry as a whole, everyone is expecting more action in this industry over the next coming weeks and months. >> let's talk to the man who knows more about it than any of us. he is the ceo, joe jimenez.

to usyou for talking first. it is good tohave you here on what has to be an historic a for your company. >> yes, it really is. it is a great day for novartis as we announced the conclusion of our work folio review. >> what is most exciting to about what you are announcing today, you have given us a series of deals and focusing on eye care and pharma and generics looking ahead. where is the growth going to come from? today ise announced that we are focusing the company on our three big engines. the pharmaceutical business, the eye care business. these are three segments where we are leaders or we are in the top 1, 2, or three. they have global scale and they have great innovation power.

the transactions that we talked about are primarily on our smaller divisions. they really encompass three things with dsk. the first is we are acquiring their oncology products so this will strengthen our already world leading oncology business. secondly we are forming a joint venture by contributing our otc business together with the g is kate consumer business and we will create a powerhouse in consumer health care. the third part is we aren't investing our vaccines businesses to gs k allowing them to maximize the value and we get good value from novartis shareholders. we will also announce today that reached agreement with eli lilly to do best our animal health business, creating a very strong business for eli lilly and novartis shareholders get full value for our animal health business.

not just from a portfolio standpoint does this strengthen novartis but also from a financial standpoint. if you look at what this will did sue the company going forward it should increase our sales growth rates, our operating income growth rates and our operating income margins . >> can you give us a bit more analysis or depth on that on the financial projections. by how much will it benefit you basis andy per share when will these transactions close? we expect the transactions to go through the normal regulatory requirements and we expect them to close in the first half of 2015. when you look at what it does pro forma, we modeled 2013 in terms of what the company would look like with these transactions. we would have slightly lower sales. what is roughly $60 billion would be reduced by about $4 billion.

our operating income would go up. that is because we would be acquiring the oncology business and we would be divesting the vaccines and animal health business which are lower profit businesses. that creates operating margin improvement to the tune of over 200 basis points as soon as these heels close. >> you said they will go through the normal regulatory channels. you will be creating a powerhouse in consumer health care. do you expect either there or any other areas that are concerned here, you're going to face any challenges from regulators as a result of the move you are announcing today? obviously we have done the analysis and believe that we will be able to close the deals but it is obviously up to their regular -- the regulators around the world to ensure that these deals will be able to close but

we're fairly confident. >> you have certainly provided us with deals today. is that it now when it comes to m&a because it has been a busy week especially with that news that pfizer was in talks with astrazeneca. those talks have been discontinued according to people familiar. do you sort of these transactions or do you have further ambitions? what we have announced is going to keep us very busy for the foreseeable future. we are planning right now for integration and de-integration and that will take the next nine to 12 months. it is important that we announced today that this is the conclusion of the portfolio review we have done and announced a year ago for our

current products. that is not to say that we will not participate in m&a going forward. we have had -- said that our strategy is to add on acquisitions to our big important businesses. and that will continue. have pharmaceuticals and eyecare and generics as big, important businesses. this will help us on the m&a front if you think about both going forward. is part of this review. you have been reviewing the business. are there parts of the business as possible sales candidates and you decided to hang onto them after closer examination, did this turn out the way you expected it to? >> this turned out very consistent with what we had said

earlier. we had said about a year ago that we want to focus the company on the big important leading businesses and we were looking for ways to make our smaller divisions even more important. either internally or through partnerships like a joint venture create or if we could not then investiture is. it comes back to the health care industry. as i look at health care over the next 10 years there are going to be increased demands for health care. you have a lot more older people. there will be increased demand. governments are going to continue to look for ways to lower health care costs. you had better be one or two or three in your segments and that is what this portfolio review was about. to strengthen the novartis portfolio so that for the next 10 years we are in fighting condition and we are the health care company of choice. >> can you give us an idea of

?ho else you are talking to can you give us a sense of who to and whye talking you have chosen to work with glaxosmithkline? >> without naming any names, it because thisy that was so critical and important for novartis, we talked to virtually everyone in the industry to understand what their needs, their desires were on their side from a portfolio standpoint so that we could look at our portfolio moves and decide on the outcome will moves. i think you can tell by the structure of the deal that there were -- there was a lot of thought that went into what would be the best move for novartis at this point.

that is what we announced today. challenge the biggest for the rest of this year, is pulling these deals together, or something else entirely? >> if you look at our current business, we are going to announce our first quarter earnings on thursday of this week. this announcement comes two days before our first quarter earnings. i had given the outlook that novartis expects to grow low to mid single digit in 2014 and to grow operating in, head of sales. thinkd say that when you about the big challenge we face for the rest of the year, it will be planning for the integration of the oncology business as well as planning for the closure of the transactions on vaccines and also on animal health. that is going to keep us busy for the remainder of the year. >> thanks for chatting to us. it has been a pleasure. thanks for talking to us first on "countdown" on bloomberg

television. "countdown" continues on bloomberg. stay with us. ♪

>> novartis is buying. ?ight who will take the helm more on that exclusive coming up. >> u.s. vice president joe biden meets ukraine's leader later today. ♪ hello, welcome. i am mark barton.

>> a warm welcome. let's start with a bloomberg exclusive on the auto industry. ford is set to announce a new ceo. for more on the new leader of america's second-largest car company and the tough act he has to follow, caroline hyde is here. >> the chief operating officer for 15 years may be taking the reins. it could be announced as soon as may 1. this is a man who has ford in his blood. he has been at the company 25 years. what a tough act to follow. >> he has made his mark thomas hasn't he? >> phenomenally. the turnaround he has achieved in u.s. north american operations was really a thorn in the side of ford. he managed to turn it around to be profitable, $8 billion worth profitable.

it sees an incredible margin. if it'sit's pretty good five percent in a car company. he has driven it up to 10%. 2012 he took over as chief operating officer. he already runs the weekly business, so perhaps not that much of a shock that he is chief executive designate. he was really pulling this company back from the brink. this is something to reflect on. what a man in the respect that he flew over from boeing in 2006 and had to take some pretty almostecisions immediately. he had to sign off on a $23 billion loan. his first two years, this is a company that was still .emorrhaging money after that he managed to bring

back $40 billion in the last five years. he has reinstated dividends. he has managed to please investors. what he managed to do was manage beautifully, bringing back new cars that work for the modern generation. he has fuel-efficient models. even the luxury brand, lincoln, which still needs to be improved , is still down from its heat. this is where he wants to expand, focus on china, focus on growth potential. >> he wouldn't focus on cars for specific markets. he wanted to sell cars right across the world. >> and he collaborated. mark firstwas one of the lieutenants who really got on board with this. stop infighting and start playing as a team, and that's

what they have got. >> i have decided what industry he is going to go into next. >> ?as the approached you >> i know what he is going to go in next. it to train industry. -- it is the train industry. planes, trains, and automobiles. >> the u.k. train system could probably use a little bit of help. can he come over here please? >> what is he going to do next? >> we don't know but he will stay in corporate life. >> we thought you knew. >> matt miller will know. alan mulally talk to stephen engle about everything from becoming the number three foreign carmaker in the chinese market to leaving the company. >> i think it's going to continue because the strength of the economic expansion here in china is probably going to be seven and a half percent. industry has grown around seven and a half percent. in ford's case we are bringing

haventire plan where we all the different vehicles available to consumers in china, so based on the x preventing -- on the expanding product market i think we will continue to be preferred here. >> do you have your eyes set on the number three position for foreign sales? you are within striking distance hyundai. and sunday -- you have to be looking at the number and saying number three looks good and number two. >> we love serving consumers in china. our eye on the ball and keep making the best world-class vehicles they will know who the leaders are. >> i want to run through some numbers. 271,000 cars sold in the first quarter. that means 1.08 4 million in china. is that the number you are sticking to? >> i think our sales are going

to continue to increase. we're so excited to be serving customers here. >> are you going to be over one million? >> i think customers will decide. they are sure deciding in a nice way now. >> is it going to be higher than last year? rise we don't make predictions on volumes in sales, but it's purchasee seen in the decision. >> lincoln, you are late to the market, but does that give you some sort of advantage because you see how the luxury space works? >> it's an interesting question because it's true. after you have been through the they will beldwide paying a lot of money, especially when we have alternatives like ford that has volume. think these new lincoln's and the response they are getting they are going to be well received. >> you are going to make them here? advantage doesst

that give you? >> we will import them for a while. we will start to design them. >> are you going to see the day that china becomes the number one markets report? it's a long way to go? >> it's an important market. it's going to be the fastest growing market. serve.excited to >> this is your last year? >> i love serving ford. don't make me go now. >> joe biden is meeting with ukraine's government and the accord reached last week seems to be near collapse. ryan joins us with more. we are back with sanctions watch perhaps. >> we are. the u.s. secretary of state phone the russian foreign minister over the weekend and said if russia doesn't take action to the escalade the crisis there will be a response

in the next vivid old days as he put it. -- in theard from next few days. about the cronies of president putin and the assertion of the oligarchs. interesting because on thursday right after the accord was announced john kerry was talking about how if there was no russian action over the weekend there would be an increase in sanctions immediately following the weekend. here we are on tuesday and u.s. officials are saying sanctions could come in days, not weeks. an idea of investor sentiment in response. >> it has turned decidedly negative. the russian stock market opened down. it was down one percent yesterday. that after it closed two percent on friday.

it is really going to go back to thursday morning to see the pessimism. that is when president putin made the comment about how the east and south used to be part of imperial russia. it really got people thinking, is that some historical dust of vacation. >> the word imperial. >> he didn't use the word imperial, but he used the word new russia, which is what they called the south of the country until the soviet union came into power. it was conquered in the late 18th century by the ottoman empire. likee said, that sounds the comment they made about giving way crimea in 1854 because he didn't understand why it was given to ukraine. >> what about the geneva accord? it was signed last week. where are we on that?

>> basically we are nowhere with the united states and russia accusing one another of failing to do their part to implement the accord. all of those buildings in the seized ukraine that were are still occupied by the pro-russian militia. the pro-ukrainian militia the russians want disarm hasn't been disarmed. then you have that mysterious shooting, three pro-russian activist killed over the weekend. the russians said that was right sector killing. an example of why the ukrainians can't be trusted. the ukrainians said that was russia killing its own activists forreate a pretext invasion. >> thank you very much. to buyrtis has agreed for $16 million.

we are going to dig -- we are not going to dig into the deal, but a busy week for the drugs industry if we throw in the pfizer, astrazeneca news. for does this mean investors, all this activity in the drug space? >> it seems they got close. interested me was financing. i mentioned the theme of the being payout from equity higher than corporate bond yields. it's very unusual. i have never seen this before. the dividend yield is about five percent, so just inc. about it. you take that out. you no longer pay the five percent. where does pfizer finance. circa three percent. very unusual to be self financing, actually making money on financing.

you have got this stock buyback financed by corporate bonds. are selling expensive corporate bonds to buy equities. for me it's another example of why you should still be with equities. a and the drug sector makes sense to you? the fact we are seeing that happen? >> i'm not a specialist in the a financingom perspective it seems to make a lot of sense. directore the finance of pfizer you say, yes, we can do this. >> you are still banging the equities drum. >> the markets latch onto one or two themes. ukraine is an issue we have to come to terms with. until bond yields are substantially higher, i think

equities is the place to be. >> the earnings story has to be a focused. are you impressed or unimpressed by what you have heard so far from the european corporate scene? wax we have had more from the u.s. than from europe. the u.s. has been very mixed. overnight,good news but basically, expectations have really been marked down. we are looking at quarter on quarter negative rates, which we haven't seen in this cycle and expect to see better than that. the earnings were more of a story and europe. i think the earnings picture was reasonably solid in the u.s., as you might expect. >> will sales growth in europe translate into earnings growth? >> there is leverage their. traditionally when you see gdp

or the purchasing managers indices go up, you tend to see decent rebounds in earnings. kind of waiting know. >> we have heard from the ceo of phillips this morning, and he was complaining about the strength of the euro, complaining it was a little too strong. when you're looking for european indexes -- businesses to buy in at an equity level are you looking for those not to be hurt by the strength of the euro? is it a size issue? >> it is definitely a factor. inalso said europe is bottom that interview, which i think is encouraging. strength of the euro has caught a lot of people out in the sense that the u.s. looks better and the u.s. dollar is the place to be. >> of many people talk about how the ecb is ready to do something like quantitative easing, yet the strength of the euro

persists for these companies. >> the stockpicking team would really struggle with short-term movements in the euro to justify completely moving out of one company versus the other. aside whenut that picking our stocks. >> thank you. us. higgins stays with we will continue our conversation with him when we return.

>> time for company news. pharmaceuticals in pershing square are teaming up. they would like to include $15 billion as well as stock. paid nearly 10% stake in two months. pfizer is said to have held informal and now discontinued talks to buy astros add a cup. astrazeneca. if approved it would be one of the largest in the industry. tesla is looking to build cars in china in the next four years. the ceo says the company is

building a big network of battery charging stations in china. they beginmes as deliveries into the country. >> i am mark barton. >> time in london is 7:18. >> alan, as investors, how do we weather this? thedo we strategize around events in ukraine, which are changing every day? >> it's very interesting. if you think about what they said in geneva, what that means is they want the russian theiers to go in to get russian soldiers out of those buildings. it both ways. me the russian point of view. you get a little more balance.

they definitively say no interest. onhink you are seeing that thursday. the implementation is very difficult. we have bought some russian bonds. we have bought russian sovereign bonds and national champions because dollar denominated have enough resources to see it through. and a rare bit value within fixed income. thehe last couple weeks meetings we saw a really highlighted the different paths we see markets going on at the moment. russia has its own issues surrounding ukraine. talk about the distinctions between emerging and developed

markets. >> in terms of that we are it is a neutral stance. much cheaper market. when you itve deeper into the value, leads to russian stocks or chinese banks, which it looks pricely cheap based on ratio. , youwhen you delve deeper want the consumer stocks involved today. a much higher valuation. that is why it is broadly neutral. we expected more in debt. and dollar denominated.

for example the 100 year mexico bond in sterling. >> why do they call on the bond market from this year? you have gone slightly less underweight on safe haven bonds, haven't you? why were so many wrong at the start of the year? >> that's a good question. it has been right to be contrarian in almost everything. it is a bit like foreign exchange. tomy career it's very hard get the direction right. is improving, and eventually rates are going to go up. the market slaps you in the face. there is still demand for fixed see pension funds.

we see them demand to basically uy bonds, so there is enough demand there. that is why we bought 100 year mexico. >> large binoculars to see 100 years in the future. >> if you do mathematics, the different. no >> what was the yield? percent.five >> thank you very much for joining us. qwest coming up, new technology that takes selfies. that is next.

some of have a look at the big stories today. some of the most compelling images of the day. for those who can't get enough of themselves with their smartphone selfies you can now get slc in 3-d. slc -- a se-- get lfie in 3-d. they can even show tattoos on the skin. and they sprayed their beloved

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>> i'm mark barton. >> the time in london is 7:30. >> thanks very much. the talk of this trade has not been euro weakness. it has been euro strength. it has impact on inflation and what the ecb should do. this has a real world impact. the ceo tells us this is strong. a little bit he does not advise what the ecb

should do. in their view the ecb is probably going to act on rates first. >> thank you very much. >> these are the top headlines. greece is turning to anger at korean -- grief is turning to outrage in south korea. the national mood is shifting to outrage as the search for bodies continues. more than 200 people are still missing a week after the sinking. seven crew members have been arrested, including the captain. u.s. vice president joe biden is meeting with ukraine's president today. this is an agreement to ease tensions in ukraine showed signs of crumbling. the deal reached a ukraine, the eu, and russia called for a legal groups to give up their arms and return seized buildings in several ukrainian cities where russian forces have held their grounds, saying they are

not bound by the agreement. italy's biggest banks announced a preliminary agreement with kkr . that is according to the financial times. willeport says unicredit pull the bad loans which could contain several billion dollars worth of loans. >> novartis announced multibillion-dollar deals to buy glaxo's oncology unit. jonathan ferro has been pouring over the details of the story. earlier would describe this as selling off some of the smaller units. >> some big deals and a lot of news. i will try to make this a little clearer if i can. they are selling the oncology unit to glaxo.

that is going to be a $16 billion transaction. glaxo's oncology unit for 16 billion. they are selling for 17.1 billion. they are also going to be getting a little more money back as well. animale buying the health business for $5.4 billion. they are combining the consumer business.o create these are not small deals. they are big deals. my question, why streamline the business? >> if i look at health care over the next 10 years there is going to be increased demand for health care. you have got an aging population. there will be increased demand. at the same time governments are going to continue to look for

ways to lower total health care costs. i believe you had better be number one or number two or number three and your segment. that is what this was all about. it was to strengthen the novartis portfolio so for the next 10 years we are in fighting condition and we are the health care company of choice. >> what really interests me about that is we are going to get more and more demand for health care, but in his view the government is going to be pushing down cost, which means smaller markets, so you want to be on the top. >> it was interesting you were that this was the end of it. they are focusing on delivering, so that is going to be the focus, turning these transactions into a reality, but he was still talking about it, wasn't he? >> today was the end of a process that began last year to sell off smaller units. prettyey sell off it is

much over. the coming year is going to be about integration. orphillips first court profits missing estimates. >> manus cranny joins us for more. the ceo was speaking a little bit earlier and had a strong message on foreign exchange, didn't he? >> he did. when you delve into numbers, the strength of the euro has been one of the biggest issues. exactldn't give an number, but i think when you look at the numbers, there are a couple of issues. one is the foreign exchange issue, which has been very much key, but also you had a conversation about russia and that and the challenges lie ahead. >> in china we saw the economy continued to slow down a little bit, and that's especially is noticeable in infrastructural project. our lighting business suffers from them. business was still

going strong, especially with air. vacation. that is a hot product -- with air purification. we see a reduction in demand further aggravated by the fall of the ruble, so that is where we see a double whammy. are two of the hottest geographical topics we have talked about. when it comes to health care, there is a big vision based upon revenues. they say there are encouraging signs. the three big messages was about led lighting solutions. being a solutions partner is the way forward for him. the euro is too high. he would like to see it lower. third the non-fat fryer.

>> every time mark discusses the non-fat fryer. >> it fries your chips without using fat. i like when he tells us about the product. >> let's talk about lighting and the services they are trying to deliver around that. it's not just manufacturing. this is about delivering services. >> this is where retail and development are really beginning to grow. when i was reading this story our team wrote last week, think about washington, amsterdam, the thinkingties, i am about the sistine chapel, notre dame, washington state, all blockbuster lighting project. they have tried to put a montage. >> where is your flat?

>> fears like an elephant. give him a fact at 6:00 in the morning, and two hours later, where is he? >> i like your fat. what percentage are led? about led andmore lighting systems. i am looking at led lighting. it's expensive. i need to get the two of them on the phone. can you reduce the price of the led lighting? obliged to put 75% led lighting. >> for the last 20 years. one of the cars on display at monaco's luxury show has caused a stir since it launched last year with a price tag of over $3 million and some never before seen features. the hyper sport has been turning

heads. it started with a dream, a dream of completing something completely unique, completely out of the box, and we wanted to make something that looks like a concept and yet is a leading car. our market is very different from lamborghini. we are very good friends with all of them, yet we wanted to make something exclusive. we are focusing these hybrid cars to be luxury, performance, and design. we have 770 horsepower. we read 400 kilometers per hour. we have suspension that raises it so you can drive it normal. we have ruby and emerald in the light so you have beautiful colors. we have 24-hour service that comes with a car. there are only 24 members of the global elite membership in the world. it comes with a 200,000 dollar

watch. it is very limited-edition. it is handbuilt. it takes 800 hours just to paint the car. it is hand-painted. this is a completely unique system. this flies midair giving the passenger and driver's full control over interactions with a vehicle. back in the days luxury was nice leather. today modern luxury technology. >> this car comes with a free watch. it sounds like knight rider. has theknow if it functionality that makes the car talk. amazing what they give away with cars these days. coming up, we will be watching the market impact of the situation in ukraine. that is coming up next. ♪

>> captain america has vanquished at the box office again. the superhero film was number one for a third straight weekend. it collected more than $200 million in u.s. sales.

says the infringement claim is 50 times too much. case for ao make its jury. pay it is into stark contract to apple's demand. announce ans agreement with the restructuring advisor. pooleports as they will bad loans into a new vehicle. welcome back. >> it is 7:44. we are less than 20 minutes from the start of the european session. manus is here and john is here with what to watch. what have we got? >> it is dollar u.s., dollar u.s., dollar u.s. and repetition. it is the strength of the u.s.

economy. it pervades over everything. it pervades over the dollar yen trade. it is the longest winning streak since wendy 12. you have the following dollar rising. where does the chinese currency come in? >> i know the u.s. government was speaking out against currency manipulation. >> who will be the next currency manipulator? could it read china? i don't know. this ties in with the data which will come in in the next 24 hours. the people's bank of china sets the yuan rate at the lowest level since september last year. that is critically important because you are going to get manufacturing data in the next 24 hours. the question is are they moving. it is an indication. >> what's the view? wax they were trying to

introduce volatility. are they guiding it lower to help exporters. you have seen them continually guide the reference rate lower. that is pretty indicative of what is going on in china. there is a lot of pressure on exporters. a lot of these guys have very small margins. we get the overnight reading. >> it's still going to be below 50? 548.3. it's getting to retraction territory, and that's not going to make anyone particularly happy. >> bernanke is speaking. >> eight years of crisis management at the fed and the way forward. i don't think anyone knows what the way forward is right now.

we still have got zero interest rates. we have still got qe, and a lot of people think the zero interest rates aren't going anywhere for a long time. >> ukraine doesn't go away. >> it doesn't go away, but you see joe biden land. you see this accord, the geneva accord. it's certainly not holding. it's almost in terms of rhetoric a rerun of what we saw in the run-up to the annexation of crimea, yet these markets are completely and utterly -- >> the longest rally in the market in 2014. >> the focus will be bernanke's speech, but you also get the factory index. you are going to see a little more data there. existing sales as well. we are going to have the

european consumer confidence number. >> i have just realized we didn't mention football. go on. mark is here in body, but i'm not sure he is here in mind. >> that's just one sports section of one newspaper. the manager i think was on the front page of the telegraph today. as have been following this well. it could be the manager's last day as well. he has been in the position for 10 months. it has been a dismal period. >> it has been emotional. >> they have lost seven times. >> who is going to take the top job? david beckham. >> i don't think he gets your vote. >> you have got lewis been gall, but there are some good candidates. >> if you're not familiar with

football, think of it in a business equation. think of apple without steve jobs. david moyes is terrible. >> today could be the day. if it is, no doubt i will be talking about it tomorrow. i'm not sad. the rightink he was man for the job. >> there we are. that's everything we need to watch out for today and a few things you don't need to watch out for. coming up, the big business on drugs. we will have more on the novartis deal and what it means for pharma stocks. the market open is coming up in 11 minutes time. we will be back after a short rate. -- break. ♪

>> welcome back. >> the time in london is 7:52. let's take a look at stocks to watch. to see you.ood i hope you had a lovely easter rate. we have had big news from units,s buying some selling some units. we are going to see how this is going to affect markets as they open. >> i think the drug sector is going to get a big push. you have got this possible deal

with astrazeneca as well. fivenk it will be between percent and 10%. it seems to be positive for everyone. shareholders are going to get about 4h back, so billion is going to be returned. i think it is good news for investors and should put some positive momentum into markets today. developments seem to be shrugged off by markets, especially when you look at european futures. i suppose that can change at any moment, can't it? >> we are going to get this uneasy situation in ukraine for some time. the markets are going to assume there is not going to be any military involvement. you are going to get this slow beingwith certain states annexed. it's not going to escalate

hopefully in a serious manner. the markets are saying this is just going to be a slow creep and we are going to live with it for the next two or three months. with there we seeing lighting business reporting numbers, missing estimates partly because of foreign exchange, and the ceo speaking out and saying he thinks the euro is too strong? >> i think that is going to be the scene from a lot of european countries that the euro is too strong. today.ing to open down the health care unit is showing signs of recovery, and i think newslinks back to the drug we saw today. margins are going to be squeezed western economies. emerging markets will provide some growth. i think it is a good run in the long term. i think you are going to get some action from the ecb to try to weaken the euro. whether mr. druggie can be

successful is another question. >> it's rare i speak to a fellow football fan whose team has had . worse season then my team >> that is low. the expectation nor it wasn't that great. wasn't that great. he loves man city by default. >> i have been trained by my wife's family to have a dislike of man united. this season has been rather positive despite the possible relegation, but hopefully they can get a couple points this weekend. >> as a neutral, which you are not, who do you think if he does get the boot today might be the next manager? >> i think you are probably going to get the barcelona

manager. i think that's possible. >> thanks, good to chat. >> on the move is on next. ony will be keeping an i drug companies after the deal.

>> welcome to "on the move. we are moments away from the , and of european trading our markets team has everything covered from markets to currencies. with us is caroline ride and manus cranny. what are futures doing? >> a little bit higher. there seems to be complete indifference with what is going on in russia and ukraine. u.s. is getting

stronger. the dollar is getting stronger. the yen is a little lower. there seems to be this next move building on last week. we have been away for four days. they seem to be building on those gains in the u.s. >> futures are indicating a higher start. a lot of focus on pharmacy. up withare teaming glaxo to streamline the health care venture. a lot of news this morning. the takeaway is they are streamlining the business. the process started a year ago. they are selling off smaller units. the ceo of the year told us is about integration. >> i think for the moment stocks have changed. it's unclear whether it is open and unchanged or unchanged because it hasn't opened yet. that is one company we are watching. there are a handful of other stories we are watching. beingker of botox is targeted for takeover