>> pharma frenzy. astrazeneca shares soar. pfizer says it is still interested in a deal. >> the french connection. jeff immelt arrives in paris to defend his offer for alstom. siemens proposes a european solution. >> president obama says new sanctions against russia will be unveiled today and will target sectors including high-tech defense. good morning to our viewers in europe. good evening to those in asia. a welcome to those waking up in

the united states. i am guy johnson. >> i am francine lacqua and this is "the pulse." >> it has been a bit of a day when it comes to m&a. it is a merger monday. pfizer has confirmed a possible offer for astrazeneca. that's talk about what is happening in the pharmaceutical sector. here with me is manus cranny and sam. gentlemen, good morning. it has been a busy morning. we have bayer to talk about as well. let's start talking about this astro transaction. maybe this isn't such a great deal but is being driven more by pfizer wanting to put all that cash it has got sitting overseas to work rather than any rational use of that money. >> as you rightly say, there is quite a few variety of ideas coming out here. at the end of the day, when they broke the rumor last week, everyone was going, maybe it

doesn't come and beat me it does make sense. hadreality is that pfizer approached once, approach twice. convinced that they can sell to their shareholders and astrazeneca shareholders. things we don't know about are the levels of cindy -- levels of synergy, what value the tax aversion has for them. it is not the same extent you would get if you were buying an irish listed corporate. it is still a big difference between the tax regimes. there are things in the numbers that pfizer must be feeling good about. i don't think the company is desperate to reagan -- is desperate. there must be something they are feeling reasonably confident about. >> manus, we were talking about the french government. how will the british government feel about astrazeneca being sold to pfizer? >> i think it is going to be a very interesting momentum.

we heard slightly from the labor side last week, talking about concerns. there are 7000 employees at astrazeneca. this would invoke, i suppose, talk of a deal a number of years ago where a chocolate brand was kraft, an american brand. it is a big employer in the life sciences division. , ifly, can the government they begin to talk about this deal -- you probably won't see them interfere but they will have an interest in it. it is a strategic business. if it is somebody coming in to build a business and add jobs and add growth, why should the government worry? >> both of those are quite big if's. we will see. they are talking about head quartering in the united states. sam, if you are an investor,

your head must be spinning. a number of deals are being announced. about whyquestions now, what is going on that makes this sector so interesting? and are all of these deals being rationally thought through? is there a sense of the industry having an m&a fever at the moment? >> if you look at the deals we have had so far and those that are being rumored such as the merck sale of its consumer health business to either bayer , if you look at novartis, the number of deals where you knew something would happen, novartis was very clear about its intentions. the businesses that it called sub critical mass. if you look at all the things the management at bayer and merck have said about their consumer business, it all ties

in. it makes sense that that would happen. the two surprises here are the novartis oncology deal with glaxosmithkline where nobody was expecting that, and that was the biggest of the deals, and this pfizer-astrazeneca one. we heard a lot from pharma companies saying we don't believe in megamergers. >> there is a common theme. >> if you look at pfizer's commentator, they never said that. whole marketot the pumped up? you said the oncology deal with novartis along with glaxo, here we are with pfizer going after astrazeneca. do these kind of deals bank up? >> one of the reasons they may be doing this now as opposed to before -- there is no logic to that -- but pharma companies are

now getting through. they are getting more confident with regards to their capabilities. perhaps they want to be making sure that they are the big winners going forward. that is one of the few things i can think of as a major driver. they are feeling a little more comfortable with their own valuations. >> gentlemen, we believe that there. this is a suspect we will be talking about more over the next few weeks. manus cranny and sam joining us from bloomberg industries. let's continue the m&a theme. francine, over to you. >> thank you so much. let's focus on alstom. alstom stands at the center of a bidding war. siemens has won support from french officials for its asset swap plan. in the meantime, ge's jeffrey immelt will make his case to president hollande. ndns nichols is in berlin a matt campbell is in london.

how is it looking at the moment for ge? i would say not so good. >> mr. immelt is going to have to practice his french on how to say sorry. explainstry minister to why he didn't involve the french government in talks earlier. these talks are in advanced stages. ge has the support of the board. they have done their due diligence. they are ready to pull the trigger. when news of this roque, shares were suspended. now we have this new bid from siemens and this could make a lot of sense for siemens. they want to go heavy on the industry side of energy business. when they look at their transport business which has caused a lot of headaches, they are saying to alstom, transport will stay in france. we will make a three-year pledge not to cut any jobs and both companies can have strength. in a lot of ways, this offer

could have been written by the french government. it could be that difficult to turn down. for cash. match there is not a lot more the french government could want. >> at the same time, the reason the french government hasn't been involved is they are not a stakeholder. they tend to get involved in these kind of things and they are just a client of alstom. government does not own a direct stake in alstom. that makes it different from a lot of other big french companies. orange has substantial government stake. what that government has is this a lee pulpit, -- bully pulpit. at the end of the day, french companies don't have to listen to the government. vivendi show that recently when they spurned this bid from bouygues for sfr and said, we are going to go with the bid that the government doesn't want. there are two differences here.

one, the french government is a major customer of alstom. the other aspect is bouygues itself. bouygues put together this government and forced bid for sfr. bouygues also happens to own 29% of alstom. bouygues is very close to the government. if they want to upset the government i going with ge, that is a question. >> we know that bouygues management are going to see jeff immelt. also, the siemens ceo is going to see him. i am quite surprised about this backlash against ge. we were talking about it last week. they are very popular in france. france isf ge considered one of their own in the french establishment.

they also have 11,000 employees. why do they prefer siemens, just because it is european? >> apparently. this is the comment from the industry minister. you could have two champions. one in transport and one in the energy sector. when you look at the number of employees, ge has 10,000 employees in france. alstom just has 18,000. they have a bigger footprint but it is not like when you look at their employment profile, these are entirely incomparable companies. they employ thousands of people all throughout the french industry. this could come down to who is really in charge of the large companies and france. can they make decisions based on the best interests of their shareholders or can the government intercede and say, we have a say about long-term planning? it is a fascinating case study. we will know on wednesday when shares open again. they will start trading and alstom needs to make their

decision by april 30. >> thank you so much. three days ago and we have all these meetings today. matt campbell here in london and hans nichols in berlin. die, over to you. >> let's turn to the standoff in ukraine. president obama says new sanctions against russia will be announced later today. >> we are going to be moving forward with an expanded list of individuals and companies that will be affected by sanctions. they remain targeted. areasl also focus on some of high tech defense exports to russia. we don't think are appropriate to the exporting in this kind of climate. >> he made those comments in the last hour in manila. is white house correspondent traveling with the president and joins us now on the phone. that thesent are you

sanctions will deliver a result? >> the really interesting thing -- when we have spoken to u.s. officials and the president himself -- they are not entirely sure they are going to work. the way the white house is thinking right now is they have the big hammer they want to hold over president putin's head in those next level sanctions. the president said they are not there yet. these will be targeted sanctions. they will give companies and individuals building off of what has already taken place. it is that next level that will hit entire industries. banking, energy, defense. that might end up being the final straw. the president himself is saying, i am not sure that these will actually work. happensrms of what next, let's discuss that for a moment. the treasury will likely announce the details of these. that is how the process normally works. is that how it is going to work

this time? are we going to get the later today? what time are they going to be allowed to actually work? changed,avior isn't whathite house and european officials said is the threshold for those sanctions, is if the currently massed russian troops on the europe -- the ukrainian border move in. so far that hasn't happened yet. there is a big question of how unified they will be if sanctions are imposed. there are a lot of countries that would be hurt by that. that might be more of a patchwork implementation. incursion there is an by russian troops in eastern ukraine. this will be very similar, we think, to the procedure when these sanctions were initially renounced. -- initially announced.

when they are going to announce it is still up in the air. last time they did it shortly before u.s. markets opened. i think what you are going to see is the white house will make the announcement. you will see folks talking about what it means and get a list of who they are targeting. i think the assumption and what officials have telegraphed is these are going to the folks, very wealthy individuals, very connected to president vladimir putin. those are their targets. >> thanks for your time, phil mattingly. let's stay with the subject of ukraine. francine, back to you. >> thank you so much, guy. ministers are meeting today to discuss sanctions against russia. ryan chilcote joins us with the latest. what are we expecting the eu to do? act as tough as the u.s.? >> what we have today is eu officials meeting and we are

expecting an announcement later in the day. this is kind of at the level of deputy foreign ministers. will they have the go-ahead to announce the sanctions today or will we have to see a heads of state meeting? that is something we don't know. what we do now from the deputy foreign minister of germany is what the eu is likely to do is expand that list of sanctioned individuals they have by another 15 people. no companies that we know of yet. basically, more so-called stage to sanctions. >> who is going to be hit? >> from the u.s. sanctions, we heard from president obama earlier today talking about going after high-tech military aports, that would suggest company that exported $16 billion of russian weapons last year. >> ryan, thank you so much. ryan chilcote with the latest on

these possible extra sanctions. we are back in a couple of minutes. ♪

>> welcome back. let's talk about the currency markets. euro/dollar spiking higher. reasons for this, a bunch of m&a today. you have got u.s. gdp this week. you have got the fed this week. there is talk as well that various russian entities may be looking to exit the ruble.

there are various permutations about how you do this. all of this in aggregate could be affecting the dollar today. as you can see, a big spike earlier on. trading 1.3875. coming up, ge versus siemens in the battle for alstom. the heat is on when it comes to that story. find out why our next guest says politics will determine which company comes out on top. we will see you in a moment. ♪

roadblock stands between jeff immelt and his plans to acquire alstom. siemens has offered its french rival an asset swap deal to beat the bid from general electric. mmelt is set to meet french president francois hollande. >> let get a sense of where this transaction is going. daniel joins us to give his take on where this stands. from an industrial point of view, from a pure business logic point of view, which deal stands up best? ge or siemens? >> from an industrial logic it is difficult to judge. what is more important is the political situation around the

whether theuation, two deals are somewhat different . if you combine the siemens transport division or a large part of it with alstom's real business, what you have is quite frankly one of the top global players and transport, 10 to 12 billion in revenues, it enters the super league of transport companies. really punishing its weight with the chinese. i think that is really what is quite critical here. rather than necessarily the amount of cost savings, whether it makes sense from a sort of immediate shareholders standpoint, i think what is really critical is the political situation. asset preservation as well as job preservation. you are putting two companies together, both on the power side

of the rail side. you end up with a european solution rather like the airbus situation several years ago. you have two champions within europe. i think that would seem to way more in favor of the siemens transaction at this stage. >> will that actually do terror deter ge investment? france, 8ple in billion in revenue, this is almost a french company. ge,n the plus side for there is far fewer job overlaps with ge than with siemens. ge inpeaks positively for terms of job preservation. secondly, there is a question of antitrust. withu put siemens power

the two transport divisions together, what you end up with is two very large european-based power and rail businesses. with the antitrust authorities be interested in such a karen's action -- in such a transaction? ge would be far quicker getting the transaction done. what method will it send if we end up with the siemens transaction being the one that is pursued? from a european industrial point of view, what will this say about the investment case here? if you were to look at further deals down the road, further transactions involving france, where will this put us? >> in terms of further deals for known thatis well they have balance sheet issues. with cash and an asset swap, that gives alstom latitude to make further acquisitions. in terms of other u.s. companies

coming in, i wouldn't rule out ge at this stage. ge has a lot in its favor. it can move quite quickly on this transaction. of course, i think what is key here for any company, u.s. or indigenous european, typically when it comes to a company like alstom that has already been rescued from financial difficulties in 2004, politics does play a much bigger role than would be appreciated initially. >> danielle, thank you very much indeed. >> now it is time for today's hotshots. in pole dancing, they have started classes since the 1990's. have beenole dancers competing in the annual poll world cup. who knew there was such a thing? men and women are showing off their skills this year. >> rock climbers take on

california's most challenging without a safety rope. they captured the expedition in close detail. we will see you in a moment. ♪

>> bodo meck to "the pulse." covering thisn story no week. him him know we understand the french government is not opposed to this ge bid for alstom. they are meeting with the french president today. they are keeping an eye on this. the government said not to oppose the ge bid.

-- setboss of ge is that to meet with the french government. that is a significant statement. this levels the playing field a little bit more than we had first entered -- anticipated. a it has been a massive m and segment this week. they were interested in acquiring alstom for $100 billion. the proposed buying the drugmaker on january 5. let's find out exactly what is going on here. she is joining us from a geneva. she is a pharmaceutical analyst. good morning to you. from your point of view, does this transaction makes sense? let's start there. >> absolutely.

that would be the biggest ever acquisition in the pharma industry. .fizer would buy astrazeneca that would increase acquisition deals, which is one of the highest this year. >> but why? why would they do it? what makes this such a great deal? story? doesnergy this sm to do with oncology? has already rejected a deal. why does this make sense? >> astrazeneca is a very focused company. point forvery good pfizer. that is why we have seen a lot of swapping assets. the company is very diversified. in the case of astrazeneca, they have a very focused pipeline. they have an oncology pipeline.

boost theway to immune system against tumors. that is one of the more interesting targets in the cancer research. that would increase the prospect for the future of pfizer. ahead. >> i wanted to add another major point. improve definitely the tax going forward for pfizer. >> one of the things that we discussed last week when this first came to light, there was this merger in the works in january and talks had been is one of those megadeals that was done out of egos. is there a strategic sense for these two companies? are they too big?

that people are try to focus on one thing. it this would be so huge. it would lead to job losses and would not make that much sense. >> you are right. one of the? question marks is they have sales declining in the next two to three years. this is not term, the best deal in terms of portfolio. they think they can do a lot of cost synergies and savings and on the tax issue that could be an improvement. in the short term, it doesn't improve the growth prospect for pfizer. price, you think about are you comfortable with the price being paid here? are things missing in

terms of my understanding of why this is worth so much rated we are talking about a significant premium. can -- how much can they get out of this? sales force that could potentially do something. where does the bulk of the cost savings come from to generate the price we are talking about? >> it is very difficult to say at this stage how much synergy they can make out of it. billion is four times the sales. that is expensive. that is also not unrealistic if the pipeline delivers. that is the question. it is still risky. we have not seen the long-term therapy. of this

if we don't know what is going to happen to the immune system going forward. long-term issues have not been proven. tell howy difficult to much they can make. what they would bring is a good footprint and to emerging markets. this is a region in which you have almost double digit growth going forward. >> thank you so much. let's take a look at how the european markets are trading. it was a busy morning. let's think about what is happening in the ukraine. five out of six for we are seeing gains. what a bet. $100 billion.

a rise of 50% in terms of the size of m and a activity going on. come toe, if they'd yield in terms of astrazeneca, that is four times sales. this is the biggest one-day move since 1993. volumes are storming through. that to get notes the deal done would increase 60 points. that is a little bit of a stretch. leaves you upwhat to 1.68%. that is the pharma discussion at the moment. it does not mean you could be tomorrow's story. pharmaceuticals is one to watch. let's look at u.s. equity futures. this is up a third of one

percent on u.s. equity futures. it seems at the moment that the entire russian issue has been left to one side in terms of how the markets are reacting. the question you have to ask yourself as an investor is after -- $350onion dollars billion, do you still want to be that committed to these markets? from our guess, yes, one does. >> manus cranny with the latest on the markets. thee are joined with company that streamlines your daily task. good morning. it is very nice to see you. nice t-shirt. >> let's talk about where your businesses right now. you have such great offerings on the ipad. now microsoft is beginning to

talk about getting into that space. is the game changed? >> the microsoft was the old game. theosoft office had definition of what productivity meant for 20 years. that stopped being relevant about four or five years ago. it makes sense of their try to get that game back tom about it maybe too late for them. >> what is your challenge? i am a lover of lists. they have competition out there. >> the biggest challenge of any start up is just internal execution. the most likely reason that we would not reach our full potential is nothing to do with competitors. it would be us not executing. we are more focused on internal execution and we are on who is competing with us on the outside. >> what is the hardest thing for you to face? what is it the constrained your business right now? >> it is getting the right people. come petition among companies is much more for the best people

that is against product. thatmpete with companies have nothing to do with our product. we are copying -- competing for talent. >> all indices face this. how do you deal with that? is it more money? if you were all fighting for the same people, what do you offer to do things a step above? >> people are not exclusively motivated by money. people are motivated by feeling like they're working on something meaningful and they are making a difference. the best thing we can do is if you believe in what we are doing, you can help us build something that makes the world smarter. that is attractive to a lot of people. >> flexible hours? about work and life integration. we have a lot of great policies

to help you integrate your work in your life. balance is probably the wrong way to look at it. it should be your life's work. you should want to work as much as possible on it. we try to make it as easy as possible. it is a lot of work. >> is it being in the valley? when you try to recruit people and your hr team is trying to figure out how to do it, if you're thinking about the tech landscape, how do you do that? we are trying to build a tech city in london. we are trying to get people involved in the industry. are there visa restrictions? is it easier to recruit in india? >> getting great people is hard everywhere. there is no place in the world where it is easy. we have nine different offices for recruiting around the world.

if we were only in silicon valley it would be harder. we can get great people from all over the world. the visa issue is a problem. the u.s. government needs to be smarter about letting great talent in from everywhere. it is a significant problem. recruiting is only half of it. caret development is the other half. working to make sure that people are getting better all the time. that is just as important and a startup like ours. we have people who are managing big teams and have lots of responsibility, but they have never managed anything in their lives because they came up so quickly in a start up raid we have about 370 employees worldwide. we have a lot of people that have never managed anyone. big are now running departments. they don't have the professional experience of management. getting those people to be as good as possible, that is the challenge. i don't worry about microsoft making moves. we have to run into them on the

recruiting process. recruiting. about i'd of the price matters that much. our philosophy very much is on direct revenue only. we reject indirect revenue streams. we don't have advertising. we are not a big data company. we don't try to monetize your data. we only make money when users pay us for a product that they think is a good experience great we don't make money any other way. we could make a lot of money if we were trying to monetize your data. we think that would cost us trust and we would lose in the long term. we are looking for the long term for revenue. we make things. if you want to buy them, you pay us for them and we make money off that. what is numberow one on his list. i love the list.

we are going to talk about what is happening in the tech landscape. we will see you in a couple of minutes. ♪

>> we are live from london on bloomberg tv. ofthat highlights the focus the tech giants have on

improving wearables. let's talk to caroline hyde. angela lawrence has a pretty tough gig. the euphoria of the money going back to shareholders, iphone sales were beating expectations. there is a concern about the retail operations at apple. have they been updated enough? steve jobs brought him rhonda johnson and they brought in these white spaces with see-through staircases. it they have genius bars. they have not updated it for a while and retail sales have stagnated. profitability at the rate till death retail a woman is going 2012.3% since

they have open 26 stores. or has been a stagnation. how are they going to incentivize for people to get in the store and buy. there is a lot of copycatting. we have seen asian rivals have similar starts of retail stores. that is what she is there to do. to bring the innovation that she had at burberry to apple. had social media hype. she get the younger and aspirational buyer involved. that got plugged into the whole burberry lower -- allure. will she adopt similar ways and means an apple as well? it is a luxury label itself. we want to see how she plays with the online and off-line sales, especially the new products we think will be happening later this year.

it there will be new iphones. there is also a bond sale as soon as this week. apple is looking to be raising $17 billion. they will have to pay more for it because yields of gum higher. >> thank you. that was caroline hyde. let's continue our conversation. if we were talking about attracting talent and retaining talent. how much focused you put on technical where? wearables are going to be transformational. looking a don't mind little bit geeky, i am wearing a pebble. everything. one of i am swapping them out and trying them. i know i don't look cool doing

it, but i'm ok with that. most people are not. it is going to take a couple of years for the wearables to be mainstream. they're going to take over the world. i do have google glass. >> what is your feel at the moment? if you were to take away anything from the early experience, what is it? >> it is going to be huge. it is going to be different from what we think about right now. a lot of the core ideas that are important to i.t. now, they don't make a lot of sense in the wearables world. concepts oflot of being productive and are going to change fundamentally in the next two to three years with watches and glasses and connective devices. >> who are you going to team up with? -- use listsose it would be useful to

have it on you all time. >> we are working with just about every manufacturer of devices right now. hopefully, apple does come out with something. we would love to work with them. we have supported every device apple makes. we work with all the manufacturers. we do a lot of the design ourselves, trying to figure out what the world is going to be like. i don't think you will be thinking in terms of lists. you won't have a long list on your walks to you will scroll through. it will be about glancing at something for have a second and knowing what you are supposed to do. the tech has to be more anticipatory. the systems set to figure what you're interested in and show you that thing to make you better at a combatant whatever it is you're trying to encompass. .ou will be a different it will be a different interface experience. it will be revolutionary. that there anything close

could deliver that? somethingking about being anticipatory. we need to make some big leaps forward in terms of how it is going to happen. is the physical device important? is it the software? we are messing with all kinds of stuff right now. i am trying to get a handle on the biggest challenge. andhe idea of software devices as two separate things is going to go away. an end. is coming to the idea that it is its own thing. it is not a relevant idea for rent -- wearables. we are going to talk about services. something andr then across all of your devices tom a dash, there is an ever notes experience. it is giving you a better memory.

it is not just software that runs your watch. you start ever noticed the beginning of the day. operating system is too low level of a concept. we are talking about the user experience. it is an all in compass in service. it touches everything. isthe ultimate interface something that apple is going to want to control. google is going to went to control it. >> at of the business today is about what you control. it is about what you unleash. i don't know if anybody is going to control it. facebook wants a lot of things. is givingare good at people a great experience of connecting with people. >> have a approach to? >> we talk with facebook and other companies all the time. we have had acquisition discussions with lots of people. i am not interested in any of

that. facebook is made some really and acquisitions. --definitely want to retain remain independent. we want to be a company that people are still in love with 100 years from now. >> thank you so much ♪. we are back in two minutes. ♪

>> astrazeneca have said they

will take no action. >> we also understand that the french government isn't opposed 's deal.

a deal fornnounces

astrazeneca. thath officials are saying nine. will they push ge aside? the crisis in ukraine escalates. the president is in the philippines. he says new sanctions are in order. good morning everyone, this is "bloomberg surveillance perko. i am tom keene. joining me is scarlet fu and adam johnson. >> japanese retail sales are up 6.3%. we know why that is. they are up in the tax rate to pay down the deficit. people were doing some buying before they had to pay higher taxes. in the u.s., we have some economic data. we have home sales at 10:00. we had a weaker home sales data last week.