and plump your lips. $1.4 billioné's facelift. ge and siemens come head to head in front of a french lawmaker to defend their plan with altrom. more on that. . >> asia trading at six-month highs. there is money going to the american and disease. we will be talking through the markets in terms of what is happening out there. we will talk about german unemployment. some confidence, but let's talk to jon ferro. >> asia higher overnight. the future is let to the morning. look at those levels.

a six-year high on the stoxx 100. all-time high over on the dax in germany. 9:00 supply data it out at u.k. time. general -- german unemployment expected to stay at 6.7%. compared germany to everyone else. let's bring you you market open on your morning. down just a touch. that flat across most of europe with the exception of the footsie which voices -- pushes higher by one quarter of the present. you are looking for retail times -- sales a, at 11:00 take him -- 11:00 a.m. u.k. time. inflation is too low. we have to do something about it. we need to stay committed to that 2% inflation target. what is the risk of underperforming? they have got to do more. that is the big debate. .> indeed, we do

or they do, jon. the battle for alstrom that continues. meeting witht is french president francois hollande as well as siemens. each of them made their case to the french lawmakers last night. joins us.onnan >> it was a head to head battle last night between the usg and the french head of siemens. it is all in the papers today, and the french press. jeffrey immelt was not supposed to come today. it was supposed to be the french head of ge. he said he decided to come myself because he thought it was necessary to convince skeptical lawmakers about his $17 billion bid for alstrom's energy unit.

he said he would give more precise numbers in terms of french jobs and alstrom would not be absorbed by ge. grow has committed to employment levels in france with a focus on high-value jobs, like manufacturing and engineering. this is in addition to the and gees that alstrom already have in france. i believe there is more we can do to develop small and medium enterprises that support the power industry. tried toy immelt also reassure, saying that he could its business to alstrom. that could be part of the package. of finally, he promised that the nuclear operations of alstrom -- they make parts for nuclear reactors -- would remain in france.

it was a concern of the french government, who want to keep france's nuclear energy independent. word inns also had a terms of the hearing. what did they say? this was the president for the french business, wasn't it? >> that is right. the head of siemens' french unit. that was important because the french finance ministry is getting impatient about siemen'' bit, urging them to come forward. thefrench unit said that bid would come by june 16 at the latest and that would include a swap were all -- where alstrom ofld get the valuing's siemens. they make the high-speed train. that would be combined with the offerd that siemens' would have the offer of the

government. >> let's see how this plays out. joining me now is andy lynch. great to have you with us. big you see this kind of deal getting done, what do you make of it? this is political and economic theater, isn't it? >> it is. we saw yesterday that it was a foot back to the roman days of bread and circuses. people being thrown to the lions on a regular basis. as far as theater, an important story going on. as technology gets more and more complicated, you need more and more scale to exploit that technology efficiently. that is the story behind the deal. economy develops, we are

going to see more and more stories -- companies trying to get industrial in fish and -- efficient so they can offer trains or powerplants cheaper, which is good news for us. >> when i look at sectors and industry, depending on what you want to say, quid pro quo from what you just said. as a longer-term investment, are those areas for me to consider? >> i think they are very good arguments for that particular you combine it with the big legacies that are dominating global discord. -- discourse. climate change. look at the alstrom story. we have gas turbines, much less polluting than coal-fired power plants. they have definitely got a following wind. over the next 50 years, we will move toward more renewables and

less gas. great midterm, gas is a way to bridge the gap between what we have now and the renewable engines of the future. they are not there yet. gas has got a really good structural growth story for the next 15 years. >> i had a cfo in here the other day. of course the cfo comes in and they will give you a great story. that one of the biggest finds in 30-40 years off the coast. how does the russian story play into that gas and the energy story in turning to china? >> i think the russian story there has benefits for china. strategically, they have got an absolutely massive pollution problem. we saw the pictures from beijing earlier this year. they need to do something about that for their environment. also for political reasons. >> we are going to get into your investment strategy.

you will stay with me for a little but after the break room coming up, -- break. nestlé gets a $1.4 billion facelift. ♪

>> welcome back to "on the move ." i'm nestlé -- i am manus cranny. nestlé is pushing into skincare.

here with details is caroline hyde. feeling fresh for the price of $1.4 billion? >> it is a lot of money to smooth away your wrinkles, to plump your lips, potentially. that is where nestlé is going. the maker of kit kat's into health and beauty. they will be purchasing assets from valeant. they are purchasing talks in assets from valeant. it is 1.4 billion dollars they are splurging and it is about being more forthright into health care and beauty. back in february, they spent 3.6 ilion dollars on taking full control of their dermatology unit. they took that, reviving skin again. it is about treatments for act --acne, psoriasis.

it is not just about baby formula. it is about beauty. >> why this push into skincare? it is a 50-50 joint venture. is it about diversification or is there more to it? >> it was a 50-50 joint venture but it is now taking full control from l'oreal and is $1.4 billion that it is getting into valeant's assets. it is about profits and growth. growth is slowing if you look at food and beverage in particular. we have seen competition across the globe. that is not the kind of margins they are used to seeing. now they feel they can ramp that up by getting into beauty queen the chinese, the indians -- that -- by getting into beauty. the chinese, the indians want to get into the market. they are slightly more aspirational goods, such as beauty queen -- ug.

10% growth year on year. it slowed but that is the growth they want to harness and the profit they want to drive. >> it has been written up as being an equivalent company. this was their strategy. >> look at the statistics on nestlé. you forget, but it has been the world's most acquisitive food company. $18 billion on 21 years in the last three years. 22 if you add on the 1.4 billion they announced today. this company has no clear -- fear of bolting onto other assets and going into areas where they don't feel they can develop on their own or by themselves. they are going to have to take a few little lessons from a company they are acquiring assets from today, valeant. we know that is a company that is overleveraged, driving up that's because it is making huge acquisitions. valeant is trying to get their

hands on the boat text -- botox maker for 50 billion. shares for nestlé are up .5% this morning. back to you. >> the cost of eternal youth. still with us is andy lynch. he is a management investor. what i would be to be a fly on the wall in an investment meeting greg d.c. deal after deal announced. what you talk about when you see these deals, the ge's? does it change your conversations? >> it does not because we are focused on return on capital employees. if a company comes in to us and says this is the acquisition we are proposing, this is why the returns we think we can make on this deal are well above our

cost of capital. we will be happy to support them in the same ways we would support them if they want to do and organic investment. if you're not going to make any money doing this deal, we might have a different conversation and politely suggest that maybe they should reconsider. >> and institutional investor politely suggesting something? >> yes. there was a frank discussion. >> all opinions were heard around the table. asia, six-month high. money coming back in. that is a broad sweep of bullishness. >> it is. what we are looking to do at the moment is move away from the more fixable stocks that have done so well on the expectation of global great recovery, which we are starting to see in the numbers. we move now towards some of the higher-quality names that have been left behind in the current market rally. historically, stocks have traded

on big premiums. that premium has now largely disappeared. you are able to buy higher-quality companies for the same price you can pay for western companies. that is our strategy, to rotate more back into the high-quality, high-return businesses because they are the ones that have the ability to keep on reinvesting that cash flow at high-returns in the future. >> i returns typically cost. whichin degrees -- industries should we look at for that strategy? >> the technology sector is a great example. quickly toe ability go from very small to very big and earn returns on very wide sales. it is the story of net worth of facts and social networks. those are really driving good returns. that, i think the

insurance sector make sense. maybe more of the pnc insurers. , peopleduration ensuring our homes and cars. >> the ecb was never so much expected and we have yet to find out what has been delivered. how do i invest on the proposition of his words? he has promised a lot. it is a question of timing on the delivery. how do you think we should invest? >> i think we will get direct action to weaken the exchange rate. i would be most surprised if they do it they start to sell euros and a market. that would be tantamount to declaring war. what they will do is printing some money to go and buy the government bonds, corporate bonds, and increase the money supply. they will weaken the exchange rate indirectly. what they want to do is get the exchange rate down. we are seeing that the strength

of the euro is stifling european exports and we are seeing japan weakening the yen, china is starting to move the rent bb down -- renminbi down. they need to get in this party as well. >> how low to the floor to they want to get? what is the ultimate paradigm? you have to have a model in their. -- there. >> if you look at the euro-dollar now and roll back 10 years, they were pretty much a parity. we're not saying it is going to get back there, but you could see $.10, $.15 come off the exchanges and that is a huge amount to the profit margins of people like alstrom. outside, are exporting everyone sent out the euro-dollar rate is a pure profit for them. >> i think we will leave it there. that is the ultimate objective,

as you say. you can turn currency into reality off of profit. that is what it means to the bottom line. andy, thank you very much. we will see you soon. andy lynch. thank you so much. let's bring you up to speed with companies on the move. rbs woke up hundreds of jobs in strict. that is ahead of federal rules from the feds. they plan to reduce their mortgage trading business by 2/3 and it will shift focus to other asset banks and securities as well as client financing. has been suspended after we are group says it abandoned pursuit of its fellow company. they would not engage in talks with the company. shares of jet airways india fell after the company posted a record quarterly loss and named

its fourth chief executive in less than a year. india's biggest rated carrier will implement tough measures to establish cost-cutting programs rate of glaxo's troubles hit home. allegations of bribery in china have come to the u.k. to launch criminal investigations into the drugmaker's practices. we will give you details. ♪

>> i am manus cranny. streaming the move online, on your tv, and on the amazon fire tv. here is one stock on the move. it is the dutch retailer. the stock is up 3.34%. -- down 3.34%. margins in the united states of america. if you are a stop and shop culture, you are not paying as much as you have to that at other stores. margins under pressure. online sales up, but overall sales dropping. ahold outperformed by raymond james. suspicious on the ability to deliver at the death rate taylor -- at the dutch retailer. glaxosmithkline will face a criminal row. it comes amid ongoing

investigations to bribery accusations in china. here with the story is caroline hyde. where are we with this? the chinese have been investigating. >> chinaeally serious has been investigating ten-month but there is no direct link between the office. we do know it is the first confirmation that there will be a criminal investigation into sales practices done by glaxosmithkline here in the u.k. the office will be doing be investigating. it does not say it is linked to china, but you think you -- have to think it is is because it was two weeks ago where the chinese police handed the chinese unit of glaxosmithkline the repercussions, the finding of a 10-month investigation into sales practices which they say allegedly were bribes, bribes to

doctors, trying to get them to use glaxosmithkline drugs. >> this was bribery in the old-fashioned censored they doctors -- allegedly, thank you for keeping me on track. it has impacted sales. there is an issue of trust here. >> we saw sales down about 10% last quarter. the profit was down 18% in their first quarter. this is not just china. we are seeing 46 employees identified in the chinese investigation. since that investigation started, we had alleged wrongdoings in lebanon, jordan, poland. this is not just going on in china, it is alleged. this is what the concern is in this is why lawyers have been saying the u.k. bodies, such as the sfo, u.s. bodies, such as the justice department, could

actually prosecute the going is on of glaxosmithkline units abroad. if there has been bribery, they could be legally hit. this is what is being opened up in the u.k. in 2010, 4 years ago, the u.s. justice department began analyzing drug companies and glaxo admitted it. held their hands up and paid a record $3 billion fine, saying, yes, we did illegally promote prescription drugs and failed to report safety data. >> what does it do for andrew witty? he says he was there to clean it up. >> in 2011, he started revising some of the u.s. sales representatives. so don't need to sell much if you want to get your bonus. it has not been implemented abroad quickly enough. we need to see how it impacts u.k. entities. >> let us leave it there.

east for an inside look at the recently annexed region. what is the price tag for russia? ♪

>> welcome back to "on the move ." i am manus cranny. 30 minutes into the trading day. equity markets are lightening up a little bit. we're coming off the six-year highs. -- >> in two words, deal breakdown.

we're abandons their chase of metso. mezzo management were not interested. he rejected the deal. you are seeing in unchanged price right there. they are set to continue trading. i will give you a price on the get it. look out for that one. they say was not in the best interest of holders. for knows -- for more news on that, you joe bost down two percent. prime era is selling a 5.6% stake. the stock takes a beating, down 3%. telecom italia up by 4%. goldman sachs loses market. they are on the potential for consolidation. since the stock higher. >> these are the bloomberg top headlines. deutsche bank has to expand at fixing trading in the united states were growth the strongest. that is in an exclusive move

would bloomberg. the moves are in response to a changing market. of issues that fixed income were facing. we position the bank well for a. i frankly would not depict what we are doing right now is a pushing or leaning. this is part of the natural cycle of the business. we have done very well in certain areas. others who rely to target incrementally. >> european leaders have aclined john paul younger quick endorsement as the next european commission. they won the most election seats in the election for european parliament. the call for a more centralized european union has called detractors when the anti-eu parties are showing gains. ukraine's government says it will press on with military operations against pro-russian

rebel fighters after a day of significant casualties. forces fought double -- dozens of rebels in donetsk. it may be internationally recognized that part of ukraine, but crimea post annexation starting to feel very russian. ryan chilcote reports. >> the trouble with crimea starts with getting their. at its narrowest point, the two mile body of water separated from russia. the roads that go through ukraine are all but close. theonly way to get from ukrainian mainland -- the russian mainland to crimea is to take this boat across the strait. aat is until russia builds bridge to span the difference. these russians are legally entering ukraine. no need for a passport. as far as they car concerned, this is a domestic crossing.

thissince russia annexed area, ukrainians have been somewhat struck -- stuck. >> the ukrainians are not allowing men between 18 the and 60 in ukraine. a call us terrorists. banksainian and foreign have closed while many of russia pothead yet to open. cash machine that credit cards do not work. even in the cradle of russian orthodoxy, prices are quoted in ukrainian money. golden arches and much more stand deserted. also visit were the

alleys that in world war ii. couple of months ago that americans could meet come without a vehicle. -- without a visa. under moscow control, not anymore. there was not any unrest while we were there, but russia is concerned there could be gathering of the region's muslim minority was banned. russia's newest tourist destination is breathtaking. but there are problems but need the service. ukrainians cut the water supply and further inland, they are expecting drought. most of me and say that even with all the trouble, it is a price worth paying. ryan joins us for more from kiev. you got a look at crimea

upfront. is this going to turn into a costly exercise? a lot of military and presence? will it be expensive for putin to maintain this? russian's own calculation, this will cost about $48 billion. people livinglion in crimea, 600,000 of which are pensioners. under ukrainian law, they were getting about $300 a month. now putin has already raised those pensions by about 50% and by july 1, he will double them again to bring them in line with russian pensions nationwide. in addition, you have state workers, about 150,000 of them. they will have their salaries brought in line with salaries across the entire russian federation. then you have the infrastructure investment. billions of dollars that bridge

-- billions of dollars. the bridge alone could cost -- billion.ion the biggest bank operating, when it left, it took depositors' money with it. russia is using their own deposit meant scheme to refund up to $20,000. you have the economic isolation of russia. there is capital flight out of russia. more than $50 billion this year. that does not help. it is fair to say this is a costly project. >> ryan, russia is still betting that it -- i get the geographic and geopolitical significance of crimea. they are betting that it will be a long-term asset for them, yes? >> i think so. i don't think the decision to take crimea was based on economics. they have two ideas. one is to make it into the las vegas of the black sea him a to

make a casino zone or russians will go to spend their money. the other ideas to turn it into singapore, where the best business practices, no corruption, the kind of things that russia at the moment is not known for to bring business there. having said that, you have to have a functional banking system for those things to happen. that is not going to happen overnight and certainly, international recognition that crimea is indeed part of russia would go a long way in making it recognize the russian economic goals in the crimean peninsula. >> thank you for that insight into crimea. ryan chilcote, lightning kiev. kiev.live in we will bring his exclusive interview with the ukrainian -- the crimean foreign minister.

more stories from the election over the weekend. right-leaning parties gained across europe and it is shaking the decision on the european commissioner's president. not everyone may be on with jean-claude's appointment. hans, i read two very different stories. angela merkel on her way in. angela merkel on her way out of this meeting. >> that is angela merkel for you. she is crafty about what her intentions are. that is the big question hanging over these negotiations. what is on glove merkel's true intention? -- on glove merkel -- angela merkel's true intention? decision at the end of june. she backs jean-claude, but she faces challenges from other members of his own party, including the prime minister of

hungry. cameron going into the meeting .as talking about juncker did not mention him by name but was also opposed. francois hollande of france has indicated that he could support juncker. ultz, the man that he technically beat, it was not a clause i run up by both parties had top candidates to challenge. he is now with juncker. he is left out there. he is the conservative candidate. his party came in first place. 34% when you aggregate all the totals. he does not have this locked up. it seems like there is a lot more horsetrading that will have to take place. >> let's see how this turns out. juncker will be lobbying hard. ♪

>> this is "on the move." welcome back.

fears of flotation fatigue may be hitting the european ipo market. low,piring prices price are the concerns overblown? joining us now is alastair worn and -- warren. great to have you with us. have we got fatigue? is the rush to the ipo market overdone? >> i think that the last few deals that have come to market -- the market environment will be tougher. we have had a couple of deals pulled. we have more deals priced in the bottom of the range and trade in a more difficult after market environment. i think the market has become more rational. investors are becoming more price sensitive, more selective. it does not mean the market is not working. i think they need to approach it in a more rational way. >> correct me if i'm wrong, but

i think that is a good thing. you see it little bit more demand for detail from the people that are issuing prospects to us. >> there is naturally a focus on ensuring that the disclosure is right. i think your point is a good thing. i think it makes a more sustainable. we have moved from a market where everyone was engaged around every situation where 21 where people are aching and choosing what they invest in. i think that makes it a more rational market. >> europe leads the pack. i'm not the best with the project, but according to the $32 billion, -- -- >> europe having gone to a slow. over the years, a lot of backlog of business is done. the inflow of dollars has flowed out. we were seeing $10 billion a month put into the market.

last month, it was down to about a billion. will that stay with the billion? i think it is an open flow and the u.s. is an important sort -- source of demand for the ipos. >> that takes me off in the direction of what impact it has for the currency. say they decide not to come to the market. what does it mean for private equity? with a look for more traders? they don't want to take the risk of the market and have employed at the last minute. does it create a better opportunity for trade value? >> in terms of valuations, they have adjusted downwards. ce is thehe consequen in af what can be achieved

trade ipo. as that gap has narrowed, you will see other straight into more responsive. it is a good thing for sponsors. wealth has been a great market for exits. it has been tough to deploy capital and getting that balance will be better overall. >> that is good for investors because you have an alternative market. you can go to pe rather than public market. we have had a wave of mna. week after week, they tussle to make them happen. where and how does deal flow play into the money that is available to play for private equity? >> as it has been well documented, there is a huge wall of so-called dry powder equity equity from private equity that is willing to be put to work. one of the challenges has been finding opportunities. newary deal flow, that is opportunities coming out of corporate spirit with the pickup

in strategic mna, the strategic will also pick up for sponsors. partly as a result of doing big deals, people decide to rationalize their portfolios, partly because there are antitrust deals required. overall, there will be more opportunity coming for private equity as a result of that last mna happening. >> we will leave it there. 6-9 month timeline. you will have a very busy back and of the everett thank you very much for coming in. "the pulse" is coming up in 12 minutes. what is big for you, olivia? >> we have a great show coming up on "the pulse." we will go back to kiev. we have another exclusive. newill be speaking to the

ukrainian foreign minister after reports that dozens of rebels have been killed. we will find out what his strategy is to combat the growing insurgency in the south and east and we will be going to paris where we will be talking about ge's $17 billion bid to bite alstrom -- buy alstrom. ceo going there himself and making overtures. the government says they perform -- prefer a bit from siemens. everyone is trying to cut rates move isll see if the prized and if there is any way to surprise the market. we will and the show on fashion. michael kors reports results later on this morning. expectations are huge following last quarter's result. 80% on theirped

last quarter earnings in february. expectations are high. we will ask him why kate spade and tory burch are snapping at his heels and what coach seems to be doing so wrong. coaches down 26% so far your today. >> thank you very much. i know that you have all those brands their and less quarterly numbers. coming up, welcome to russell street. it is the single most expensive strip of commercial in the world. ♪

>> welcome back to "on the move ." hong kong is home to the most expensive street in the world when it comes to commercial real estate value. betty liu took a tour of russell streets to find what a few million dollars would buy in real estate. it is not much. hong kong is a maze of stores. there are shops piled on top of shops. to help me sort through this is this guy, sam. great to see you greater >> welcome to hong kong. >> would you like to shop?

>> please. hong kong is where you come to shop if money is no object. cartier, rolex, they are here. the landlords collect some of the highest rents in the world. we are in front of the store that just sold for 23 million u.s. dollars. is that a record? >> i think that is the most expensive store bridges in the world today. how much would this get for rent? >> it is on the market for 400,000 hong kong a month. >> this store has to make $10,000 u.s. a day? and when the lease is up, they can expect to pay more early. >> russell street has transformed in the last two or three years. he goes from more mass-market stores from levi and mcdonald's, etc. is dotted withet high-fashion stores and jewelry shop.

the top 5th avenue for the most expensive in the world. paying sky-high rent is no problem for the luxury retailers. >> sales in hong kong are strong. >> you're saying that louis vuitton has six freestanding stores in hong kong. we can it we talking about 700 -- $600 million altogether to be generated in the city? >> the combined market -- i would not be surprised by those numbers. >> no wonder they want to come here. >> as a brand, it is a great place to be. >> we are getting breaking news on unemployment in germany. jonathan has joined me. rises byent actually 24,000. the market was looking for a drop of 15,000. this is a little bit of a surprise, given some of the confidence indicators. the unemployment rate stays the same. unemployment rises by 24,000. the market was looking for

15,000. growth slowing just a little bit rate you have the ukraine issue. >> you have to think about the context. to .7%. this is the lowest number since before the crisis anyways. that is a low unemployment rate. listening the past couple of days, s and d provides 80% of the employment across the eurozone. we talked about how financially constrained some of the sme's were. in spain, 25%. the read across is higher unemployment numbers as well. ,hen the credit demand picks up he wants the supply to be there. >> this is something that laurence byrne made in paris to margaret not just the constriction, but the cost. you are looking at 1.522% more expensive. -- 1.5 to 2% more expensive. a little bit of a jolt for the

market. another nail in the coffin for marriott draghi. we will leave it there. we will be back tomorrow. stay with bloomberg tv. ♪ . .

>> an unprecedented offensive. we bring you an exclusive interview with its foreign minister and rare access inside crimea. over who chiefs clash should take the top job after protest parties surged. president met the french president in paris to try to win the battle for alstom. ," live to "the pulse