A $14 billion merger, OK'd Sunday by their respective boards of directors, will be only the "first step" in the new strategy of German electric-utility and chemical conglomerates Veba and Viag, a senior executive said. Veba chairman Ulrich Hartmann said the combined company would seek to become a world player in the energy market, which has "a compulsion toward size." But the merger, reported last week, also is likely to result in an unspecified number of layoffs, analysts said. A new name has yet to be chosen for the company, which will be based in Dsseldorf, if shareholders and regulators also approve.
Political tensions that have been boiling for weeks spilled over into the trade arena as the Indonesian government announced it would work with importers to punish neighboring Australia. Australia is a major supplier of wheat to Indonesian mills, as well as sugar and cotton. But because of its criticism of Indonesian handling of the East Timor crisis - branded as overreacting by the Jakarta government - Trade Minister Rahardi Ramelan said alternative suppliers would be sought, among them China, India, Egypt, and the former Soviet republics of Uzbekistan and Kazakhstan. Anti-Australia demonstrations have been held almost daily in Jakarta.
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