VW Plunges 20% After U.S. Accuses Emission Violations

Nigel Thomas
21 Sep, 2015
New York City

Volkswagen faces as much as 18 billion in fines for falsifying emission data for diesel-powered passenger cars. Deutsche Wohnen agreed to acquire LEG Immobilien. Dialog Semiconductor agreed to acquire the U.S.-based Atmel. Zurich Insurance terminated merger talks with RSA.

[R]4:00 PM Frankfurt – Volkswagen faces as much as 18 billion in fines for falsifying emission data for diesel-powered passenger cars. Deutsche Wohnen agreed to acquire LEG Immobilien. Dialog Semiconductor agreed to acquire the U.S.-based Atmel. Zurich Insurance terminated merger talks with RSA.[/R]

In London trading, FTSE 100 index gained 31.72 or 0.5% to 6,113.20 and in Frankfurt the DAX index rose 17.85 or 0.2% to 9,933.85.

In Paris, CAC 40 index jumped 48.86 or 1.1% to 4,584.58.

Deutsche Wohnen AG plunged 6.9% to €22.38 after the Germany-based residential property developer agreed to acquire smaller rival LEG Immobilien AG for €79:37 per share or €4.6 billion, a premium of 13% to the closing price before the deal announcement.

Under the terms, shareholders of LEG Immobilien will receive 33 Deutsche Wohnen shares for each of 10 LEG shares.

After the merger, the combined portfolio of 250,000 residential units worth about €17 billion.

The transaction is expected to close by the end of this year.

LEG Immobilien AG stock jumped 4.6% to €73.48.

Dialog Semiconductor Plc plunged 20.1% to 36.20 after the Germany chip maker agreed to acquire the U.S.-based rival Atmel Corporation for $10.42 per share or about $4.6 billion in cash and stock.

The shareholders of Atmel will receive $4.65 in cash per share based on Dialog''s closing price of September 18, a 43% premium of Atmel’s current price of $7.27 per share.

The transaction will create a power management and embedded processing solutions provider with an estimated combined revenue of about $2.7 billion.

Atmel Corporation stock surged 16.2% to $8.45.

PureCircle Limited jumped 3.2% to 405 pence after the Malaysia-focused food ingredients maker said revenues in the year ending in June soared 26% from a year ago to US$127.4 million.

Net profit in the year doubled from a year ago to $4.1 million compared to $2.3 million and diluted earnings per share increased to 2.42 cents from 1.37 cents.

The company plans to apply for a listing and to trade on the London Stock Exchange''s main market.

Suez Environnement Company SA gained 0.5% to €16.37 after the France-based water and waste-management utility provider today agreed to acquire the remaining 40% stake in the Australia-based waste management business Sembsita Pacific Pte Ltd from Singapore-listed Sembcorp Industries Ltd. for $349 million or A$485 million.

The transaction is expected to close in the fourth-quarter.

RSA Insurance Group plc tumbled 20.5% to 405.50 after Zurich Insurance Group AG terminated its merger talks with the company and said it no longer intends to make an offer.

Last month, the Switzerland-based insurer offered 550 pence per share to RSA at the time of a preliminary offer.

Telford Homes Plc increased 2.6% to 410.25 pence after the U.K.-based residential property developer agreed to acquire regeneration unit from United House Group Holdings Limited for £22.97 million on a debt free basis.

Volkswagen AG plummeted 20% to €129.90 after the Germany-based automaker was alleged by the U.S. regulatory authorities for falsifying emissions data for diesel-powered vehicles.

The U.S. officials said the company violated two parts of the Federal Clean Air Act and may face penalty of as much as $37,500 per car or more than $18 billion.

Volkswagen’s chief executive officer Martin Winterkorn apologized that ""I am personally deeply sorry that we have broken the trust of our customers and the public.""

Martin expressed an apology for violating customers'' trust and asked its U.S. dealers to halt sales of certain 2015 and 2016 models containing the four-cylinder two-liter TDI diesel engine passenger cars.

The company said it has started investigation to measure toxic emissions.

The company also ordered an external investigation into the matter, these may affected approximately 482,000 diesel-powered cars.