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China's nascent aviation industry is getting a boost from U.S. regulators in its bid to go global. The Federal Aviation Administration signed a pact with Chinese regulators that effectively opens the door for China-made aircraft and parts to be sold around the world. Although real sales remain a long way off, the WSJ's Trefor Moss writes the agreement advances Beijing's hopes of eventually becoming a global aerospace supplier and breaking into a market nominated by Boeing Co. and Airbus SE. That would mark a big change in the direction of aerospace trade, where the U.S. now holds an enormous trade surplus with China. The country is a big market for Boeing and for several of its suppliers, but China is developing a commercial jet and components to crack into the market. The new agreement signed just ahead of President Donald Trump's visit to China offers an area of cooperation as Mr. Trump is expected to bring a tough message on the balance of trans-Pacific trade.
CVS Health Corp. is looking to take its pharmacy business outside its storefronts with next-day delivery of prescription medication. The drugstore giant is acting as it faces declining retail sales and potential competition from Amazon.com Inc., the WSJ's Sharon Terlep reports, and will take on tough new logistics demands as it seeks to maintain its hold on a market central to its business model. CVS isn't saying what company it's pairing with to offer nationwide distribution, or how it will fulfill the same-day delivery it is offering in some urban areas. The company says its scale will "secure a low-cost, competitive option" that customers will pay for. Distribution of prescription drugs is sure to be more complicated than delivery of conventional consumer goods. But with CVS's sales already declining, the company can't afford to be a holdout in the push toward home delivery that is taking in most of the retail world.
This is turning into the year of the deal in the transport and logistics sector. New regulatory mandates and growing cash stockpiles from stronger shipping demand have been pushing big trucking companies and private-equity firms to buy up smaller operators, and several players look to be preparing even more acquisitions. Reuters reports there have been 44 announced deals involving freight transport and logistics companies in the U.S. so far this year, more than the 38 deals announced in all of 2016. The impending rule requiring trucks use electronic logging devices is helping drive some deals, as smaller operators struggle to make the needed investment. Bigger operators are already equipped, meantime, and are being buoyed by the strongest surge in shipping in three years. The buying binge also may be resuming soon in the logistics sector: XPO Logistics Inc. has some $8 billion lined up for possible deals, while Echo Global Logistics Inc. is looking at smaller "tuck-in" buys.
MERGERS & ACQUISITIONS
Upheaval in technology may be triggering new consolidation among key suppliers in the sector. Broadcom Ltd.'s unsolicited $105 billion takeover bid for Qualcomm Inc. is the chip industry's boldest bet yet to build scale, the WSJ's Ted Greenwald reports, and would mark the biggest technology takeover ever if it can clear big regulatory hurdles. The companies are among suppliers being buffeted by new demands in the smartphone world along with intense competition in the budding business of providing technology for new autonomous vehicles. Two other industry heavyweights, longtime rivals Intel Corp. and Advanced Micro Devices, struck a deal this week to work together on laptop-computer chips in a move to block competitor Nvidia Corp. The tie-up highlights how chip giants are looking for areas to cooperate as developments in consumer products and new technologies make their extensive and high-value supply chains more complicated.
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IN OTHER NEWS
The dollar rose to a nearly eight-month high against Japan's yen. (WSJ)
The Commodity Futures Trading Commission fined Cargill Inc. $10 million for improperly valuing swap trades. (WSJ)
German candy maker Haribo is investigating suppliers following allegations of slave labor at Brazilian plantations. (Daily Mail)
Chinese online car retailing platform Yixin Group launched an initial public offering in Hong Kong aimed at raising $870 million. (South China Morning Post)
Cosco Shipping International Co. is bidding to buy logistics providers Cogent Holdings of Singapore and Indonesia's PT Ocean Global. (Business Times)
Ocean carrier Matson Inc.'s third-quarter net profit rose 35% to $34.1 million in part on stronger China expedited service. (Honolulu Star-Bulletin)
BNSF Railway's net profit rose 2% in the third quarter to $1.04 billion. (Progressive Railroading)
Ryder System began taking delivery of electric cargo vans from China-based Chanje. (Fleet Owner)
Less-than-truckload carrier YRC Worldwide Inc. is adding 1,300 new trucks by the end of the fourth quarter. (Logistics Management)
Seven California port-trucking drivers paid as independent contractors but allegedly treated as employees have filed state wage-theft claims. (Commercial Carrier Journal)
Kuwait-based logistics provider Agility's third-quarter net profit rose 17.4% on a 15% gain in revenue. (Kuwait Times)
Cheap bulk shipping rates from Canada have California companies importing construction materials that are available within the state. (Los Angeles Times)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at email@example.com
(END) Dow Jones Newswires
November 07, 2017 07:08 ET (12:08 GMT)