In Nokia, Microsoft Bets on Apple-Like Revival

Spencer Platt/Getty Images

Steven A. Ballmer, left, Microsoft's chief executive, with Stephen Elop, the chief executive of Nokia who will rejoin Microsoft with the acquisition.

SEATTLE â€" With its purchase of Nokia’s phone business, Microsoft is taking inspiration from Apple’s way of making products, bringing hardware and software under a single roof where they can be more elegantly woven together.

Microsoft Gambles on Nokia Close Video See More Videos »

Steven A. Ballmer, left, Microsoft’s chief executive, with Risto Siilasmaa, chairman of Nokia, during Tuesday’s news conference.

But Microsoft already bears a striking resemblance to Apple â€" the Apple of two decades ago, not the trailblazer of the mobile era. The $7.2 billion Nokia deal, which was reached late Monday, is unlikely to change that and catapult Microsoft up the ranks in the smartphone market.

That is because Microsoft, with its Windows phone operating system, is stuck in third place in that market, where all the oxygen has been drained by more established players.

Apple and Google have won the hearts and minds of developers, who design the apps that lure consumers to their devices, while Samsung is the dominant maker of mobile phones, most of which run Google’s Android operating system. Even though Microsoft’s and Nokia’s products have won praise for their quality, they have arrived late.

“What matters is not the phone per se but a dynamic app and services ecosystem,” said Brad Silverberg, a former senior Microsoft executive who is now a venture capitalist in the Seattle area.

Microsoft’s predicament is a flashback to the situation Apple found itself in during the early 1990s. At that time, Apple arguably had a superior computer product, the Macintosh, but it languished as PCs running Microsoft’s Windows operating system engulfed most of the market. One of the biggest problems for Apple then was that Microsoft had succeeded in gaining the allegiance of software developers, who produced a bounty of applications.

“They’re stuck in the same vicious cycle that Apple was in 20 years ago,” said Benedict Evans, an analyst with Enders Analysis, a research firm, and a former strategist in the wireless industry.

The challenges for the marriage of Nokia and Microsoft go far beyond support from developers. Microsoft is in the midst of the biggest organizational changes in its 38-year history. In mid-July, Steven A. Ballmer, Microsoft’s chief executive, unveiled a plan to restructure the company’s often clashing fiefs into business groups intended to cooperate more.

While the new organization seemed to set up Mr. Ballmer as the maestro in charge of keeping the various groups in harmony, he stunned the tech industry late last month by announcing his plans to retire from Microsoft within 12 months. Mr. Ballmer said he was leaving earlier than planned because he felt the company needed a leader prepared to stay longer. That fueled speculation that Mr. Ballmer had been encouraged to leave by Microsoft’s board.

Blending a major acquisition into a company is challenging enough in times of calm. Doing so with the unexpected management change at Microsoft could make it even harder, tech industry executives and analysts said.

“The issue I wonder about is the amount of complexity Microsoft is taking on its business by absorbing Nokia at the same time it is reorganizing at the same time Windows 8 is faltering,” said Michael Mace, a former executive at Palm and Apple who now runs an app development company in Silicon Valley, Zekira. “It’s scary from that standpoint.”

While Mr. Ballmer plans to leave Microsoft after a successor is found, he was very much involved in cutting the Nokia deal. Over the last several months, Mr. Ballmer and his deputies met in places like Redmond, Wash., London and Helsinki with counterparts in the talks, led by Risto Siilasmaa, Nokia’s chairman. The style of Mr. Ballmer, an exuberant leader with a booming voice, was a stark contrast to the reserved, gentlemanly manner of Mr. Siilasmaa, according to a person present during many of the meetings.

Microsoft is under enormous pressure to reinvent itself for a world where mobile devices are the animating force in technology, rather than personal computers. Sales of PCs are suffering the most prolonged decline in their history. Two powerful pistons of Microsoft’s business â€" Windows and the Office suite of applications â€" are tied to closely to the health of the PC market.

A version of this article appears in print on September 4, 2013, on page B1 of the New York edition with the headline: In Nokia, Microsoft Bets on Apple-Like Revival.

Starboard Says It Is Working on Smithfield Bid

Open Letter to Shareholders of Smithfield Foods, Inc. Dear Fellow Shareholders: Starboard Value LP, together with its affiliates (“Starboard”), currently owns securities representing beneficial ownership of approximately 5.7% of Smithfield Foods, Inc. (“Smithfield” or the “Company”). We have been a shareholder of Smithfield since March 2013, several months prior to the announcement on May 29, 2013 that Smithfield and Shuanghui International Holdings Limited (“Shuanghui”) entered into a definitive merger agreement (the “Merger Agreement”) valuing Smithfield at approximately $7.1 billion, or $34.00 per share (the “Proposed Merger”). On June 17, 2013, we issued a letter to the Board of Directors of Smithfield (the “Board”) in which we expressed our views that (i) Smithfield could be worth well in excess of $34.00 per share, (ii) there were numerous interested parties for each of the Company’s operating divisions, and (iii) greater value could be realized by way of a piece-by-piee sale of the Company’s valuable, yet disparate, operating divisions to interested third parties. Subsequently, on July 12, 2013, we reported the engagement of Moelis & Company and Business Development Asia (BDA) to act as financial advisors to assist Starboard in identifying and connecting any third party strategic or financial buyers for Smithfield’s individual business units in an effort for such third parties to structure and deliver a collective, sumof the-parts transaction proposal to the Company that could qualify as a “superior proposal” under the Merger Agreement with Shuanghui. The purpose of our letter today is to provide shareholders of Smithfield with an update on our progress to date and to comment on the upcoming special meeting of shareholders, scheduled to be held on September 24, 2013 (the “Special Meeting”), at which shareholders will be asked to vote on the Proposed Merger. Over the past two months, with the assistance of our financial advisors, we have contacted numer! ous parties to explore their interest in participating in a buyer group for the purposes of making an alternative proposal to acquire Smithfield. We are pleased to report at this juncture that we have received non-binding written indications of interest from third parties, based on publicly available information, for each of Smithfield’s assets, which in the aggregate imply a total value for Smithfield at a price substantially in excess of the $34 cash deal with Shuanghui. Based on these indications of interest, we are currently in the process of working with the indicated buyers to construct an alternative all-cash proposal from a single entity for the acquisition of Smithfield that, we believe, could be deemed by the Board to be reasonably likely to lead to a superior proposal under the terms of the Merger Agreement with Shuanghui. This is the threshold

that an alternative bidder must meet in order for the Board to provide the alternative bidder with the due diligence required to finalize a superior proposal and negotiate a definitive agreement. Although we have come quite a long way in a short period of time, additional time is needed to complete the necessary work to convert the various non-binding indications of interest for pieces of Smithfield into a collective, alternative proposal to acquire all of Smithfield. While we are working hard to cause such a superior transaction proposal to be delivered, we cannot guarantee that we will be successful in doing so. Fortunately, in our view, the terms of the Merger Agreement with Shuanghui afford the flexibility for the additional time needed to complete this process and deliver a superior transaction proposal without jeopardizing the Proposed Merger. Under the terms of the Merger Agreement, November 29, 2013 is the “outside date” for the consummation of the Proposed Merger with Shuanghui, which is ore than two months from the date of the Special Meeting, scheduled to be held on September 24, 2013. The date of the Special Meeting is of critical importance since under the Merger Agreement the Board is only permitted to consider alternative acquisition proposals that are received prior to shareholder approval of the Proposed Merger at the Special Meeting. As a result of the foregoing, at this time we believe that our best course of action is to vote our shares ‘against’ the Proposed Merger. Based on the mechanics of the Merger Agreement, we do not believe that votes against the Proposed Merger at this time will impair or prevent the eventual approval and consummation of the Proposed Merger with Shuanghui if it ultimately proves to be the best deal available to shareholders. Apart from circumstances involving a breach by Smithfield of certain covenants or obligations under the Merger Agreement, Shuanghui is only permitted to unilaterally terminate the Merger Agreement if the Proposed Merger ha! s not been completed by the November 29, 2013 “outside date” or if the Special Meeting has concluded without shareholders having approved the Proposed Merger. Importantly, under the Merger Agreement, Smithfield has the ability to unilaterally postpone or adjourn the Special Meeting “to allow reasonable additional time to solicit additional proxies” if Smithfield has not received sufficient votes to approve the Proposed Merger. Otherwise, Smithfield is obligated to proceed to hold the Special Meeting, as scheduled. Therefore, in our view, by voting ‘against’ the Proposed Merger at the Special Meeting on September 24, 2013 we are voting in furtherance of trying to compel Smithfield to postpone or adjourn the Special Meeting for a period of time to allow it to continue soliciting votes in favor of the Proposed Merger. To be clear, this course of action would not give Shuanghui the ability to terminate the Merger Agreement since such right would only arise upon the conclusion of the Special Meeting ithout the Proposed Merger having received shareholder approval. By our voting in such a manner to trigger a postponement or adjournment of the Special Meeting, we are seeking additional time, if needed, to submit an alternative proposal to the Board at a substantially higher value than the Proposed Merger. Remember, if shareholders vote to approve the Proposed Merger at the Special Meeting on its scheduled date of September 24, 2013, and a superior 2

alternative transaction proposal has not been submitted to the Company before such time, the Board will no longer have a ‘fiduciary out’ and will no longer be able to consider any alternative proposals. Therefore, we intend to vote ‘against’ the Proposed Merger at this time, in order to leave open the possibility that all shareholders may receive higher consideration under an alternative transaction while still preserving our ability to vote ‘for’ the Proposed Merger, at a later time, should we for some reason not be able to ultimately deliver an alternative transaction proposal. To be clear, we are working with interested third parties to submit an alternative proposal, as expeditiously as possible, that we believe the Board should determine is reasonably likely to result in a superior proposal, thereby allowing for time to complete due diligence. Our ultimate objective is for a third party to deliver a binding definitive agreement in a form substantially similar to the existing Merger Ageement prior to the November 29, 2013 outside date. It is quite possible that an alternative proposal could be submitted prior to the currently scheduled Special Meeting to be held on September 24, 2013. However, we think it is crucial to recognize that the mechanics of the Proposed Merger give shareholders the ability to compel a temporary delay to the Special Meeting and that a vote ‘against’ the Proposed Merger at this juncture would not, in and of itself, create material risk to the eventual consummation of the transaction with Shuanghui should it ultimately prove to be the best deal on the table. The Board, however, cannot take these steps to adjourn or postpone the Special Meeting on its own. The Company has an obligation under the Merger Agreement to call, convene and hold the Special Meeting unless it needs additional time to solicit additional proxies in order to obtain shareholder approval. Despite what Smithfield may say in the coming weeks in order to scare shareholders into voting to! approve the Proposed Merger at the Special Meeting, we fully expect Smithfield to postpone or adjourn the Special Meeting immediately prior to the scheduled September 24, 2013 date if it does not have the votes to approve it, since failure to do so would give Shuanghui the ability to unilaterally terminate the Merger Agreement. As we have stated all along, Starboard is generally supportive of a sale of Smithfield. However, as disclosed in the background section of the merger proxy, we believe the Board failed to run a full and fair process to sell the Company, in whole or in part, to ensure that shareholders realized the highest possible price. It is our belief that the Proposed Merger undervalues Smithfield and that with more time an alternative proposal to the Board at a superior price for shareholders could be available. Based on the mechanics described above, it is our current intention to vote ‘against’ the Proposed Merger at this time. Should a superior third party acquisition proposal fail to maerialize, we fully intend to revise our voting intentions with regard to the Proposed Merger and change our vote to be in favor of the Proposed Merger at such time. Given the mechanics of the Merger Agreement and the fact that we have already received written indications of interest for each of Smithfield’s assets, which in the aggregate imply a total value for Smithfield at a price substantially in excess of the $34 cash deal with Shuanghui, we strongly believe that voting ‘against’ the Proposed Merger is our best course of action at this juncture. 3

We are working diligently to ensure that all shareholders of Smithfield receive full and fair value for their investment and will provide further updates as our work to produce an alternative proposal progresses.

Best Regards,

Jeffrey C. Smith Managing Member Starboard Value LP

About Starboard Value: Starboard Value LP is a New York-based investment adviser with a focused and differentiated fundamental approach to investing in publicly traded U.S. companies. Starboard invests in deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders. Investor Contacts: Gavin Molinelli, (212) 201-4828 Cristiano Amoruso, (212) 845-7947 www.starboardvalue.com

4

Thorny Side Effects in Silicon Valley Tactic to Keep Control

The gods of Silicon Valley have repeatedly sought to take the companies they founded public while retaining control as if they were still private.

Recent events at Google and other technology companies show that perhaps this control may be bad not only for the companies but also for the founders, who are increasingly living in a world bereft of checks and balances.

Silicon Valley has for the most part held public shareholders in mixed regard. Preferring to keep them on the sidelines is not a new development.

Google was a leader in this movement. When it went public in 2004, it did so using a dual-class structure. Its co-founders, Sergey Brin and Larry Page, were issued shares with 10 votes apiece, while public shareholders received shares with only one vote. The idea was to ensure that the co-founders kept control of Google even if they sold some of their shares.

But boundaries get pushed, as does everything in the tech world. Facebook went further in restricting shareholder control when it went public by adopting a dual-class structure that allowed its co-founder Mark Zuckerberg to keep control even if he owned less than 10 percent of the company. In fact, if Mr. Zuckerberg dies, his heirs still have the potential to control the company.

Putting this in perspective, had Apple gone public with Facebook’s structure, Steven P. Jobs’s widow, Laurene Powell Jobs, and Apple’s co-founder Steve Wozniak (most recently a “Dancing With the Stars” contestant) would possibly still be in control.

Not to be outdone, Google proposed last year that the company issue a new class of shares with no voting rights. According to public documents filed by Google, this share class was put into place at the behest of the founders, being justified by Mr. Brin and Mr. Page as allowing them to “concentrate on the long term.”

The idea is that absent the pressures of the public market, executives can look after the long-term best interests of the company. This will allow Google to experiment with things like Google Glass, which may not be immediately profitable.

It’s an alluring argument. On the plus side, this allows for the company to look out for a wide array of interests beyond shareholders’ that focus solely on stock price. In the media, this structure has worked with some success (The New York Times Company, for example, has a dual-class structure).

But the problem with this structure is that the shareholders’ voice of dissent is locked out. And studies have shown that in general, this type of dual-class structure does not perform as well as traditional arrangements.

Recent events raise another issue: technology companies have not done well in sustaining themselves when their founders leave.

Microsoft has struggled to find a path without Bill Gates at the helm. It recently cut deals with an activist shareholder, ValueAct Capital, to put a director from that fund on its board. And although Microsoft just announced a major strategic acquisition to buy Nokia’s handset and services business, a big question remains over who will lead Microsoft after Steve Ballmer steps down.

Apple is still a juggernaut, but it appears to be having its own sustainability issues without Mr. Jobs. Older stalwarts like Hewlett-Packard have also struggled to adjust their business model years after their founders’ departure.

Even when the founders stay, it hasn’t always been a happy outcome. One of Yahoo’s founders, Jerry Yang, led the company when it rejected a buyout offer from Microsoft at $31 a share in 2008 (the company’s shares subsequently fell to below $10 a share amid the financial crisis, recovering only last year after Yahoo brought on Marissa Mayer as chief).

Mr. Yang was subsequently replaced as chief executive. Two recent initial public offerings, those for Groupon and Zynga, proceeded with dual-class share structures, and both trade below their offering prices.

In Silicon Valley, founders’ control has not always translated into the long-term success. In fact, control may have nothing to do with it. One of Silicon Valley’s most successful companies these days is Amazon, based in Seattle. Jeffrey P. Bezos, chief of Amazon, owns only 19.1 percent of the company, according to its most recent proxy statement. He has seen no need to create a special share class to lock in his control.

There is perhaps another bigger problem with the dual-class structure in tech companies. This grab for control may exacerbate the bad effects from the culture of worship that surrounds these founders, leaving no one with the capacity to take over when they leave.

The concept is ubiquitous in psychology. People surrounded by no boundaries tend to overestimate their limits. Studies of chief executive behavior have found that the bosses tend to overestimate their confidence and take more risks, and they are more narcissistic.

In plain English, the great tech minds of Silicon Valley are told so often how great they are that they sometimes lose perspective.

This is not to say that these executives are not doing great things. Let’s acknowledge that they are brilliant at creating new technology and changing our lives.

But over the last few months, it feels as if Silicon Valley were taking on the hubris and attention-grabbing acts more commonly associated with Wall Street.

For instance, Sean Parker, the first president of Facebook, threw a wedding with a “Lord of the Rings” theme that was featured in Vanity Fair and widely criticized as being lavishly over the top. Elon Musk created media hype after he revealed the plans for a high-speed transit device between San Francisco and Los Angeles that looked more like a sci-fi gun that shoots out people. Ms. Mayer of Yahoo posed for a fashion shoot in Vogue, accompanied by a sidebar discussing high-end fashion options titled “What Would Marissa Wear?”

You can’t help wondering whether Silicon Valley lacks any balance.

As recent salacious developments at Google show, it can sometimes also lead to foolhardy decisions. Last week, AllThingsD reported that Mr. Brin had split with his wife and was dating a Google employee. Dating employees is always dicey, and although Google’s handbook does not forbid these things, it is clear that many a chief executive would be felled by similar behavior (like Brian Dunn, Best Buy’s ex-chief executive, who resigned amid questions about his “personal conduct”).

Google got the green light to issue nonvoting shares after the settlement of a lawsuit challenging the maneuver, a settlement that is awaiting final judicial approval. The issuance of the Series C shares with no vote will cement the founders’ control. But does Google really need to do this, and what are the real consequences?

At the time of the settlement, Google stated, “We’ve always believed our founder-led approach gives us the freedom to make long-term bets, like Android, Chrome and YouTube, that benefit consumers and shareholders alike.”

Perhaps it is time to take a step back. Google can surely solidify control with its founders in other ways.

Google’s board should consider the long-term effects of this class of stock, not only on the ability of the company to find leaders for its future but also on the psyche of its founders. Even for the gods of Silicon Valley, it may be good to set limits.

The Microsoft-Nokia Deal: Risks and Messiness

September 3, 2013, 5:11 pm

By now, perhaps you’ve heard: Microsoft just bought Nokia’s cellphone division for $7.2 billion.

When I mentioned the news last night on Twitter (I’m @pogue), my followers were hilariously unimpressed:

- “I thought you were supposed to jettison cargo from a sinking ship.” (@jbs4526)

- “Oh great. Now, with even better spying capabilities!” (@rolfje)

- “Neither one wants to die alone.” (@packetlevel)

- “Finally, the public’s yearning for a Zune-Surface smartphone may be realized.” (@MarvK)

It’s all snarky but true. What on earth was Steve Ballmer, the departing Microsoft chief, thinking? What is the point of this deal?

Let’s go right to the source: “With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in FY15,” Mr. Ballmer said in the news release. (Or, rather, didn’t say. Nobody talks like that.)

But so far, he hasn’t exactly specified how owning Nokia’s cellphone business will make Microsoft-Nokia phones any more attractive to consumers than they are now.

After all, Microsoft and Nokia have already been working closely together for the last few years. Both companies are already doing their absolute best to produce superb phones â€" and mostly succeeding â€" but consumers still aren’t buying them. Nokia’s Windows Phone phones have about a 3.5 percent market share in the United States; it’s slightly higher in Europe.

Meanwhile, there’s a serious risk to this purchase: disgruntling the other cellphone companies that make Windows phones. Samsung and HTC can’t be thrilled that the maker of Windows Phone software will now manufacture its own cellphones. Can Microsoft, with a straight face, really claim that its own phone engineers don’t have easier access to Microsoft’s software engineers? That they won’t know stuff sooner than Samsung and HTC will? That Microsoft won’t consciously or unconsciously promote its own brand over Samsung and HTC?

It will get very, very messy, and the whole thing is probably doomed.

Years ago, Palm, the maker of the PalmPilot organizers, faced exactly the same problem. Palm wanted to license the Palm software to other hardware makers, while simultaneously selling its own Palm-branded organizers. The only way to solve the conflict was to split the company in two â€" one for licensing, one for Palm-branded hardware. Which was a disaster. So then the company merged back together again. Which was also a disaster.

All of that chaos exacted a terrible price in expenses, talent and morale. The complications blossomed, the company was sold off, and today, Palm no longer exists.

As this article points out, Google bought Motorola’s phone company a few months back, too, but didn’t absorb it; indeed, Google avoided the disgruntled-Android-partner problem by explicitly keeping Motorola a separate entity with a “firewall” to prevent it from getting inside access to Android information. Microsoft is doing nothing similar.

Microsoft’s DNA was formed around Windows. And with Windows, Microsoft succeeded by introducing something quick and sloppy â€" and then refining, refining, refining until it achieved world domination.

But Microsoft just doesn’t seem to understand that the hardware world doesn’t work that way. Things move too fast. By the time you’ve refined, refined, refined, you’re a bit player struggling for market scraps. You’d think the company would have learned that from the expensive lessons of the disastrous Zune music player, the disastrous Windows Kin phones and the disastrous Surface tablets.
Could it really be that Microsoft thinks that the touch-screen phone story will play out any differently?

No way. If you were only at 3 percent before, despite putting your best and brightest engineers together with Nokia’s, then paying $7 billion for Nokia won’t change anything. This is a goofball purchase that will have absolutely zero impact on Windows Phone’s fortunes in the world â€" except perhaps to sink them entirely.

Nobody knows who will replace Mr. Ballmer as the chief executive of Microsoft. But this much we do know: That poor soul will inherit quite a mess.

Eventbrite Strikes First Two Deals, Buying Startups Abroad

Leading Global Ticketing Platform Starts the Acquisition Engine as It Zooms In on International Expansion, Mobile Development and Event Discovery

SAN FRANCISCO, CA--(Marketwired - Sep 3, 2013) - Eventbrite, the global self-service ticketing platform, today announced it has acquired London-based event data company Lanyrd, and Argentinean-based ticketing company Eventioz. These acquisitions -- the first for the company -- will bring powerful product and technical assets to the leading events platform, as well as strong industry expertise in a new region, Latin America. 

Together, these acquisitions directly reflect the areas of focus the company announced with its $60 million funding news in April: Accelerating international expansion; mobile growth and development; event discovery; and attracting top talent from around the world. This news also follows several senior leadership hires, and a March announcement that the platform had processed over $1.5 billion in gross ticket sales. Eventbrite has also processed 130 million tickets in 179 countries.

"For seven years, Eventbrite has focused on creating, scaling and promoting the best ticketing platform on the market. Now it's time for us to open our pocketbooks a bit to accelerate our growth around the world," said Kevin Hartz, Eventbrite Co-Founder and CEO. "These two acquisitions perfectly align with the strategic focus for the company, while adding significant assets and technical power to our platform."

Lanyrd
Lanyrd, a social conference directory based in London, allows users to add and discover events as well as track friends' professional event activity. The company was founded in 2010, and has helped nearly 40,000 events in 148 countries have a better and more social event experience. Specifically, Lanyrd's product allows speakers and attendees easy access to event information, slides and video of presentations in a seamless, cross-platform experience. The team also has impressive technology credentials, boasting the co-creator of the Django web framework, the creator of the Django data migration tool South who is also a Django core committer, and substantial expertise in mobile development. The Lanyrd team will relocate to Eventbrite's headquarters in San Francisco to be part of the 100+-strong engineering effort, as well as leverage their technical expertise to help Eventbrite speed innovation in the core platform and improve its mobile products. Eventbrite will contine to support Lanyrd.com and its community after the acquisition.

"Lanyrd is an incredibly impressive product and engineering team that has been continually innovating crowd sourced event data for three years. The team's efforts in tagging and structured data around live experiences is incredibly valuable to us as we dig further into event discovery, the buyer-seller experience and organizer analytics," said Pat Poels, vice president of engineering at Eventbrite. "Further, Eventbrite also will benefit from Lanyrd's mobile development and product expertise as we seek to make our own offerings the best in the world -- no matter what device you are using. Finally, since Eventbrite uses the Django framework, having the co-creator on board as well as other leaders in Django and the open source movement will up our game and help us attract the best talent."

"The Eventbrite team shares the same passion for live events that drove us to create Lanyrd in the first place," said Natalie Downe, co-founder of Lanyrd. "We are thrilled to join a company with such strong engineering talent and believe we can contribute significantly to its product." Co-Founder Simon Willison continues, "Both companies believe in the power of shared experiences and we look forward to being part of an effort to use technology to improve how we discover and enjoy live events."

Eventioz
Eventioz is a Latin American ticketing platform with operations in Argentina, Brazil, Chile, Colombia, Mexico and Peru. Since the business started in 2008, it has helped more than 15,000 organizers create, promote and sell tickets to nearly 20,000 events. Eventioz is operated by an impressive, cross-functional team with substantial experience both in and outside of the event industry. Eventioz was co-founded by a successful serial entrepreneur and a world-class engineer who has historically been one of the top code contributors to the Ruby on Rails web framework.

"While there are a lot of country-specific competitors to Eventbrite throughout the world, Eventioz has built one of the few truly cross-border platforms," said Randy Befumo, vice president strategy at Eventbrite. "Further, Eventioz covers an impressive array of payment alternatives in a region where traditional credit cards and bank accounts do not offer much advantage. This will allow Eventbrite to enter multiple markets simultaneously with the right mix of local language, local customer support and payment alternatives. We think this is a team that can drive tremendous growth and look forward to putting our knowledge and capital behind them with the goal of winning across Latin America."

"With Eventbrite, we get to help the leading self-service ticketing platform expand its global reach," said Pablo Aquistapace, co-founder of Eventioz. "Personally, I also am excited to work with the Eventbrite team, and am particularly honored that someone as experienced at identifying great companies and management teams as Kevin Hartz has asked us to join his company. We think that with Eventbrite's support, we will be the leader in the Latin American market in short order, as well as contributing to the development of the platform globally."

These acquisitions crown a year of rapid growth for Eventbrite. In Q2, Eventbrite announced that it had processed over 100 million tickets across 179 countries, totaling more than $1.5 billion in gross ticket sales. One-third of those ticket sales had occurred within the previous 9 months. The company also announced in March that it had doubled the total number of tickets processed -- to 100 million -- since February 2012. These milestones confirm the large, underpenetrated and global market for ticketing as well as the universal need for an easy-to-use and scalable platform for event organizers and attendees around the world. 

About Eventbrite:
Eventbrite enables people all over the world to plan, promote, and sell out any event, and has sold 130 million tickets worldwide. The online event registration service makes it easy for everyone to discover events, and to share the events they are attending with the people they know. In this way, Eventbrite brings communities together by encouraging people to connect through live experiences. Eventbrite's investors include DAG Ventures, Sequoia Capital, T. Rowe Price, Tenaya Capital and Tiger Global. Learn more at www.eventbrite.com.

For Microsoft, Nokia Deal Was a Long and Arduous Process

By buying Nokia’s handset business, Microsoft may have strengthened its control over the destiny of its mobile operations and gained a potential new chief executive.

But completing the $7.2 billion transaction, the technology giant’s second-biggest after the acquisition of Skype, was a lengthy process that was anything but straightforward, people briefed on the matter said on Tuesday.

Steven Ballmer, Microsoft’s chief executive, first approached Nokia about a deal during the Mobile World Congress industry conference in Barcelona earlier this year. He emphasized to Stephen Elop, his counterpart at Nokia since 2010, that the software company needed to continue its hardware evolution by developing smaller handsets.

Integrating hardware and software, in the mold of Apple Inc., was an important priority. But Microsoft also wanted to ensure that Mr. Elop, a former executive, would come along as part of the deal. Nokia at that point felt that Mr. Elop was compromised and arranged for Riisto Siilasmaa, the Finnish company’s chairman, to take over negotiations.

Still, the prospect of Nokia shedding its core historical business â€" the longtime pride of Finland â€" weighed heavily on the company. But the board sought to maximize value for shareholders, rather than letting pure nationalism govern their decisions. Over all, Nokia’s directors met around 50 times in person to discuss virtually every angle of the deal, from valuation to the potential impact on the handset unit’s 32,000 workers.

Much of the discussions were held directly between Mr. Ballmer and Mr. Siilasmaa, who met discreetly around the globe in London, New York, Helsinki and Seattle, among other cities. The negotiations featured a disparity of styles: Mr. Ballmer was his famously demonstrative and energetic self, while Mr. Siilasmaa was more reserved and polite.

The talks moved deliberately, with both sides taking time to figure out how the new structure would work and figure out how to unravel the commercial agreements.

Earlier this summer, talks between the two sides cooled, as the complexities of the transaction took a toll. They resumed in July, with a broad agreement on the principles of the transaction reached by the end of that month.

For Microsoft, Nokia Deal Was a Long and Arduous Process

By buying Nokia’s handset business, Microsoft may have strengthened its control over the destiny of its mobile operations and gained a potential new chief executive.

But completing the $7.2 billion transaction, the technology giant’s second-biggest after the acquisition of Skype, was a lengthy process that was anything but straightforward, people briefed on the matter said on Tuesday.

Steven Ballmer, Microsoft’s chief executive, first approached Nokia about a deal during the Mobile World Congress industry conference in Barcelona earlier this year. He emphasized to Stephen Elop, his counterpart at Nokia since 2010, that the software company needed to continue its hardware evolution by developing smaller handsets.

Integrating hardware and software, in the mold of Apple Inc., was an important priority. But Microsoft also wanted to ensure that Mr. Elop, a former executive, would come along as part of the deal. Nokia at that point felt that Mr. Elop was compromised and arranged for Riisto Siilasmaa, the Finnish company’s chairman, to take over negotiations.

Still, the prospect of Nokia shedding its core historical business â€" the longtime pride of Finland â€" weighed heavily on the company. But the board sought to maximize value for shareholders, rather than letting pure nationalism govern their decisions. Over all, Nokia’s directors met around 50 times in person to discuss virtually every angle of the deal, from valuation to the potential impact on the handset unit’s 32,000 workers.

Much of the discussions were held directly between Mr. Ballmer and Mr. Siilasmaa, who met discreetly around the globe in London, New York, Helsinki and Seattle, among other cities. The negotiations featured a disparity of styles: Mr. Ballmer was his famously demonstrative and energetic self, while Mr. Siilasmaa was more reserved and polite.

The talks moved deliberately, with both sides taking time to figure out how the new structure would work and figure out how to unravel the commercial agreements.

Earlier this summer, talks between the two sides cooled, as the complexities of the transaction took a toll. They resumed in July, with a broad agreement on the principles of the transaction reached by the end of that month.

AT&T Should Resist Buying Spree

Verizon just put AT&T’s acquisition willpower to the test. Growth in the United States mobile market is slowing, and as AT&T learned the hard way, competition concerns preclude any transformative domestic deals.

Vodafone’s newly lined pockets, following the $130 billion sale of its 45 percent stake in Verizon Wireless, could tempt AT&T’s chief executive, Randall Stephenson, to make a big move overseas now. But the fat margins at home and the perils of cross-border M.&A. make a stronger case for discipline.

Gross margins of nearly 60 percent at AT&T reflect the functional duopoly it enjoys alongside Verizon. Unfortunately, the market is maturing. Sales of iPhones and other handsets are only increasing by about 2 percent a year, according to Moffett Research. The burst of revenue from data flowing over its network is also slowing down.

AT&T’s recent success, largely thanks to its early relationship with Apple on smartphones and tablets, could represent an opportunity. It might replicate its experience by acquiring operators in Europe and elsewhere globally that have been slower to roll out advanced LTE networks.

Moreover, the company’s stock is valued at 12.8 times estimated earnings for the next 12 months, or about 15 percent higher than the average European telecommunications company, according to Thomson Reuters. Spain’s $63 billion incumbent Telefonica, for example, trades at a multiple of about 9.6 forward earnings. That makes AT&T shares a potentially attractive currency overseas. And Verizon’s plan to borrow $60 billion is a reminder that credit is plentiful - and isn’t getting any cheaper.

Operating in a heavily regulated industry far from home isn’t easy, though. European regulators are often tougher on prices. Cost-cutting is limited when networks don’t overlap and unions make it hard to pare jobs. Competition is also fierce. Vodafone’s successful experience with Verizon Wireless is an exception to the cross-border rule, as the British company’s mediocrity in other far-flung endeavors attests.

A more restrained dalliance would be a better option for AT&T. It could offer its data experience to rivals in exchange for chunks of equity in joint ventures. Mr. Stephenson has at times seemed itchy to do a deal. Verizon’s mega-transaction represents a chance to show how restraint can be the best response.

Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

JP Morgan Case Tests U.S. Law on Buying Influence Abroad

Reports that JP Morgan Chase hired scores of children of powerful government officials throughout Asia have put the bank squarely in the sights of the United States government for violating the Foreign Corrupt Practices Act. The investigation will test how broadly the law applies to almost commonplace conduct by firms seeking any small advantage over rivals to win business from foreign governments.

Texas Hedge Fund Takes a Big Stake in J.C. Penney

Kyle Bass, the outspoken Texas hedge fund manager, has taken a bullish view on J.C. Penney, disclosing that his fund, Hayman Capital Management, has accumulated a 5.2 percent stake in the struggling retailer.

Mr. Bass, who made $500 million shorting the housing market during the financial crisis, has joined an investment fund founded by George Soros and Perry Corp in owning some of the biggest stakes in the retailer.

Hayman Capital’s stake was disclosed in a filing with the Securities and Exchange Commission on Tuesday morning. News of his position comes weeks after a rival hedge fund manager, William A. Ackman of Pershing Square Capital Management, resigned from J.C. Penney’s board and moved to sell his 18 percent stake in the company at a loss of nearly $500 million.

Mr. Ackman, who first emerged as a large investor in J.C. Penney three years ago, had been agitating for change at the top. In 2011, he moved to install Ron Johnson, the Apple executive credited with building its retail strategy, as chief executive. However, Mr. Johnson’s attempt to turn the company around by getting rid of its discount sales, among other things, failed and the board fired him. He was succeeded his predecessor, Myron E. Ullman III, on an interim basis.

During Mr. Johnson’s tenure, J.C. Penney’s shares declined by as much as 40 percent as the company continued to lose market share to its main competitors, Macy’s and Kohl’s, and the business became unprofitable.

This summer, Mr. Ackman engaged in a public and bitter battle with the board, calling for J.C. Penney’s chairman, Thomas J. Engibous, to be replaced. The standoff culminated with Mr. Ackman’s resignation on Aug. 13. A week later, he sold his shares for $12.90 each, representing a 3.4 percent discount to their closing price the day before. He lost about $473 million.

Soros Fund Management holds a 9.1 percent stake, while Perry Corp recently increased its stake to 8.6 percent from 7.3 percent earlier this summer, according to Bloomberg data.

J.C. Penney’s shares, which have fallen more than 50 percent this year, rose 1.9 percent on Tuesday and were trading at $12.72 per share.

AMC Aims to Raise $400 Million in I.P.O.

A year after being acquired by the Wanda Group, AMC Entertainment Holdings is looking to go public.

AMC, the second-largest movie theater owner in North America, is aiming to raise up to $400 million in an initial public offering, according to a regulatory filing on Friday. That amount, however, may change; the company did not specify the number of shares it planned to sell or the price.

An I.P.O. would be the latest corporate maneuver for AMC, which last year was sold to Wanda, a Chinese conglomerate with extensive holdings in the entertainment business, for about $2.6 billion, including the assumption of $2 billion in debt. At the time of the deal, Wang Jianlin, the chairman and president of Wanda, said he aimed to own theaters covering 20 percent of the world theater market by 2020.

AMC said it planned to use the proceeds from an I.P.O. in part for capital expenditures and reducing debt. The company reported $2.2 billion of total debt as of June 30.

A giant in the movie theater business â€" with 343 theaters that it owned, operated or held interests in as of June 30 â€" AMC is centering its strategy on a “pivot towards quality,” it said in the filing. Last year, the company attracted 200 million guests to its theaters, generating $2.7 billion of revenue, an increase of 10.8 percent from the year earlier, the company said.

The filing on Friday is AMC’s third attempt in recent years to sell its shares to the public. After a private equity buyout in 2004, AMC moved toward an I.P.O. but canceled those plans in 2007 because of adverse market conditions, it said at the time.

The company again filed for an I.P.O. in 2010, but it was in preliminary talks with Wanda at the time, and a public offering never happened.

The Wanda Group, a privately held conglomerate, is primarily a developer and owner of commercial real estate, but it has holdings in the entertainment, retail and hospitality industries. It has been trying in recent years to bolster its presence in the United States.

In the latest filing, AMC did not specify which banks would underwrite an I.P.O. The company said it intended to list on the New York Stock Exchange under the ticker symbol “AMC.”

Datto, a Data Backup Service, Raises $25 Million in Round Led by General Catalyst

Helping companies protect and restore their data is a growing business. Now, a six-year-old start-up is aiming to get a bigger piece of the action.

Datto, which provides both local and cloud-based data backup and continuity services, plans to announce on Tuesday that it had raised $25 million in its first-ever round of venture capital financing, led by General Catalyst Partners.

Steve Herrod, a managing director at General Catalyst, and Paul Sagan, the executive vice chairman of Akamai Technologies, will join Datto’s board.

The financing is the latest bet that cloud computing â€" relying on an array of remote servers to power a dizzying number of computing services â€" will help transform data backup and recovery.

Datto is aimed at companies who generally can’t afford the traditional, expensive data backup and continuity offerings. By keeping smaller businesses up and running longer, argued the company founder, Austin McChord, they can better compete against their larger rivals as society becomes less tolerant of downtime and user outages.

“This is something new, with more availability of something that before only the biggest of big companies could take care of,” Mr. McChord said in a telephone interview. “Instead, we can provide a service and make it available for businesses that are much smaller.”

Among Datto’s current clients are Susan G. Komen for the Cure, the breast cancer research foundation, and several National Football League teams.

“These are companies that were used to having coffee wipe out their machines. Before, they were resigned to losing some data,” Mr. Sagan said in an interview. “But the cloud levels the playing field, so even small and medium-sized companies can compete on a global scale.”

Founded in 2007, Datto has grown to about 225 employees and counts customers on six continents without help from venture capital firms. While the company doesn’t disclose its financial information, it boasts of having posted four consecutive years of 300 percent annual growth.

But Mr. McChord said that a push to significantly expand internationally unearthed a colleague’s connection to a General Catalyst co-founder, David Fialkow, which led to meetings with the venture capital firm.

Mr. Sagan added that after having stepped down as Akamai’s chief executive earlier this year, he had been looking to invest in young entrepreneurs focused on information technology services. Mr. Fialkow, a longtime acquaintance, introduced him to Mr. McChord.

“He’s gotten great growth and impressive sales in four years from a standing start,” Mr. Sagan said of Mr. McChord. “Austin has created a new model.”

Mr. McChord, who will remain Datto’s biggest shareholder, said that he would continue to focus on his international expansion plans, particularly Western Europe,. He said that he wasn’t looking to take it public or look for a sale in the near term.

“We’re focused on growing,” he said.

Mr. Sagan added, “My advice is, if the company’s successful, the future takes care of itself.”

Morning Agenda: Microsoft’s Nokia Deal

Microsoft has reached an agreement to acquire the handset and services business of Nokia for about $7.2 billion, an audacious effort to reshape itself for a mobile era that has largely passed it by, Nick Wingfield reports in The New York Times. Microsoft and Nokia said 32,000 Nokia employees would join Microsoft as a result of the all-cash deal, which makes the Finnish mobile phone pioneer the engine for Microsoft’s mobile efforts.

The deal also gives Microsoft a potential successor to Steven A. Ballmer, Microsoft’s chief executive, who will retire within 12 months: Stephen A. Elop, a former Microsoft executive who was running Nokia until the deal was signed, will rejoin Microsoft after the transaction closes.

“This agreement is really a bold step into the future for Microsoft,” Mr. Ballmer said by phone from Finland. “We’re excited about the talent capabilities it will bring to Microsoft.”

VERIZON SEALS $130 BILLION VODAFONE DEAL  | Verizon Communications agreed on Monday to take full control of its wireless unit for $130 billion, in a bet that the American desire for cellphones and broadband services was still far from being sated, Michael J. de la Merced and Mark Scott report in DealBook. The deal, more than a decade in the making, allows Verizon to take advantage of receptive debt markets and its own strong stock to buy out its longtime partner, Vodafone of Britain. It also leaves Vodafone flush with cash to reinvest in its own businesses and buy competitors.

While the roughly 100 million Verizon Wireless customers probably will not see any immediate changes in service, the telecommunications industry is very much in flux, with new competitors like SoftBank of Japan in the market and new opportunities for wireless services emerging, DealBook writes. In light of those trends, Verizon deemed it essential to gain control of its biggest business, which in the most recent quarter accounted for $20 billion of the company’s nearly $30 billion in revenue. Among the company’s plans is bundling mobile broadband services with wired offerings like high-speed, fiber-optic connections.

“There’s a big phase of growth in the U.S. telecom market,” Lowell C. McAdam, Verizon’s chief executive, said in an interview. “The timing was perfect for us.” Under the terms of the deal, Verizon agreed to pay $58.9 billion in cash and an additional $60.2 billion worth of its shares to Vodafone, the latter of which will be distributed to Vodafone’s shareholders.

The banks helping to arrange and finance the transaction are eager to take part in a bonanza of fees, Mr. de la Merced reports. Advisers to Verizon could earn $110 million to $125 million, while bankers for Vodafone could reap $100 million to $118 million, according to estimates from Freeman & Company. In addition, with roughly $60 billion in financing, bankers could enjoy well over $150 million in fees for arranging the debt.

A LOOK BEHIND MCKINSEY’S SUCCESS  | The management consulting firm McKinsey & Company has been the go-to strategy adviser for the world’s top companies. “So why has its advice, at times, turned out to be so bad?” Andrew Ross Sorkin writes in the DealBook column. “It often goes unmentioned, but McKinsey has indeed offered some of the worst advice in the annals of business.”

“A thought-provoking new book called ‘The Firm: The Story of McKinsey and Its Secret Influence on American Business,’ which comes out next Tuesday, offers a fascinating look behind the company’s success,” Mr. Sorkin writes. “The book, by Duff McDonald, chronicles McKinsey’s rise, but also raises an important question about it that is applicable to the entire netherworld of consultants, advisers and other corporate hangers-on: ‘Are they worth it or not?’”

ON THE AGENDA  | The ISM manufacturing index for August is out at 10 a.m. Data on construction spending in July is out at 10 a.m. H&R Block reports earnings after the market closes.

MADOFF TRUSTEE ADDS DETAILS TO SUIT  | J. Ezra Merkin, a prominent Wall Street financier who had earned a fortune investing his clients’ money with Bernard L. Madoff, “willfully blinded” himself to numerous indications that Mr. Madoff was a con man, according to new claims in a lawsuit filed on Friday in Federal District Court in Manhattan by the trustee for victims of Mr. Madoff’s fraud. The filing includes details of a 2003 meeting between Mr. Merkin and a research company in which Mr. Merkin admitted that he did not fully understand Mr. Madoff’s business and questioned its legitimacy, Peter Lattman reports in DealBook.

“Despite Merkin’s knowledge that Madoff was running a Ponzi scheme, that Bernard L. Madoff Investment Securities was a fraud, and that Madoff could not have achieved his incredible returns, Merkin never pressed Madoff for an explanation but instead participated in Madoff’s fraud,” wrote the trustee, Irving L. Picard, in the amended complaint, which updated an action originally filed in 2009.

Mergers & Acquisitions »

Bank of America Seeks Up to $1.5 Billion for China Construction Bank Stake  |  Bank of America is following other Wall Street banks in seeking to cash out of what have been very profitable investments in China’s sprawling and state-controlled banking industry. DealBook »

Yankee Candle Is Said to Be Sold for $1.75 Billion  |  The private equity firm Madison Dearborn Partners has agreed to sell the scented candle company Yankee Candle to the Jarden Corporation, a consumer products maker, according to The Wall Street Journal, which cites unidentified people familiar with the matter. WALL STREET JOURNAL

Takeover Bid for Chinese Food Company Rebuffs Short-Seller Attack  |  Shares in the China Minzhong Food Corporation, targeted last week by the California short-seller Glaucus Research Group, surged 112 percent after the company received a $576 million takeover offer from Indofood Sukses Makmur. DealBook »

Rakuten of Japan Is Said to Be Buying a Video Site for $200 Million  |  The Japanese e-commerce giant Rakuten is purchasing Viki, a premium video site, Rakuten’s chief executive told Kara Swisher of AllThingsD. The price is $200 million, according to the report, which cites unidentified people with knowledge of the situation. ALLTHINGSD

Cumulus Media to Buy Dial Global, a Radio Syndicator  |  The $260 million deal could heighten the competition in radio against Clear Channel Communications. NEW YORK TIMES

A Lesson for Boardroom Battles  |  A proxy battle involving an Israeli company listed in the United States could serve as a lesson for how the proxy access rule could be used as a weapon in boardroom battles, Steven M. Davidoff writes in the Deal Professor column. DealBook »

INVESTMENT BANKING »

Barclays to Sell Retail Bank in United Arab Emirates  |  “Following a strategic review, Barclays has decided to refocus its efforts in the U.A.E. on its key strengths in corporate and investment banking and wealth and investment management,” Barclays said in a statement on Tuesday. REUTERS

Barclays Rights Offering May Coincide With Lehman Anniversary  |  Barclays is set to begin a roughly $9 billion rights offering in two weeks, “possibly on the fifth anniversary of its takeover of the U.S. operations of Lehman Brothers, people familiar with the matter said on Monday,” Reuters reports. REUTERS

A Suicide Clouds a Top Banker’s Image  |  Josef Ackermann’s resignation from the Zurich Insurance Group after the suicide of the chief financial officer “interrupted a career spent fearlessly shaking up the European business world and advocating American-style standards of corporate performance,” The New York Times writes. NEW YORK TIMES

A Sign of Confidence Among London’s Financial Firms  |  With London’s financial services companies looking to hire in investment banking and trading, job vacancies increased 16 percent last month, according to the recruitment firm Astbury Marsden, Bloomberg News reports. BLOOMBERG NEWS

Anglo Irish Bank’s Art Collection on the Block  |  The sale of the collection will pave the way for the sale of the bank’s other assets, The Financial Times reports. FINANCIAL TIMES

Barclays Hires Former Morgan Stanley Equity Strategist in Japan  | 
BLOOMBERG NEWS

PRIVATE EQUITY »

Three Investment Veterans Plan to Raise a New Fund  |  Three investment professionals formerly of the Blackstone Group, Temasek Holdings and Goldman Sachs “are raising a maiden fund targeting $300 million on behalf of their new firm Zoyi Capital, according to a person familiar with the situation,” The Wall Street Journal reports. WALL STREET JOURNAL

Qatar Fund Said to Have Big Hiring Plans  |  By hiring senior bankers and other executives, Qatar’s sovereign wealth fund is looking to lessen its reliance on Europe, Reuters reports. REUTERS

HEDGE FUNDS »

With Huge War Chests, Activist Investors Tackle Big Companies  |  Activist hedge funds are taking on larger companies and seeking long-term change over short-term profit, unlike raiders of the past.
DealBook »

Activist Looks to Shake Up Board of Billabong  |  Coastal Capital International, a Billabong investor, is pushing for shareholders to vote on removing most of the Australian company’s directors, The Wall Street Journal reports. WALL STREET JOURNAL

I.P.O./OFFERINGS »

Twitter’s Finance Chief Said to Talk With Banks Over I.P.O.  |  Mike Gupta, Twitter’s chief financial officer, is talking to banks about handling the company’s initial public offering, Bloomberg News reports. “Twitter is awaiting third-quarter financial results before deciding whether to file the I.P.O. paperwork with regulators this year or next, said people who asked not to be identified because the plans are confidential,” the report continues. BLOOMBERG NEWS

VENTURE CAPITAL »

In Silicon Valley, Wall Street-Style Excess  |  “It feels as if the promise of the tech world â€" its utopian ideals and democratic aspirations â€" has dissolved into much more selfish pursuits of power and wealth,” Jenna Wortham writes in a column in The New York Times. NEW YORK TIMES

LEGAL/REGULATORY »

Former Chinese Railroad Official Indicted on Bribery Charges  |  A former high-ranking Chinese railroad official, whose daughter’s employment at JPMorgan Chase is a focus of an antibribery investigation in the United States, has been formally indicted on bribery charges in a Beijing court. DealBook »

With Summers Expected at the Fed, Stimulus Easing Is Seen  |  “The spreading expectation that President Obama will name Lawrence H. Summers to lead the Federal Reserve Board appears to be working against the central bank’s efforts to stimulate the economy,” The New York Times reports. “The jitters even have some analysts betting that a Summers nomination could lead to slower economic growth, less job creation and higher interest rates than if the president named Janet L. Yellen, the Fed’s vice chairwoman.” NEW YORK TIMES

As Comptroller, Thompson Gave Work to Donors  |  William C. Thompson Jr., who was New York City’s comptroller until 2009, “reaped political gains from those he awarded city business,” The New York Times writes. NEW YORK TIMES

Basel Committee Eases Rule on Derivatives  |  Reuters writes: “Global regulators have eased the impact of new rules designed to make the $630 trillion derivatives market safer as they seek to avoid too-tight controls on the sector that some banks argue could harm economic recovery.” REUTERS

Former Goldman Trader Fined $500,000  |  A former Goldman Sachs trader who pleaded guilty in a criminal case earlier this year to fabricating huge positions to protect his bonus agreed on Friday to pay a $500,000 fine in a related civil matter. DealBook »

Tax Haven Closes for Wealthy Americans  |  A tax deal reached between Switzerland and the United States on Thursday effectively put an end to the status of the small Alpine country as a tax haven for wealthy Americans. DealBook »

Morning Agenda: Microsoft’s Nokia Deal

Microsoft has reached an agreement to acquire the handset and services business of Nokia for about $7.2 billion, an audacious effort to reshape itself for a mobile era that has largely passed it by, Nick Wingfield reports in The New York Times. Microsoft and Nokia said 32,000 Nokia employees would join Microsoft as a result of the all-cash deal, which makes the Finnish mobile phone pioneer the engine for Microsoft’s mobile efforts.

The deal also gives Microsoft a potential successor to Steven A. Ballmer, Microsoft’s chief executive, who will retire within 12 months: Stephen A. Elop, a former Microsoft executive who was running Nokia until the deal was signed, will rejoin Microsoft after the transaction closes.

“This agreement is really a bold step into the future for Microsoft,” Mr. Ballmer said by phone from Finland. “We’re excited about the talent capabilities it will bring to Microsoft.”

VERIZON SEALS $130 BILLION VODAFONE DEAL  | Verizon Communications agreed on Monday to take full control of its wireless unit for $130 billion, in a bet that the American desire for cellphones and broadband services was still far from being sated, Michael J. de la Merced and Mark Scott report in DealBook. The deal, more than a decade in the making, allows Verizon to take advantage of receptive debt markets and its own strong stock to buy out its longtime partner, Vodafone of Britain. It also leaves Vodafone flush with cash to reinvest in its own businesses and buy competitors.

While the roughly 100 million Verizon Wireless customers probably will not see any immediate changes in service, the telecommunications industry is very much in flux, with new competitors like SoftBank of Japan in the market and new opportunities for wireless services emerging, DealBook writes. In light of those trends, Verizon deemed it essential to gain control of its biggest business, which in the most recent quarter accounted for $20 billion of the company’s nearly $30 billion in revenue. Among the company’s plans is bundling mobile broadband services with wired offerings like high-speed, fiber-optic connections.

“There’s a big phase of growth in the U.S. telecom market,” Lowell C. McAdam, Verizon’s chief executive, said in an interview. “The timing was perfect for us.” Under the terms of the deal, Verizon agreed to pay $58.9 billion in cash and an additional $60.2 billion worth of its shares to Vodafone, the latter of which will be distributed to Vodafone’s shareholders.

The banks helping to arrange and finance the transaction are eager to take part in a bonanza of fees, Mr. de la Merced reports. Advisers to Verizon could earn $110 million to $125 million, while bankers for Vodafone could reap $100 million to $118 million, according to estimates from Freeman & Company. In addition, with roughly $60 billion in financing, bankers could enjoy well over $150 million in fees for arranging the debt.

A LOOK BEHIND MCKINSEY’S SUCCESS  | The management consulting firm McKinsey & Company has been the go-to strategy adviser for the world’s top companies. “So why has its advice, at times, turned out to be so bad?” Andrew Ross Sorkin writes in the DealBook column. “It often goes unmentioned, but McKinsey has indeed offered some of the worst advice in the annals of business.”

“A thought-provoking new book called ‘The Firm: The Story of McKinsey and Its Secret Influence on American Business,’ which comes out next Tuesday, offers a fascinating look behind the company’s success,” Mr. Sorkin writes. “The book, by Duff McDonald, chronicles McKinsey’s rise, but also raises an important question about it that is applicable to the entire netherworld of consultants, advisers and other corporate hangers-on: ‘Are they worth it or not?’”

ON THE AGENDA  | The ISM manufacturing index for August is out at 10 a.m. Data on construction spending in July is out at 10 a.m. H&R Block reports earnings after the market closes.

MADOFF TRUSTEE ADDS DETAILS TO SUIT  | J. Ezra Merkin, a prominent Wall Street financier who had earned a fortune investing his clients’ money with Bernard L. Madoff, “willfully blinded” himself to numerous indications that Mr. Madoff was a con man, according to new claims in a lawsuit filed on Friday in Federal District Court in Manhattan by the trustee for victims of Mr. Madoff’s fraud. The filing includes details of a 2003 meeting between Mr. Merkin and a research company in which Mr. Merkin admitted that he did not fully understand Mr. Madoff’s business and questioned its legitimacy, Peter Lattman reports in DealBook.

“Despite Merkin’s knowledge that Madoff was running a Ponzi scheme, that Bernard L. Madoff Investment Securities was a fraud, and that Madoff could not have achieved his incredible returns, Merkin never pressed Madoff for an explanation but instead participated in Madoff’s fraud,” wrote the trustee, Irving L. Picard, in the amended complaint, which updated an action originally filed in 2009.

Mergers & Acquisitions »

Bank of America Seeks Up to $1.5 Billion for China Construction Bank Stake  |  Bank of America is following other Wall Street banks in seeking to cash out of what have been very profitable investments in China’s sprawling and state-controlled banking industry. DealBook »

Yankee Candle Is Said to Be Sold for $1.75 Billion  |  The private equity firm Madison Dearborn Partners has agreed to sell the scented candle company Yankee Candle to the Jarden Corporation, a consumer products maker, according to The Wall Street Journal, which cites unidentified people familiar with the matter. WALL STREET JOURNAL

Takeover Bid for Chinese Food Company Rebuffs Short-Seller Attack  |  Shares in the China Minzhong Food Corporation, targeted last week by the California short-seller Glaucus Research Group, surged 112 percent after the company received a $576 million takeover offer from Indofood Sukses Makmur. DealBook »

Rakuten of Japan Is Said to Be Buying a Video Site for $200 Million  |  The Japanese e-commerce giant Rakuten is purchasing Viki, a premium video site, Rakuten’s chief executive told Kara Swisher of AllThingsD. The price is $200 million, according to the report, which cites unidentified people with knowledge of the situation. ALLTHINGSD

Cumulus Media to Buy Dial Global, a Radio Syndicator  |  The $260 million deal could heighten the competition in radio against Clear Channel Communications. NEW YORK TIMES

A Lesson for Boardroom Battles  |  A proxy battle involving an Israeli company listed in the United States could serve as a lesson for how the proxy access rule could be used as a weapon in boardroom battles, Steven M. Davidoff writes in the Deal Professor column. DealBook »

INVESTMENT BANKING »

Barclays to Sell Retail Bank in United Arab Emirates  |  “Following a strategic review, Barclays has decided to refocus its efforts in the U.A.E. on its key strengths in corporate and investment banking and wealth and investment management,” Barclays said in a statement on Tuesday. REUTERS

Barclays Rights Offering May Coincide With Lehman Anniversary  |  Barclays is set to begin a roughly $9 billion rights offering in two weeks, “possibly on the fifth anniversary of its takeover of the U.S. operations of Lehman Brothers, people familiar with the matter said on Monday,” Reuters reports. REUTERS

A Suicide Clouds a Top Banker’s Image  |  Josef Ackermann’s resignation from the Zurich Insurance Group after the suicide of the chief financial officer “interrupted a career spent fearlessly shaking up the European business world and advocating American-style standards of corporate performance,” The New York Times writes. NEW YORK TIMES

A Sign of Confidence Among London’s Financial Firms  |  With London’s financial services companies looking to hire in investment banking and trading, job vacancies increased 16 percent last month, according to the recruitment firm Astbury Marsden, Bloomberg News reports. BLOOMBERG NEWS

Anglo Irish Bank’s Art Collection on the Block  |  The sale of the collection will pave the way for the sale of the bank’s other assets, The Financial Times reports. FINANCIAL TIMES

Barclays Hires Former Morgan Stanley Equity Strategist in Japan  | 
BLOOMBERG NEWS

PRIVATE EQUITY »

Three Investment Veterans Plan to Raise a New Fund  |  Three investment professionals formerly of the Blackstone Group, Temasek Holdings and Goldman Sachs “are raising a maiden fund targeting $300 million on behalf of their new firm Zoyi Capital, according to a person familiar with the situation,” The Wall Street Journal reports. WALL STREET JOURNAL

Qatar Fund Said to Have Big Hiring Plans  |  By hiring senior bankers and other executives, Qatar’s sovereign wealth fund is looking to lessen its reliance on Europe, Reuters reports. REUTERS

HEDGE FUNDS »

With Huge War Chests, Activist Investors Tackle Big Companies  |  Activist hedge funds are taking on larger companies and seeking long-term change over short-term profit, unlike raiders of the past.
DealBook »

Activist Looks to Shake Up Board of Billabong  |  Coastal Capital International, a Billabong investor, is pushing for shareholders to vote on removing most of the Australian company’s directors, The Wall Street Journal reports. WALL STREET JOURNAL

I.P.O./OFFERINGS »

Twitter’s Finance Chief Said to Talk With Banks Over I.P.O.  |  Mike Gupta, Twitter’s chief financial officer, is talking to banks about handling the company’s initial public offering, Bloomberg News reports. “Twitter is awaiting third-quarter financial results before deciding whether to file the I.P.O. paperwork with regulators this year or next, said people who asked not to be identified because the plans are confidential,” the report continues. BLOOMBERG NEWS

VENTURE CAPITAL »

In Silicon Valley, Wall Street-Style Excess  |  “It feels as if the promise of the tech world â€" its utopian ideals and democratic aspirations â€" has dissolved into much more selfish pursuits of power and wealth,” Jenna Wortham writes in a column in The New York Times. NEW YORK TIMES

LEGAL/REGULATORY »

Former Chinese Railroad Official Indicted on Bribery Charges  |  A former high-ranking Chinese railroad official, whose daughter’s employment at JPMorgan Chase is a focus of an antibribery investigation in the United States, has been formally indicted on bribery charges in a Beijing court. DealBook »

With Summers Expected at the Fed, Stimulus Easing Is Seen  |  “The spreading expectation that President Obama will name Lawrence H. Summers to lead the Federal Reserve Board appears to be working against the central bank’s efforts to stimulate the economy,” The New York Times reports. “The jitters even have some analysts betting that a Summers nomination could lead to slower economic growth, less job creation and higher interest rates than if the president named Janet L. Yellen, the Fed’s vice chairwoman.” NEW YORK TIMES

As Comptroller, Thompson Gave Work to Donors  |  William C. Thompson Jr., who was New York City’s comptroller until 2009, “reaped political gains from those he awarded city business,” The New York Times writes. NEW YORK TIMES

Basel Committee Eases Rule on Derivatives  |  Reuters writes: “Global regulators have eased the impact of new rules designed to make the $630 trillion derivatives market safer as they seek to avoid too-tight controls on the sector that some banks argue could harm economic recovery.” REUTERS

Former Goldman Trader Fined $500,000  |  A former Goldman Sachs trader who pleaded guilty in a criminal case earlier this year to fabricating huge positions to protect his bonus agreed on Friday to pay a $500,000 fine in a related civil matter. DealBook »

Tax Haven Closes for Wealthy Americans  |  A tax deal reached between Switzerland and the United States on Thursday effectively put an end to the status of the small Alpine country as a tax haven for wealthy Americans. DealBook »