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Power Games
When Electricité de France, the world's largest power provider, snapped up a stake in Italy's energy firm Edison in 2001, it got a nasty shock: Rome capped EDF's voting rights in Edison at a measly 2%. Their claim: the French market wasn't open to competition. (EDF owns 18% of Italenergia, a holding company with a 62% stake in Edison.) But last

INDICATORS Running Out Of Energy A Houston judge rejected Yukos' bid for U.S. bankruptcy protection. The beleaguered Russian oil firm sought shelter last December in an attempt to block the sale of its core production unit. The decision clears the way for the merger of Russian gas major Gazprom with Rosneft, Russia's state oil company that acquired Yukos' prized asset. What Mettle! Shares in European steel producers were dented after two of the world's largest mining companies negotiated a 72% hike in iron ore prices with Japanese steel mills. The agreements were interpreted as a sign of broader increases to come in the cost of iron ore, a key component in steel production. Delayed Reaction German carrier Lufthansa said it was considering suing authorities for air-traffic disruption caused by the arrival of George W. Bush at Frankfurt Airport last week. The airline claimed the hub was affected for twice as long as originally planned.

week, EDF president Pierre Gadonneix and Paolo Scaroni, head of Italy's state-owned utility ENEL, agreed to develop joint projects in France and Europe, including those in the nuclear sector. An end to the static? One Italian exec familiar with the negotiations dismisses the plan as little more than a p.r. move, and says it's too early for Rome to consider lifting the cap. And onerous put options may yet force EDF to exit Italy.

But Italian utilities might want to buy a piece of Italenergia and that "could get the French off the hook," says the exec. Still, if that eases pressure to reform, consumers may lose; Fabrizio De Candia, European power director at Cambridge Energy Research Associates in Paris, says Italian power prices are up to 40% higher than Western Europe's average. Now that's a real shock. — With reporting by Jeff Israely

Alternative Medicine
What's the remedy for growing pains in the global pharmaceutical sector? For Novartis, it's generic: the Swiss firm last week swallowed Germany's Hexal and America's Eon Labs for $8.4 billion, forging them into its existing Sandoz unit to create the world's largest manufacturer of off-patent, copycat drugs. A slide in blockbuster drug approvals in recent years — combined with the expiration of patents protecting a wave of branded drugs introduced in the '80s — has helped make generics big business. Government encouragement of the sector means off-patent drugs account for more than half of the U.K. and U.S. markets by volume. Novartis CEO Daniel Vasella reckons the sector will be worth $100 billion by 2010. But other Big Pharma firms have sold out of the low-margin generics business in recent years — so is Novartis risking an overdose? In a sector where "the cost of production is really important," says Frances Cloud, senior pharmaceutical analyst at Nomura in London, at least "being big does help."

The Bottom Line
	We believe we have the potential to earn more out of Macau than from Las Vegas
		WILLIAM WEIDNER, president and COO of Las Vegas Sands, which is planning to open its second casino in the Chinese territory in 2007