Buffett, Brazil's 3G team up for $23 billion Heinz buyout

(Reuters) - Warren Buffett and Brazilian financier Jorge Paulo Lemann are teaming up to buy ketchup maker H.J. Heinz Co for $23.2 billion, in what could be the first step of a wave of mergers for the food and beverage industry.

Analysts and people close to the deal said Heinz could be a good starting point to consolidate similar staple food companies, particularly given the larger ambitions of Lemann's private equity firm 3G Capital.

Including debt assumption, Heinz valued the transaction, which it called the largest in its industry's history, at $28 billion. Buffett's Berkshire Hathaway and 3G will pay $72.50 per share, a 19 percent premium to the stock's previous all-time high.

Heinz shares initially rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid and the stock fell back below that mark by midday. The stock has been on a tear, almost doubling over the last four years, though analysts said the price seemed fair.

They also said the deal could be the first step in a broader wave of mergers for the food and beverage industry.

"Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense," Edward Jones analyst Jack Russo said.

Companies like General Mills and Campbell Soup - itself long seen as a potential Heinz merge partner - rose on the news.

Any acquisition could help Heinz further diversify and broaden its international profile. It already dominates the ketchup business, with a nearly 26 percent share of the global market and a 59 percent share domestically, according to Euromonitor International.

The company actually generates the largest portion of its sales in Europe, though its traditional North American consumer products business is the most profitable.

But its real growth engine has been the Asia/Pacific region, where sales increased nearly 11 percent in the last fiscal year, in part on demand for sauces and infant foods in China.

BUFFETT HUNTING GROWTH

The surprise purchase satisfies, at least in part, Buffett's hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two unnamed deals in excess of $20 billion and said he might have to do a $30 billion deal this year to help fuel Berkshire's growth engine.

In a regulatory filing late on Thursday, Berkshire said it was providing $12.12 billion in equity, including common stock, warrants and preferred shares with a liquidation preference of $8 billion and a 9 percent dividend.

Barclays Capital's Jay Gelb the deal's valuation appeared high at 19 times Heinz's expected 2014 earnings per share, but that it would enhance Berkshire's consumer portfolio.

Berkshire Hathaway already has a variety of food assets, including Dairy Queen ice cream chain, chocolatier See's Candies and food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz's products already and that this was "my kind of deal."

It does represent an unusual teaming of Berkshire with private equity, though; historically, Buffett's purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December.

One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically.

"We're a little hesitant on the staple companies because they don't have any leverage in the United States," said Bill Smead, chief investment officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a "home run."

A second investor, Michael Yoshikami of Destination Wealth Management in Walnut Creek, California, said he liked the purchase because it provided cash flow for other deals.

"This is a better use of cash than current money market instruments," said Yoshikami, the firm's CEO and chairman of its investment committee.

3G EXPANDS

For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake.

Historically, 3G was more of an investor than an acquirer. Its biggest shareholdings include Delphi Automotive, Newell Rubbermaid and Anadarko Petroleum.

Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev. Forbes ranks him as the world's 69th-richest billionaire, with a fortune of $12 billion.

3G's Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference on Thursday with Heinz management to discuss the deal - and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy.

But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations.

PITTSBURGH ROOTS

Also to be determined is whether CEO Bill Johnson would stay on. Only the fifth chairman in the company's history, Johnson is widely credited with Heinz's recent strong growth.

"I am way too young to retire," he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz's future management.

The company, known for its iconic ketchup bottles, Heinz 57 sauces as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row.

Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners.

That would imply roughly $6 billion to $7 billion of new debt needs to be raised.

Heinz shares soared 19.9 percent, or $12.02, to $72.50 on the New York Stock Exchange.

A week ago the stock hit a long-term high of $61 a share - near records it set in 1998 - having risen almost 5 percent this year and nearly 12 percent since the beginning of 2012.

The Heinz Endowments, a pillar in Pennsylvania philanthropy, said the sale of the company would have virtually no impact on their work. Heinz shares represent just over 1 percent of the endowment's $1.4 billion in holdings.

The deal is also a potential boon for new U.S. Secretary of State John Kerry, whose wife, Teresa, is the widow of H.J. Heinz Co heir John Heinz. Kerry's most recent financial disclosures from his time in the U.S. Senate show a position in Heinz shares of more than $1 million, although the precise size is unclear.

Centerview Partners and BofA Merrill Lynch were financial advisers to Heinz, with Davis Polk & Wardwell LLP the legal adviser. Moelis & Company was financial adviser to the transaction committee of Heinz's board and Wachtell, Lipton, Rosen & Katz served as its legal adviser.

Lazard served as lead financial adviser. J.P. Morgan and Wells Fargo also served as financial advisers to the investment consortium. Kirkland & Ellis LLP was legal adviser to 3G Capital, and Munger, Tolles & Olson LLP was legal adviser to Berkshire Hathaway.

(Additional reporting by Olivia Oran and IFR's Stephen Carter in New York and Drew Singer in Pittsburgh; Editing by Maureen Bavdek and Leslie Gevirtz)

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Report: Jerry Buss hospitalized with cancer

LOS ANGELES (AP) — Lakers owner Jerry Buss has been hospitalized with cancer, the Los Angeles Times reported Thursday.

The 79-year-old Buss has spent time in the intensive care unit at Cedars-Sinai Medical Center, according to the Times, which quoted Buss' son, Jim, Thursday saying his father was "doing fine." Several current and former Lakers players, including Kobe Bryant and Magic Johnson, have visited Buss.

Team spokesman John Black said the team has no plans to comment on Buss' health out of respect for the family's wishes. Buss spokesman Bob Steiner said information would have to come from the Lakers.

"Dr. Jerry Buss, thinking about u & wish I could be there, get well soon," former Lakers center Shaquille O'Neal tweeted Thursday. "I cant wait 2 see u on 4/2/13 (hash)LoveYou."

The Lakers will retire O'Neal's No. 34 jersey on April 2.

Buss has been hospitalized several times in recent years, including a stint last July for dehydration. He was treated for blood clots in his legs in December 2011.

A former aerospace engineer and real-estate developer, Buss has been a prominent name in American sports since he bought the Lakers, the NHL's Los Angeles Kings and the Forum from Jack Kent Cooke in 1979. Buss immediately transformed the Lakers into the NBA's most glamorous franchise, winning 10 NBA championships under his watch.

The Lakers won five titles in nine years during the 1980s, earning a reputation as basketball's most exciting team with their glamorous Showtime style led by Kareem Abdul-Jabbar and Johnson, who was Buss' first draft pick. O'Neal and Kobe Bryant then led the Lakers to a threepeat from 2000-02 under coach Phil Jackson before Bryant and Pau Gasol won two more titles in 2009 and 2010.

Buss' children moved into leadership roles with the Lakers in recent years. Jim Buss, the Lakers' executive vice president of player personnel and the second of Buss' six children, has taken a leading role in basketball decisions, while daughter Jeanie plays a major role in running the franchise's business side.

Yet Jerry Buss was deeply involved the Lakers' most recent major moves, including the acquisitions of Steve Nash and Dwight Howard last summer, along with the firing of coach Mike Brown and the hiring of Mike D'Antoni early this season.

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Ancient asteroid strike in Australia “changed face of earth”

SYDNEY (Reuters) – A strike from a big asteroid more than 300 million years ago left a huge impact zone buried in Australia and changed the face of the earth, researchers said on Friday.

“The dust and greenhouse gases released from the crater, the seismic shock and the initial fireball would have incinerated large parts of the earth,” said Andrew Glikson, a visiting fellow at the Australian National University.

The asteroid was bigger than 10 km (6 miles) in diameter, while the impact zone itself was larger than 200 km (120 miles) – the third largest impact zone in the world.

“The greenhouse gases would stay in the atmosphere for tens of thousands of years,” Glikson told Reuters.

The discovery was made after another researcher alerted Glikson to some unusual mineral deposits in the East Warburton Basin in South Australia.

Glikson and colleagues analyzed quartz grains drawn from deep beneath the earth’s surface in research starting in 2010 and the crater itself was recently identified, he added.

The strike may have been part of an asteroid impact cluster which caused an era of mass extinction, wiping out primitive coral reefs and other species, added Glikson, co-author of a study published in the journal Tectonophysics.

The impact happened before the dinosaurs, he said.

The announcement of the discovery came just before a newly discovered asteroid about half the size of a football field was set to pass some 27,520 km (17,200 miles) from Earth.

(Reporting by Michael Sin; Editing by Lincoln Feast and Elaine Lies)

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What does Kim intend with nuclear test?

STORY HIGHLIGHTS

• North Korea enjoys international community chatter about its nuclear program


• Dates of nuclear test and rocket launch have significance, writes Joo Sung Ha


• Joo works as a newspaper journalist and came from North Korea

Editor's note: Joo Sung Ha is a Seoul-based journalist for Donga Ilbo, a newspaper in South Korea. He graduated from North Korea's Kim Il Sung University and trained as a reservist artillery officer. He has been imprisoned in China and North Korea. This piece was submitted in Korean and has been translated.

(CNN) -- On Tuesday, the international community reacted to North Korea's third nuclear test by calling its action "provocative," while South Korea's foreign minister warned that it was a "clear threat to international peace and security."

It was what Kim Jong Un, the nation's young leader, wanted.

From the North Korean government's view, the more pressure the international community places on its nuclear testing, the better. They enjoy the chatter among the world's leaders and at the U.N. about how North Korea's nuclear program must be stopped at all cost.

Joo Sung Ha defected from North Korea and is a journalist based in Seoul.

On January 23, the North Korean foreign ministry notified that they intended to carry out a test. They also sent photos of Kim Jong Un holding a meeting with senior officials.

If Kim had not acted by going through with the underground blast, it would have appeared that he had succumbed to pressure from the international community. In North Korea the authority of the "king" in the dynasty system cannot be compromised.

The date of the nuclear test -- conducted on February 12 -- is also significant, as it fell just days short of the 71st birthday of Kim's late father, Kim Jong Il, on February 16. Many North Korean events are associated with symbolic dates for the Kim family. On December 12, just days before the first anniversary of Kim Jong II's death, Pyongyang launched its first rocket into orbit -- despite international uproar.

North Korea has staked its pride on these events. Saving face is more important than international sanctions, even if hundreds of thousands of ordinary North Koreans have died of hunger.

Even so, I cannot say the motivation behind North Korea's nuclear test is for Kim's pride alone. It also sends a message to its people that "Kim Jong Un leads the world."

Even with the nuclear test, the government knows that war will not arise. But to its people, it can give the impression that war is impending.

Inheriting his father's position at such a young age -- he's believed to be in his 20s -- many in North Korea may question whether Kim has the clout to lead. But through this test, Kim wanted to send a strong message domestically that he is in charge.

What happens if they do develop an effective nuclear weapon? Does North Korea intend to attack the United States? That is impossible. If North Korea attacks, it will be sent back to the Stone Ages -- the leadership in Pyongyang is well aware of that.

Does this point to an eventual attack on South Korea then? South Korea is protected by a nuclear umbrella -- meaning that the United States will protect it. In return for Seoul limiting its own nuclear weapons capability, Washington offers its protection. If North Korea attacks South Korea, it's effectively an attack on the United States.

Another major reason why North Korea is developing a nuclear capability is that its conventional military is dated and there are doubts about whether it can defend itself. While North Korea has an estimated 1.2 million soldiers, making it the third largest military behind China and United States, this is only a number.

It may be hard to believe but for almost 20 years, there have been continued food shortages in the military, to the extent that as many as 20% to 30% of the armed forces have actually disappeared -- with many deserting their post by way of a bribe to their superiors. Those that do remain in service are often involved in petty crime to get by, such as stealing from the civilian population.

North Korea requires military service for 10 years. During those years, most are discharged without even having fired 30 bullets. Without sufficient fuel for planes, airborne troops have not had much training. In 1990, I stood guard at a post in Pyongyang. The anti-aircraft weapon I used was a 1940s era model from the Soviet Union.

If war is to occur, North Korea could not stand, even for days, and it is well aware of that. But could it count on traditional ally, China, for support?

Starting from Kim Il Sung, the founder of North Korea, the North Korean regime has never fully trusted China. The message that China is a nation that could strike North Korea at the "back of the head" has been passed down over the years to Kim Jong Un, his grandson. Since North Korea cannot count on Beijing fully, it has turned to the nuclear option as a deterrent.

North Korea would not risk a pre-emptive attack on the South, but the Kim dynasty now believes it has a card to protect itself, which is its main objective. For this reason, even if millions of people starve to death in the effects of the harsh sanctions, North Korea will keep trying to develop its own nuclear capabilities.

The opinions expressed in this commentary are solely those of Joo Sung Ha.

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Passengers leave crippled ship

MOBILE, Alabama—

A crippled cruise ship that lost power for more than four days in the Gulf of Mexico was pulled into a port in Mobile, Alabama, late on Thursday as passengers cheered the end of a "hellish" voyage marked by overflowing toilets and stinking cabins.

Tugboats pulled the Carnival Triumph into port in a drama that played out live on U.S. cable news stations, creating another public relations nightmare for cruise giant Carnival Corp. Last year, its Costa Concordia luxury ship grounded off the coast of Italy, killing 32 people.

Exhausted passengers lined the ship's decks, waving towels and flashlights and cheering as it pulled into dock, while hundreds of people watched from the shore.

Carnival officials said it could take up to five hours for the more than 4,200 people on board to disembark the ship, which has only one working elevator.

Once on solid ground, many passengers still had a lengthy journey ahead. More than 100 buses were lined up waiting to carry passengers on a seven-hour bus ride to Galveston, Texas, while others had elected to stay overnight in hotels in Mobile before flying home, Carnival said.

An engine fire on Sunday knocked out power and plumbing across most of the 893-foot vessel and left it adrift in the Gulf of Mexico. The ship, which went into service in 1999, was on a four-day cruise and on its way back from a stop in Cozumel, Mexico.

Over the last four days, passengers described an overpowering stench on parts of the ship and complained to relatives and media by cellphone that toilets and drainpipes overflowed, soaking many cabins and interior passages in sewage and turning the vessel into what some have described as a giant Petri dish.

"The thing I'm looking forward to most is having a working toilet and not having to breathe in the smell of fecal matter," said Jacob Combs, an Austin, Texas-based sales executive with a healthcare and hospice company.

Combs, 30, who said he had been traveling with friends and family on the Triumph, had nothing but praise for its crew members, saying they had gone through "hell" cleaning up after some of the passengers on the sea cruise.

"Just imagine the filth," Combs told Reuters. "People were doing crazy things and going to the bathroom in sinks and showers. It was inhuman. The stewards would go in and clean it all up. They were constantly cleaning," he said.

Officials greeted passengers with warm food and blankets and cell phones. Carnival Cruise Lines Chief Executive Gerry Cahill told reporters he planned to board the ship and personally apologize to passengers for their ordeal.

"I know the conditions on board were very poor," he said. "I know it was difficult. I want to apologize for subjecting our guests to that," he said.

"We pride ourselves with providing our guests with a great vacation experience and clearly we failed in this particular case."

Operated by Carnival Cruise Lines, the flagship brand of Carnival Corp, the ship left Galveston a week ago carrying 3,143 passengers and 1,086 crew. It was supposed to return there on Monday.

A Coast Guard cutter escorted the Triumph on its long voyage into port since Monday, and a Coast Guard helicopter ferried about 3,000 lbs of equipment including a generator to the stricken ship late on Wednesday.

Earlier in the week, some passengers reported on the poor conditions on the Triumph. They said people were getting sick and passengers had been told to use plastic "biohazard" bags as makeshift toilets.

Smoke from the engine fire was so thick that passengers on the lower decks in the rear of the ship had to be permanently evacuated and slept the rest of the voyage on the decks under sheets, passengers said.

'VERY CHALLENGING CIRCUMSTANCES'

Cahill has issued several apologies and Carnival, the world's largest cruise company, says passengers will receive a full credit for the cruise plus transportation expenses, a future cruise credit equal to the amount paid for this voyage, plus a payment of $500 a person to help compensate for the "very challenging circumstances" aboard the ship.

Mary Poret, who spoke to her 12-year-old daughter aboard the Triumph on Monday, rejected Cahill's apology in comments to CNN on Thursday, as she waited anxiously in Mobile with a friend for the Triumph's arrival.

"Seeing urine and feces sloshing in the halls, sleeping on the floor, nothing to eat, people fighting over food, $500? What's the emotional cost? You can't put money on that," Poret said.

Some passengers said conditions onboard improved on Thursday after the generator was delivered to the ship, providing power for a grill to cook hot food.

Carnival Corp Chairman and CEO Micky Arison faced criticism in January 2012 for failing to travel to Italy and take personal charge of the Costa Concordia crisis after the luxury cruise ship operated by Carnival's Costa Cruises brand grounded on rocks off the Tuscan island of Giglio. The tragedy unleashed numerous lawsuits against his company.

The cruise ship mogul has taken a low-key approach to the Triumph situation as well, even as it grabbed a growing share of the U.S. media spotlight. His only known public appearance since Sunday was courtside on Tuesday at a game played by his Miami Heat championship professional basketball team.

"I think they really are trying to do the right thing, but I don't think they have been able to communicate it effectively," said Marcia Horowitz, an executive who handles crisis management at Rubenstein Associates, a New York-based public relations firm.

"Most of all, you really need a face for Carnival," she added. "You can do all the right things. But unless you communicate it effectively, it will not see the light of day."

Carnival Corp shares closed down 11 cents at $37.35 in trading on Thursday on the New York Stock Exchange. The shares closed down 4 percent at $37.46 on Wednesday after the company said voyage disruptions and repair costs related to Carnival Triumph could shave up to 10 cents a share off its second-half earnings.

The Triumph is a Bahamian-flagged vessel and the Bahamas Maritime Authority will be the primary agency investigating the cause of its engine room fire.

Earlier this month, Carnival repaired an electrical issue on one of the Triumph's alternators. The company said there was no evidence of any connection between the repair and the fire.

For all the passengers' grievances, they will likely find it difficult to sue the cruise operator for any damages, legal sources said. Over the years, the cruise industry has put in place a legal structure that shields operators from big-money lawsuits.

(Additional reporting by David Adams and Kevin Gray in Miami, Writing by Tom Brown; Editing by Peter Cooney and Lisa Shumaker)

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Meteorite hits central Russia, more than 500 people hurt

CHELYABINSK, Russia (Reuters) - More than 500 people were injured when a meteorite shot across the sky and exploded over central Russia on Friday, sending fireballs crashing to Earth, shattering windows and damaging buildings.

People heading to work in Chelyabinsk heard what sounded like an explosion, saw a bright light and then felt a shockwave according to a Reuters correspondent in the industrial city 1,500 km (950 miles) east of Moscow.

A fireball blazed across the horizon, leaving a long white trail in its wake which could be seen as far as 200 km (125 miles) away in Yekaterinburg. Car alarms went off, windows shattered and mobile phone networks were interrupted.

"I was driving to work, it was quite dark, but it suddenly became as bright as if it was day," said Viktor Prokofiev, 36, a resident of Yekaterinburg in the Urals Mountains.

"I felt like I was blinded by headlights," he said.

No fatalities were reported but President Vladimir Putin, who was due to host Finance Ministry officials from the Group of 20 nations in Moscow, and Prime Minister Dmitry Medvedev were informed.

A local ministry official said such incidents were extremely rare and Friday's events might have been linked to an asteroid the size of an Olympic swimming pool due to pass Earth at a distance of 27,520 km (17,100 miles) but this was not confirmed.

Russia's space agency Roscosmos said the meteorite was travelling at a speed of 30 km (19 miles) per second and that such events were hard to predict. The Interior Ministry said the meteorite explosion had caused a sonic boom.

Russia's Emergencies Ministry said 514 people had sought medical help, mainly for light injuries caused by flying glass, and that 112 of those were kept in hospital. Search groups were set up to look for the remains of the meteorite.

"There have never been any cases of meteorites breaking up at such a low level over Russia before," said Yuri Burenko, head of the Chelyabinsk branch of the Emergencies Ministry.

WINDOWS BREAK, FRAMES BUCKLE

Windows were shattered on Chelyabinsk's central Lenin Street and some of the frames of shop fronts buckled.

A loud noise, resembling an explosion, rang out at around 9.20 a.m. (12:20 a.m. ET). The shockwave could be felt in apartment buildings in the industrial city's center.

"I was standing at a bus stop, seeing off my girlfriend," said Andrei, a local resident who did not give his second name. "Then there was a flash and I saw a trail of smoke across the sky and felt a shockwave that smashed windows."

A wall was damaged at the Chelyabinsk Zinc Plant but a spokeswoman said there was no environmental threat.

Although such events are rare, a meteorite is thought to have devastated an area of more than 2,000 sq km (1,250 miles) in Siberia in 1908, smashing windows as far as 200 km (125 miles) from the point of impact.

The Emergencies Ministry described Friday's events as a "meteor shower in the form of fireballs" and said background radiation levels were normal. It urged residents not to panic.

Chelyabinsk city authorities urged people to stay indoors unless they needed to pick up their children from schools and kindergartens. They said what sounded like a blast had been heard at an altitude of 10,000 meters (32,800 feet).

The U.S. space agency NASA has said an asteroid known as 2012 DA14, about 46 meters in diameter, would have an encounter with Earth closer than any asteroid since scientists began routinely monitoring them about 15 years ago.

Television, weather and communications satellites fly about 500 miles higher. The moon is 14 times farther away.

(Additional reporting by Natalia Shurmina in Yekaterinburg and Gabriela Baczynska in Moscow, Writing by Alexei Anishchuk and Timothy Heritage, Editing by Michael Holden)

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Euro falls as German, French economies disappoint

LONDON (Reuters) - The euro dropped and European shares fell on Thursday as growth data from the region's two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.

The German economy, Europe's largest, contracted by 0.6 percent in the final quarter of 2012, marking its worst performance since the global financial crisis was raging in 2009.

Worryingly for Berlin, it was export performance - the motor of its economy - that did most of the damage. France's 0.3 percent fall was also a touch worse than expectations.

The figures suggest the euro zone could remain slumped in recession in the first quarter of this year and pushed down the euro 0.5 percent to a session low $1.3382.

"This is major data, so it's dampening sentiment," said Anita Paluch, sales trader at Gekko Capital Markets.

"It is kind of disappointing that Germany, which had shown so much resilience, is now showing signs of suffering from the debt crisis."

Stock markets also edged lower although the impact was not so marked. The pan-European ESTOXX 50 index <.stoxx50e> was down 0.1 percent by 0815 GMT with London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> all down by a similar amount.

German bonds were steady, stabilizing after a fall in the previous session as demand for traditional safe-haven assets returned.

Benchmark Bund futures were 3 ticks higher on the day at 142.08, with analysts targeting a further rise if the remaining GDP data for countries such as Italy (0900 GMT), and the euro zone as a whole (1000 GMT), also come in weak.

The pain is not confined to Europe. Japan, under some pressure over its aggressive monetary and fiscal policies which are driving down the yen, came up with an unwanted riposte earlier on Thursday - its GDP shrank 0.1 percent in the fourth quarter, leaving it in recession and crushing expectations of a modest return to growth.

The Bank of Japan also kept monetary policy steady and upgraded its economic assessment, as recent falls in the yen and signs of a pick-up in global growth in recent months give it some breathing space after expanding stimulus just a month ago.

Markets in China and Taiwan remain shut for the Lunar New Year holiday but Hong Kong resumed trading on Thursday.

(Reporting by Marc Jones; Editing by Peter Graff)

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Pistorius charged with murder of girlfriend

PRETORIA, South Africa (AP) — Oscar Pistorius has been charged with the murder of his girlfriend after model Reeva Steenkamp was shot inside the Olympic athlete's home in South Africa.

Police said a 26-year-old male would appear in court later on Thursday. Police in South Africa do not name suspects in crimes until they have appeared in court but police spokesperson Brigadier Denise Beukes said that Pistorius was at his home after the death of Steenkamp and "there is no other suspect involved."

Beukes said the suspect was undergoing blood alcohol and forensic tests and had made a request to be brought to court immediately. Beukes said he would apply for bail, but the South African Police Service would oppose the application.

Beukes said there had been "previous incidents" at Pistorius' home.

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Where's Obama's foreign policy?

By Isobel Coleman, Special to CNN

February 13, 2013 -- Updated 1653 GMT (0053 HKT)

STORY HIGHLIGHTS

• Isobel Coleman: Obama mainly addressed domestic issues: economy, immigration, energy


• He spoke very little about and offered nothing much new on foreign policy, she says


• Coleman: He talked about ending Afghanistan War, spoke briefly about Iran, Syria, China


• Coleman: His reinvigorated free trade agenda seems to be the boldest move

Editor's note: Isobel Coleman is the author of "Paradise Beneath Her Feet" and a senior fellow for U.S. foreign policy at the Council on Foreign Relations in New York.

(CNN) -- President Obama's State of the Union address predictably focused on his domestic priorities.

Immigration reform, a laundry list of economic initiatives including infrastructure improvements (Fix it First), clean energy, some manufacturing innovation, a bit of educational reform and the rhetorical high point of his speech -- gun control.

Isobel Coleman

As in years past, foreign policy made up only about 15% of the speech, but even within that usual limited attention, Tuesday night's address pointed to few new directions.

On Afghanistan -- America's longest war -- Obama expressed just a continued commitment to bringing the troops home, ending "our war" while theirs continues. On Iran, there was a single sentence reiterating the need for a diplomatic solution, which makes me think that a big diplomatic push is not likely. On North Korea, boilerplate promises to isolate the country further after its provocative nuclear test, and on Syria, a call to "keep the pressure" on the regime, which means more watching from the sidelines as the horror unfolds.

Notably, China was mentioned only twice -- once in the context of jobs, and another time with respect to clean energy. Nothing about managing what could very well be this administration's most vexing but critically important bilateral relationship.

Obama's call for a reinvigorated free trade agenda was his boldest foreign policy statement of the evening. He is right to note that free trade "supports millions of good-paying American jobs," but his pledge to pursue a "comprehensive Transatlantic Trade and Investment Partnership" -- a free trade agreement with Europe -- will run into significant opposition from organized labor, especially given ongoing weaknesses in the economy.

Without fast track negotiating authority, the prospects for such a deal are minimal. Fast track authority, which allows the president to negotiate trade deals that Congress can then only approve or disapprove but not amend, expired in 2007, and it would require quite a breakthrough for Congress to approve it again. Still, despite these challenges, an agreement is worth pursuing.

Aside from a free trade agreement with Europe, there was little else in this State of the Union that hinted at foreign policy ambition. But unpredictable events have a way of derailing America's best laid plans to stay above the fray of the world's messiest problems. Who could have predicted just a few months ago that Mali would get a mention in the State of the Union? Iraq -- not uttered once tonight -- could re-emerge as a formidable crisis; Iran, Pakistan and North Korea also have tremendous potential to erupt.

While this administration seems determined to focus inward on getting America's economic and fiscal house in order, I doubt events in the rest of the world will be so accommodating.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Isobel Coleman

Part of complete coverage on

February 13, 2013 -- Updated 1629 GMT (0029 HKT)

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February 13, 2013 -- Updated 1420 GMT (2220 HKT)

Anne-Marie Slaughter says the hallmark of the 2013 State of the Union address was progressive pragmatism.

February 13, 2013 -- Updated 1755 GMT (0155 HKT)

David Rothkopf says a newly confident and empowered Obama offered an agenda for change and determination to get to the work of governing.

February 13, 2013 -- Updated 1848 GMT (0248 HKT)

CNN invited contributors to weigh in on President Obama's State of the Union address Tuesday night.

February 13, 2013 -- Updated 1859 GMT (0259 HKT)

Jessica Massa says today's romantic landscape is full of ambiguity and gray areas about where any given connection might lead.

February 13, 2013 -- Updated 1752 GMT (0152 HKT)

LZ Granderson: Marco Rubio was set to showcase the new, women-friendly face of the GOP. Too bad he had just cast a women-unfriendly vote.

February 13, 2013 -- Updated 1753 GMT (0153 HKT)

Ruben Navarrette says Sen. Marco Rubio's effective response to the State of the Union showed he is someone to be reckoned with.

February 13, 2013 -- Updated 1415 GMT (2215 HKT)

Matt Welch: The State of the Union laid out an agenda too costly for a country that wants to see what it's getting in return for debt.

February 13, 2013 -- Updated 1653 GMT (0053 HKT)

Isobel Coleman says Obama's speech ignored huge challenges the U.S. faces in the world, ones which could quickly dominate domestic agenda.

February 13, 2013 -- Updated 1417 GMT (2217 HKT)

Presidents once delivered State of the Union only in writing; now they reckon with a stream of social media comments, says Bob Greene.

February 12, 2013 -- Updated 2118 GMT (0518 HKT)

Peter Bergen says the interview with the bin Laden "shooter" adds important detail to the story of bin Laden's final minutes.

February 12, 2013 -- Updated 1700 GMT (0100 HKT)

David Frum says many people want to believe in living alone, without traditional attachments, but is that kind of life best?

February 12, 2013 -- Updated 1612 GMT (0012 HKT)

Timothy Stanley says Pope Benedict XVI, who struggled to reconcile the Catholic Church's relationship with the modern world, embraced the living traditions of the church while attempting to extend its reach.

February 10, 2013 -- Updated 1839 GMT (0239 HKT)

Dean Obeidallah says the CBS dress advisory note to Grammy attendees was hilarious -- and sexist.

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Anxiety grows as Chicago Public Schools narrows closing list

After trimming the number of schools that could be closed to 129, Mayor Rahm Emanuel's school administration on Wednesday entered the latest and what is likely to be the most intense phase so far in trying to determine which schools should be shut.

Chicago Public Schools chief Barbara Byrd-Bennett is expected to pare the preliminary list before unveiling a final one at the end of March. She said administrators will determine which schools are saved in the coming weeks amid a final round of community meetings to hear arguments from parents, teachers and community groups about why their schools should stay open.

If a hearing Wednesday night in North Lawndale was any indication, CPS still has a long way to go to gain the public's trust.

"Our schools don't need to close," Dwayne Truss, vice chairman of CPS' Austin Community Action Council, said in front of hundreds of people packed inside a church auditorium in the West Side neighborhood. "CPS is perpetrating a myth that there's a budget crisis."

CPS initially said 330 of its schools are underenrolled, the chief criterion for closing. Members of a commission assembled to gather public input on the issue told CPS officials earlier this year that closing a large number of schools would create too much upheaval. The Tribune, citing sources, said the commission indicated a far smaller number should be closed than initially feared, possibly as few as 15.

CPS then started holding its own hearings and on Wednesday, while following many of the formal recommendations made by the Commission on School Utilization, said 129 schools still fit the criteria for closing.

The new number and the latest round of hearings sets the stage for the administration to counter questions about the district's abilities to close a large number of schools and the need to do so.

For many who have already turned up to school closing meetings, this final round of hearings will be even more critical. School supporters must show how they plan to turn around academic performance and build enrollment, and also make the case for any security problems that would be created by closing their school.

"We are prepared now to move to the next level of conversation with our community and discuss a list of approximately 129 schools that still require further vetting and further conversation," Bryd-Bennett said. "We are going to take these 129 and continue to sift through these schools."

In the past, political clout has played a role in the district's final decisions. Already this year, several aldermen have spoken out on behalf of schools in their wards.

On the Near Northwest Side, for instance, the initial list of 330 underused schools included about six in the 1st Ward. Ald. Proco "Joe" Moreno helped organize local school council members, school administrators and parents to fight any closing. He also took that fight to leaders in City Hall and within CPS' bureaucracy. Nearly all of the schools in the ward were excluded from the list of 129.

"It is effort and it's organizing and not just showing up at meetings and yelling. Anybody can do that," Moreno said. "Those schools that proactively work before those meetings and explain what they are doing, what they need and that they are willing to accept new students, that's when politics works.

"My responsibility in this juncture was to focus on these schools," he said. "I had to work on the inside, with CPS and with City Hall, and with my schools on the outside."

Most of the schools on the list of 129 are on the West, South and Southwest sides, many in impoverished neighborhoods that saw significant population loss over the last decade. Largely spared were the North and Northwest sides.

In all, more than 43,000 students attend those 129 schools on the preliminary list, according to CPS records.

The area with the most schools on the list is a CPS network (the district groups its schools in 14 networks) that runs roughly from Madison Street south to 71st Street and from the lake to State Street. The preliminary list includes 24 schools in that area.

The Englewood-Gresham network has the second-largest number, 19, while the Austin-North Lawndale network where Wednesday night's meeting was held still has 16 schools on the list.

CPS critics said the preliminary list is still too large to be meaningful and that the district's promise to trim it before March 31 is only a tactic to make the final number seem reasonable.

"They started out with such a far-fetched, exaggerated list of schools, many of which are nowhere near underutilized," said Wendy Katten, co-founder of the parent group Raise Your Hand. "They might appear to be looking like they're listening, but they're not. They have not done a thorough and substantive assessment of these schools."

Following the commission's recommendations, CPS last month removed high schools and schools performing at a high level academically from consideration. On Wednesday, the district said schools with more than 600 students or utilization rates of at least 70 percent have also been taken out of consideration for closing.

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