California Gov. Gray Davis (D) announced a deal in which the state would buy power lines from cash-strapped Southern California Edison for $2.76 billion to save the utility from bankruptcy. Davis's plan would give Edison, the state's No. 2 utility, cash to reorganize debts and pay its wholesale suppliers. The deal requires Edison to provide power to customers at low rates for 10 years and to drop a lawsuit seeking hikes in consumer rates, Davis said. The deal, which still requires approval from the Public Utilities Commission, requires Edison to start buying power on its own at the end of next year.
American Airlines completed its acquisition of bankrupt rival Trans World Airlines Monday to become the nation's largest air carrier. Fort Worth, Texas-based AMR Corp. paid $742 million plus the assumption of $3.5 billion in debt for TWA. The combined company will offer travel to more than 300 cities worldwide on 900 planes. The airlines will operate independently for now, but TWA eventually will be integrated fully into American's operations.
A lawsuit filed in Houston alleges that the insurance giant American International Group (AIG) acted improperly last week in entering the bidding for rival American General Corp. The litigation by Britain's Prudential PLC, which believed it had a merger deal with American General, claims AIG publicly offered its shares without first meeting all legal requirements. The suit seeks a permanent injunction against AIG and unspecified financial damages. AIG stepped in with a bid of $23 billion after the value of Prudential's offer slid from $26.5 billion to $20.7 billion because of a drop in the price of its shares.
(c) Copyright 2001. The Christian Science Monitor