Prudential Financial will buy the US operations of Swedish
insurance giant Skandia Ltd. for about $1.2 billion, the companies announced Friday. Analysts said the deal represents a strategic retreat for Stockholm-based Skandia, since 38 percent of its sales and half of its funds under management were in the US. The terms of the deal call for Skandia not to reenter the American market for five years.
In a move to cut its debt, industrial giant Fiat sold its full stake in General Motors - 32 million shares - for $1.16 billion. The buyer was not identified, but speculation centered on the investment bank Merrill Lynch. The deal will not affect GM's 20 percent stake in Fiat Auto or an option that, if exercised, would require the US carmaker to buy the rest of the company in 2004, reports said.
US Airways filed plans in bankruptcy court to reorganize on the basis of a $1 billion federal loan guarantee and a trade of equity for givebacks by unionized employees and a $240 million investment by a state pension fund. Under the plan, the Retirement Systems of Alabama fund would gain 37 percent ownership of the carrier and eight of the 15 seats on its board for the investment. The Air Line Pilots Association would take a 19 percent share, with lesser stakes going to other employees, to management, and to creditors. US Airways sought protection from its creditors in August, citing debts of $10 billion.
Xerox Corp. said it once again will restate its 2001 financial results after discovering a new accounting error that resulted in underreporting of interest expense. Quarterly reports for this year also will be revised, the copier giant announced. The company first restated last year's results in June, two months after agreeing to a $10 million fine for accounting problems dating back to 1997.
AT&T Corp. warned the more than 50,000 employees in its business services division of plans to cut jobs next year. A spokesman said Friday that no specific number had been determined yet.
McDonald's will close 176 unprofitable outlets in Japan next year and will report a net loss there for the first time since those operations began in 1973, its Tokyo unit announced. Sales plummeted after the outbreak of so-called "mad cow" disease in Japanese cattle herds in September 2001 and have been slow to rebound.