Business & Finance
A sweeping overhaul of its operations was announced by EMI, the world's third-largest music company, as part of a drive to cut costs by $91.5 million a year. EMI, based in London, said it will cut 1,500 jobs, all of them in its recording division, and will close plants in Illinois and the Netherlands that manufacture compact discs and DVDs. The company also said it will cancel contracts with "niche and underperforming" artists, mostly in Europe. EMI has been unsuccessful in two efforts to expand in recent years. In 2001, regulators blocked its proposed merger with German media giant Bertelsmann's BMG subsidiary, and late last year it dropped out of the bidding for Time Warner's music business.
Clear Channel Communications, the No. 1 radio station owner in the US, announced it had approved spending up to $1 billion over the next year for a stock-repurchase program. Clear Channel has an ownership stake in more than 240 stations internationally and is a leader in the outdoor advertising industry. The company is based in San Antonio, Texas.
Royal Vendex, a leading operator of department stores in Europe, said it is "positively disposed" toward a $1.8 billion takeover offer from US buyout specialist Kohlberg Kravis Roberts (KKR) and two other equity partnerships and will open exclusive negotiations with them. The others in KKR's consortium are AlpInvest Partners of Amsterdam and Change Capital Partners of London. Royal Vendex also is based in Amsterdam.
Standard Life Assurance Co. will propose a radical change in its structure - from member-owned to publicly traded - after rejecting just such a move four years ago. The latter would be "the best option" for raising funds and expanding, its chief executive said, because of new British rules that require life-insurance companies to show increased reserves. That would be easiest to accomplish through an initial public offering, he said. Standard also announced plans to lay off 1,000 employees. The 178-year-old company, based in Edinburgh, Scotland, is one of the world's largest "mutuals."