Business & Finance
Tobacco giant Philip Morris International agreed to pay the European Union $1.25 billion in a deal that resolves longstanding litigation against the maker of Marlboro cigarettes and helps the EU combat smuggling and counterfeiting. The EU has alleged that Philip Morris and other tobacco companies intentionally oversupplied low-tax markets with Marlboros and other brands so the surplus could be smuggled into other countries with higher taxes and sold cheaply on the streets. The agreement, which is being hailed as a potential model for resolving other tobacco industry disputes, is aimed at wiping out illegal sales of black-market cigarettes that deprive governments of tax revenues and manufacturers of sales, while generating profits for organized crime and even terrorist groups.
Dana Corp., a leading maker of auto parts, will sell its Automotive Aftermarket Group to the Cypress Group, a private equity fund manager in New York, the company announced Friday. The deal was valued at $1.1 billion. The unit, which employs 13,000 people at 52 plants around the world, was put up for sale after Dana fought off a hostile takeover bid last December by rival Arvin Meritor Inc. By jettisoning operations that make replacement brakes, filters, and other parts, Dana continues downsizing efforts aimed at reducing debt, adding to the value of its pension plans, and concentrating more on core products such as axles and driveshafts. Dana is based in Toledo, Ohio.
MCI Inc. sued its former chief executive, Bernard Ebbers, to recover $408 million he borrowed over a period of two years and to void a separation agreement that promises a lifetime pension of $1.5 million a month and other benefits. The company said he has yet to collect on anything in the deal except some healthcare provisions. Ebbers received the loans between 2000 and 2002, when the company was known as WorldCom Inc. Ultimately, he was forced to resign amid investigations into accounting fraud that rose to $11 billion. The company filed for bankruptcy in July 2002. Ebbers's trial on fraud and conspiracy charges was to have begun in November, but his attorneys have sought a delay until early next year. MCI has recovered $70 million from the sale of some of his assets.