General Motors' pension fund, the largest in corporate America, is running a $31 billion deficit, according to figures compiled by a key federal agency, The New York Times reported. It said the "closely held" figure was compiled by the Pension Benefit Guaranty Corp., which backstops corporate pension plans and which in April assumed responsibility for bankrupt United Airlines' obligations to 120,000 employees and retirees. The Times said the $31 billion figure is based on what the agency would have to pay if GM's pension plan suddenly stopped. On the other hand, pensions are a long-term commitment, which is how the company determines what it owes. A GM spokesman told the Times that the program, which covers 600,000 people, is not in danger of being terminated and that there is no cause for alarm.
NRG Energy Inc. said Sunday it has agreed to buy privately held Texas Genco for $8.3 billion in a cash-and-stock deal. The merger would create a wholesale power generation company with a broad reach. NRG, which is based in Princeton, N.J., operates facilities in the Northeast and south-central regions as well as on the West Coast, in Brazil, Australia, and Germany. Most of Texas Genco's facilities are in Houston, its headquarters, and southeast Texas. The merger is seen as another sign of consolidation in the electric utility industry, which witnessed a $9 billion tie-up between Duke Energy Corp. and Cinergy Corp. four months ago.
A published report that it has offered $24 billion for KPN, the Dutch telecommunications giant, was being denied by Telefonica de España of Spain. Citing unidentified sources, The Wall Street Journal said it had learned that both companies were assembling advisers for preliminary discussions on a tie-up that would give a combined company operations in four European countries: their own, plus Germany and Belgium. Telefonica also has lucrative holdings throughout Latin America. KPN and Telefonica appeared on the verge of a deal five years ago, but the latter's board ultimately vetoed it.
In a merger valued at $6 billion, cable-TV provider NTL Inc. said it will acquire rival Telewest Global. NTL also will assume $3 billion in Telewest's debt. Both companies are listed on the Nasdaq exchange in the US, although they are British. The deal creates a broadband powerhouse aimed at competing on more even terms with BT Group (British Telecom) and British Sky Broadcasting.