Business & Finance
Hoping to spur dismal sales, Universal Music Group said it's slashing wholesale prices of compact disc recordings and will push retailers to set a $12.98 cap - $6 less than the current norm - as of Oct. 1. Industrywide, album revenues have fallen by more than $2 billion since 1999, with high CD prices and free Internet downloads often cited as the main factors.
In a deal valued at $4.3 billion, utility giant Suez SA agreed to sell its Ondeo Nalco water-treatment unit to a trio of US private-equity firms: Blackstone Group, Apollo Management, and Goldman Sachs Capital Partners. The sale is the latest in a series by Suez, which is burdened by heavy debt from acquisitions in the 1990s. The Paris-based conglomerate also reported a record $1.7 billion first-quarter loss due to sales-related charges. Nalco, based in Naperville, Ill., sells processing chemicals and services to customers in 130 countries.
Cigna Corp., the third-largest US health insurer, agreed to pay $540 million and to revise its claims-processing procedures in a settlement announced Wednesday with 700,000 doctors nationwide. Eight other defendants in the lawsuit continue to challenge its class-action status.
Clearing the way for Berkshire Hathaway's acquisition of mobile-home giant Clayton Homes Inc., a state appeals court in Knoxville, Tenn., found Wednesday that there is "not a scintilla of evidence" of fraud in a Clayton shareholder vote that OK'd the $1.7 billion deal. Plaintiffs have until Monday to appeal.
In layoff announcements:
• Another 1,000 jobs will be cut by Royal & Sun Alliance (RSA), which, despite being one of Britain's top property and casualty insurers, has lost money in each of the past three years. Last November, RSA announced 5,000 layoffs. The company also said it will try to raise $1.5 billion by offering new stock to its shareholders
• Gateway Inc., a leading maker of personal computers, said it will close a plant in Hampton, Va., by the end of the month, cutting at least 450 jobs. Layoffs also are imminent at plants in Sioux Falls and North Sioux City, S.D., the company said, without giving numbers.
• Royal Ahold NV, the financially troubled international supermarket and convenience-store giant, announced it will cut 440 jobs at its flagship Albert Heijn chain in the Netherlands.