Business & Finance
R.J. Reynolds Tobacco Co. agreed to a merger with rival Brown & Williamson, a US subsidiary of British American Tobacco, in a $2.6 billion cash and stock deal. The combined company will be called Reynolds American and will be the nation's second-largest cigarettemaker, behind Philip Morris USA. Its headquarters will remain at Reynolds's home in Winston-Salem, N.C. Brown & Williamson will close its base in Louisville, Ky., and a plant in Macon, Ga., resulting in about 1,600 layoffs.
Confirming a published report last week, Sony Corp. said it will eliminate 20,000 jobs - almost 13 percent of its workforce - over the next three years. One-third of the layoffs will come in Japan. They are part of a larger strategy aimed at turning around the company's fortunes. Other steps include a 30 percent cut in production, distribution, and service facilities; ending the manufacture of cathode ray tubes for television; integrating jobs that overlap; consolidating its marketing operations in the US on the West Coast; forming a holding company for its noncore banking and insurance units; and joining rival Samsung Electronics of South Korea in a $2 billion project to develop liquid crystal display panels. The electronics giant reported a 25 percent drop in profits in the third quarter and cut its profit forecast for the full fiscal year by 23 percent.
Electronic Data Systems Corp. took a $2.2 billion pretax charge Monday, saying adoption of a new accounting rule retroactive to Jan. 1 increased its first-quarter losses from $126 million to $1.4 billion. The computer-services company, based in Plano, Texas, is under investigation by the Securities and Exchange Commission over its accounting practices, reports said.
Federal and Massachusetts state regulators filed civil fraud charges against Putnam Investments and two ex-managers in connection with a widening scandal over "market-timing" trades by mutual-fund groups. While it denied any wrongdoing, Boston-based Putnam said last week that four managers are resigning for engaging in improper trading.