Business & Finance

Sun Microsystems and Microsoft signed an agreement to end their bitter decade-long rivalry. Under terms of the deal, which caught industry observers by surprise when it was announced Friday, Microsoft will pay $700 million to settle an antitrust suit that was scheduled to go to court in early 2006, plus $900 million to resolve patent issues. The companies also will exchange royalty payments for the use of each other's technologies. Sun, which makes servers that tie desktop computers together and serve up Web pages, repeatedly had accused Microsoft of sabotaging its business, largely by making the Windows operating system incompatible with its Java programming language. Despite the pact, Sun announced 3,300 job cuts to address its deep financial losses.

In a deal valued at $3.3 billion, the largest cable-TV operator in Germany agreed to absorb its three smaller rivals. Kabel Deutschland's move almost doubles its subscriber base. It also reverses the divestment four years ago of the regional cable operations of Deutsche Telekom, the formerly state-owned land-line and cellphone service provider, which wanted to reduce its debt.

Air Canada began an urgent search for a new investor after a Hong Kong-based company Friday made good on a threat to walk away from its agreement to provide $500 million in funding for the bankrupt carrier. Trinity Time Investments blamed its decision on the refusal of unions representing Air Canada employees to accept further cuts in labor costs. Trinity released the company from the exclusivity obligations of their agreement, freeing it to pursue another partner. Although Air Canada has been under bankruptcy protection for a year, it has $692 million left in reserves - enough to continue stable operations for the next several months, its auditor said. Canada's Transport Ministry said Friday it has no plans to become involved in the restructuring process.

Another 760 jobs will be cut by BAE Systems, the largest defense contractor in Britain, because of a shortage of orders for submarines, the company said. BAE laid off 700 employees in the same division last year, plus 1,000 in its aircraft business. The company then learned in January that it would not be part of a consortium to supply Britain's military with new tanker planes, a contract worth $24 billion.

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