Business & Finance
Pending the OK of regulators, Mandalay Resort Group Inc. agreed to be acquired by MGM Mirage in the biggest merger in the history of the gambling industry. Their respective boards signed off Tuesday on the megadeal, which involves $4.8 billion in cash, the assumption of $2.5 billion in Mandalay debt, and $600 million in exchangeable bonds. The combined company will control almost half of the hotel rooms, gambling tables, and slot machines on the Las Vegas Strip.
Virgin Atlantic moved ahead with plans for a new low-fare, US-based airline Tuesday, placing an order with Europe's Airbus Industrie to buy and lease 18 jets for an estimated $1 billion. The carrier, which is to be known as Virgin America and aims to begin operations in mid-2005, could buy or lease up to 105 planes under the extended terms of the deal. Virgin America plans to site its headquarters in New York and its operations center in San Francisco. First, however, it must find American investors willing to buy a 51 percent or more stake in the company.
Deeply troubled Mitsubishi Motors Corp. added a pay cut to its month-old turnaround plan in an effort to help compensate for an expected plunge in sales. It also said it will reduce spending on research, advertising, front-office operations, travel, and computer systems, and will eliminate year-end bonuses. The accelerated program calls for a 5 percent cut in wages for regular workers and up to 50 percent for managers. Japan's No. 4 automaker already has announced almost 11,000 layoffs and the closure of an assembly plant. In addition to its other problems, Mitsubishi is recalling 370,000 cars and 450,000 trucks and buses because of defects it admits to having concealed for years. Five current or former executives are charged with crimes involving Mitsubishi vehicles, among them negligence in the death of a pedestrian.
A proposal to help pay down the national debt of Sweden by diverting $13 billion from its social security system was dropped by the government in the face of political pressure, Bloomberg.com reported. The system consists of four pension funds, and the amount in question would have been equal to 17 percent of their combined assets. But the system benefits 1.5 million retirees, and opponents of the plan argued that transferring an amount that size could result in reducing their monthly benefits. The national debt is $171 billion.