Business & Finance
Tense negotiations between General Motors and a money-losing affiliate, Fiat of Italy, were extended until Feb. 1, with no word on whether the latter ultimately will excercise its right to force a buyout. The mediation process between them was to have expired Monday, but Fiat said it was content to wait, although the talks reportedly have gone nowhere so far. GM bought a 20 percent stake in Fiat five years ago, when both companies were enjoying better times. But as part of the deal, GM agreed to a "put option," enforceable until July 2010, which gives Fiat the right to sell the rest of the business to its partner. Both companies now are struggling, and the US auto giant has written down the value of its investment to zero. The Italian company is expected to post an operating loss of about $1.3 billion for 2004 and it projects at least another two years of red ink. Meanwhile, GM is arguing that certain other financial transactions engaged in by Fiat since the alliance was forged render their deal void. Analysts suggest that Fiat may be willing to settle for a onetime payment, although its size would have to be negotiated.
Monsanto Co. said it has signed a definitive agreement to buy Seminis, Inc., a leading producer of vegetable and fruit seeds, for $1.4 billion in cash and assumed debt. Seminis, based in Oxnard, Calif., supplies more than 3,500 varieties to commercial growers, dealers, distributors, and wholesalers in more than 150 countries. Monsanto is expected to make Seminis a wholly owned subsidiary that will continue to use its own name.
Infineon Technologies became the latest chipmaker to warn of deep cost cuts because of slumping demand for its products. Similar forecasts have been sounded in recent weeks by Advanced Micro Devices, STMicroelectronics, and Elpida Memory Inc. Infineon announced it will scale back production in the unit that makes semiconductors for cellphones and smart cards, and analysts said they wouldn't be surprised to see the closure of a plant and a resulting loss of jobs. Infineon is based in Munich, Germany.
Day-to-day operations are expected to be unaffected, American Business Financial Services Inc. said, despite filing for protection from creditors Friday under Chapter 11 of the federal bankruptcy code. The Philadelphia company, a leading mortgage broker, said it has arranged a $500 million line of credit while it reorganizes.