Business & Finance
In a further consolidation of the US homebuilding industry, Hovnanian Enterprises announced its second pickup in two days. The Red Bank, N.J., contractor said it is buying the operations of Town & Country Homes of Lombard, Ill. Terms were not disclosed, but Hovnanian called it "the largest private homebuilder acquisition ever consummated." It gives the buyer a new foothold in the Chicago market, the sixth-largest in terms of housing starts, and a larger presence in Minneapolis/St. Paul, the No. 10 market, and in high-growth south Florida. On Tuesday, Hovnanian bought Cambridge Homes of Altamonte Springs, Fla. It acquired five other contractors in 2003.
The travails of Sumitomo Mitsui Financial Group took a new turn as the bank, Japan's second-largest, said it expects to report a $2.2 billion loss for 2004 and published reports indicated it has asked related insurance companies for hundreds of millions of dollars worth of new capital. Two years ago, SMFG tapped foreign investors for almost $5 billion in fresh capital. It had projected a $1.7 billion net profit for 2004 but said the cost of disposing of nonperforming loans has had to be raised from $6.2 billion to $8.4 billion. Last Friday, SMFG abandoned its $29 billion bid to take over rival UFJ Holdings Inc. - a merger that would have created the world's biggest bank - even though the offer was to have been good until June.
In a new wave of layoff news:
• Marsh & McLennan Companies, rebounding from regulatory troubles, warned Tuesday that 2,500 jobs in its risk and insurance-services unit probably will be eliminated. Last fall, the company cut 3,000 other jobs. In January, Marsh & McLennan agreed to pay $850 million in restitution to end an investigation by New York Attorney General Eliot Spitzer (D), who found evidence of bid-rigging, price-fixing, and the use of hidden incentive fees.
• General Motors' assembly plant in Lansing, Mich., will close in May, more than a year before a new plant opens in the city, the Lansing State Journal reported. The factory has built cars for more than 100 years, but production has dropped as consumer demand for the Pontiac Grand Am and Chevrolet Classic dwindles. The new plant will employ 2,900 people, many of whom are expected to come from the old facility.
• Ikon Office Solutions, the world's largest independent distributor of copiers, said it will lay off 1,500 employees in North America. The company, which sold its consulting services division last year, also will close its business document services unit and trim the number of sites at which document-management services are offered to the legal industry.