Beleaguered Marsh & McLennan Cos. announced another in a series of leadership changes Tuesday: the resignation of co-president Peter Garvey for "personal reasons." The world's largest insurance brokerage is undergoing a shakeup following last fall's bid-rigging lawsuit brought by New York Attorney General Eliot Spitzer (D). In the aftermath of Spitzer's investigation, chief executive Jeffrey Greenberg and other senior managers were ousted and the company agreed to pay $850 million in restitution to policyholders. Garvey played a significant role in developing Global Broking, a division that Spitzer accused of price-fixing and using incentives to steer business to carriers that paid Marsh the most "contingent" commissions, reports said. Global Broking has since been closed.
The owner of the world-famous Tussauds wax museums agreed to be acquired for $1.5 billion by Dubai International Capital, a private equity firm backed by the government of the Persian Gulf nation. Tussauds Group, based in Chessington, England, also operates theme parks in England and Germany and has a one-third stake in the Eye, the huge sightseeing Ferris wheel on the Thames River in London.
The chief executives of Lufthansa and Swiss were to sign an agreement in Zurich as the Monitor went to press that calls for the German airline to absorb its struggling rival. The deal was arrived at late Tuesday after their respective boards, the Swiss government, and more than 80 percent of Swiss' investors OK'd a business model jointly developed by the carriers. It calls for Lufthansa to carry Swiss on its books as a profit center, although the latter will keep its own brand name and base of operations in Switzerland. The consolidation will be the industry's largest since Air France took over KLM Royal Dutch Airlines last spring.
Pioneer Corp., a leading maker of electronics for the consumer and automotive markets, said it will close 10 overseas assembly plants, laying off 2,000 employees. The moves will be completed by the end of March 2007. Pioneer is based in Tokyo.