Business & Finance
Hewlett-Packard Co. said it expects to save $1.9 billion annually by 2007 as a result of the 14,500 layoffs announced Tuesday. The job cuts, which weren't as deep as expected, figure to encourage investors, analysts suggested. H-P shares have risen almost 26 percent in value since March - when the computer and copying machine manufacturer changed chairmen - and now may climb higher on perceptions that the company is reining in costs to better compete against low-end rival Dell and high-end rival IBM, the analysts said. H-P also announced it will freeze pension benefits while attempting to placate employees by upping contributions to their 401(k) plans from 4 percent to 6 percent. Most of the job cuts will occur in support functions, such as finance and human resources, with research and development left virtually untouched, the company said.
The world's third-largest brewing company, SABMiller PLC, won the competition to buy Grupo Empresarial Bavaria of Colombia. The deal, announced Monday, is valued at $7.8 billion in cash, stock, and assumed debt. While not the dominant brewer in South America, Bavaria is the sales leader in Peru, Ecuador, and Panama, in addition to its own country. It also was being pursued by the Dutch beverage giant Heineken. SABMiller is based in London.
In a merger of supermarket chains, Metro Inc. said it will pay $1.39 billion in cash and stock for A&P Canada. Metro, based in Montreal, operates 343 stores in Quebec and Ontario, and will gain 236 in the latter province as a result of the tie-up.
Shares of stock in food-marketing giant Group Danone were trading 14 percent higher in Europe Tuesday amid speculation that PepsiCo of the US would offer $36 billion for the French company. But a PepsiCo spokesman would not comment, and officials of Danone declined to go beyond last week's assertion that the soft-drink giant had not approached their company. The prospect of a take-over, however, alarmed some members of France's parliament, one of whom was quoted as saying it would be "culturally awkward" and "scandalous" for Danone to be acquired by a US company. The Paris financial newspaper Les Echos said it had learned that Danone would do everything in its power to resist a takeover. Danone sells Danon yogurts, Evian bottled water, and LU cookies.