The Harbus is pleased to offer this service in conjunction with Baker Library to brief you on the weekly business news highlights of the main HBS recruiters. The news is taken from The Wall Street Journal Interactive Edition and aims to provide a weekly summary of articles that can be followed up in greater depth. (Sources: WSJ- Wall Street Journal; DJ-Dow Jones News Wires)
Manufacturers
Norwegian metals group Elkem ASA (Y.ELK) said Tuesday that U.S.-based Alcoa (AA) has raised its holding in Elkem to at least 30%. The purchases, which raised Alcoa’s holding from about 25%, were made in January. “They (Alcoa) earlier announced they wanted to hold between 36% to 37%, so this buying does not come as a surprise,” said Elkem Senior Vice-President Svein Sundsboe. According to Sundsboe, Alcoa now holds about 32.9% of Elkem, corresponding to about 16,246,000 shares. In June, Alcoa advised the U.S. Federal Trade Commission that it wanted to buy up to 6.75 million more shares in Elkem, which would raise its stake to about 36.5%. (DJ 2/6/01)
DaimlerChrysler AG (DCX) Friday confirmed it is in talks about its participation in Formula One, the racing car circuit currently 50:50 owned by U.K. entrepreneur Bernie Ecclestone and troubled media group EM.TV & Merchandising AG (G.ETV). DaimlerChrysler press spokeswoman Nicole Gall told Dow Jones Newswires that “there are talks”, but wouldn’t give details on with whom or when a deal might be completed. A report in Thursday’s London Times newspaper said Bernie Ecclestone is planning to sell his stake to five major carmakers involved in the circuit, including DaimlerChrysler and Bayerische Motoren Werke AG (G.BMW). (DJ 2/2/01)
Power giant Enron Corp. Wednesday said it expected the Indian government to repay its 2.31 billion rupees ($1=INR46.38) debt within the stipulated 30 days, a company official said. Enron’s Indian subsidiary Dhabol Power Co., based in Maharashtra state, invoked a government guarantee Tuesday to try to recover millions of dollars in overdue bills, marking a milestone in the stormy history of the country’s biggest foreign investment. “The government has 30 days to pay up and by all indications that will be done,” said a Bombay-based Enron official on condition of anonymity. Regarding the arrears, the Maharashtra state electricity board’s chairman said that “as soon as we have money, we will pay; that is our position.” (DJ 2/7/01)
Ford Motor Co. (F) said Monday it is investing $360 million in its Bridgend engine plant in Wales and will hence create more than 600 new jobs at the plant. The company said the plant will produce V6 and V8 engines for use in Premier Automotive Group vehicles and was chosen in competition with other engine plants in Europe and North America. It said production of the new engine range will start towards the end of 2002, with annual production reaching 325,000 at full capacity which will take total annual production of engines to over one million a year. In the long-term, Ford said it plans an industrial plant adjacent to the site to provide a technical and manufacturing center for the region. (DJ 2/5/01)
Ford Motor Co. (F) began a tender offer to acquire the publicly owned shares of Hertz Corp. (HRZ) for $35.50 a share. As reported, Ford agreed in January to buy the 18.5% of Hertz it doesn’t already own in a sweetened bid valued at about $710 million. The deal followed an earlier offer of $30 a share, or about $600 million, from Ford in September. In a press release Friday, Ford said the tender offer will be followed by a merger transaction in which Ford will acquire any remaining publicly held shares of Hertz. (DJ 2/2/01)
Entertainment
Amazon.com Inc. (AMZN) canceled a plan to require laid-off workers to sign a controversial “non-disparagement” agreement in exchange for a more generous severance package. In an e-mail message sent today to customer service workers in Seattle, the Internet retailer said the workers could strike the non-disparagement clause from a larger separation agreement the employees are being asked to sign for the bigger severance package. The non-disparagement clause prohibited laid-off workers from criticizing Amazon to the press and others. Amazon said this week that it would lay off 1,300 employees, or 15% of its workforce, including about 350 customer service workers in Seattle who had been the subject of a unionizing drive. (DJ 2/1/01)
German media giant Bertelsmann AG (G.BRT) said Monday it has acquired majority control of Luxembourg media company RTL Group (L.RTL) under a share-swap deal. Bertelsmann has increased its 37% stake in RTL group to 67% by buying a 30% stake in RTL from Groupe Bruxelles Lambert S.A., it said in a statement. Under the deal, the majority owners of Groupe Bruxelles Lambert (GBl), Albert Frere and Paul Desmarais, will acquire a 25.1% stake in Bertelsmann, 0.1% of which is without voting rights. The deal is subject to the approval of the GBL board and Bertelsmann’s supervisory board, as well as regulatory authorities. (DJ 2/5/01)
Bertelsmann’s (G.BRT) eCommerce Group named William Sorenson to the newly created post of chief financial officer. Sorenson also was named a board member for the group, which was formed in June 2000. In a press release Tuesday, the media company said Sorenson was previously executive vice president and chief financial officer for Acclaim Entertainment Inc. (AKLM). (DJ 2/6/01)
Kmart Corp. (KM) will develop and sell a new line of Walt Disney Co.’s (DIS) Disney-branded children’s clothing under a licensing agreement. Financial terms weren’t disclosed. In a press release Tuesday, Disney said all Kmart stores in the U.S. and Puerto Rico will sell the clothing line. (DJ 2/6/01)
Sony Corp. (SNE or 6758) said Wednesday it has developed the world’s largest full-color organic EL (electroluminescence) display panel for home electronics and computer monitors. The 13-inch prototype of the next-generation of display is driven by low-temperature polysilicon TFT (thin film transistors) and has a resolution of 800 by 600 pixels, it said. This resolution is slightly lower than that of equally-sized TFT liquid crystal display (LCD) panels widely used for computer displays. The thin self-luminous display offers a wide viewing angle, high contrast and quick response to moving images, it said. Sony developed the large-sized EL panel using its new circuit technology which minimizes the panel’s characteristic problem of uneven luminance. Small-sized EL display panels are already used in mobile telephone handsets and PDA (personal digital assistant) terminals. Sony said it aims to be ready with mass production technology by 2003. (DJ 2/7/01)
Banks
J.P. Morgan Chase & Co., already the biggest lender in the private-equity arena, wants to launch a $13 billion private-equity fund that would be the largest ever of its kind. The bank’s private-equity investing division, once known as Chase Capital Partners and now called J.P. Morgan Partners, is looking for $5 billion of capital from outside investors such as pension funds, endowments and foundations, and will commit $8 billion of its own cash, according to the fund’s confidential offering memorandum. Chase’s prospective contribution is believed to be the biggest sum ever contributed to a single private-equity fund by any individual organization. (WSJ 2/6/01)
Dan Dickinson, co-head of global mergers at Merrill Lynch & Co., is leaving the New York investment bank to join Thayer Capital Partners, a Washington, D.C., private-equity firm. Mr. Dickinson, 39 years old, is joining Thayer as senior partner and will head up the firm’s investments in manufacturing companies. “I have an opportunity to be a senior partner in a small partnership and can help them build the firm,” Mr. Dickinson said. Steven Baronoff, the other co-head of global mergers, will assume Mr. Dickinson’s position at Merrill. (WJ 2/7/01)
Justin Dowley, co-head of investment banking for Europe, the Middle East and Africa at Merrill Lynch & Co., said he plans to resign from the company. Mr. Dowley, 45 years old, said he
will remain an adviser to Merrill Lynch but plans to pursue other business interests outside investment banking, including private investments and perhaps corporate directorships. “I’ve worked at big organizations for 23 years, since I left university,” Mr. Dowley said. Before joining Merrill Lynch five years ago, Mr. Dowley spent 15 years at Morgan Grenfell, a British merchant bank now owned by Deutsche Bank AG. (DJ 2/5/01)
Retail
Gap Inc. (GPS) named Amy Schoening chief marketing officer, a newly created position. In a press release Monday, the retailer said Schoening had been head of marketing for Gap’s Banana Republic chain, and joined the company five years ago. (DJ 2/5/01)
General Mills Inc., seeking federal approval of its plan to acquire Pillsbury Co., said as expected that it reached an agreement to sell Pillsbury’s desserts and specialty products business to International Multifoods Corp. for about $305 million. The deal with International Multifoods is contingent on approval from the Federal Trade Commission and on the closing of the $10.5 billion General Mills acquisition of Pillsbury, a unit of Diageo PLC. Under the agreement, Multifoods would purchase the Pillsbury and Martha White dessert operations, the Hungry Jack potato and breakfast foods business and certain Pillsbury bake mix products, as well as General Mills’ Robin Hood flour brand. General Mills had been expected to sell the dessert mix brands to win antitrust approval for its Pillsbury deal. (WSJ 2/6/01)
Procter & Gamble Co. (PG) said in a press release Thursday that Gary T. Martin will retire as president, global tissues and towels, on April 1. A spokeswoman for the company said Martin’s replacement hasn’t been named yet. (DJ 2/1/01)
High Tech
Dell Computer Corp. (DELL) obtained a consent judgment against Dellkorea.com for violating the Anticybersquatting Consumer Protection Act of 1999. In a press release Friday, Dell said it had filed a civil action in November alleging that Delllkorea.com infringed and diluted Dell’s trademark. As a result of the final judgment Thursday, the court shut down the Web site and ordered the domain name registration for Dellkorea.com be permanently transferred to Dell. (DJ 2/2/01)
Microsoft Corp., scrambling to squeeze more cash out of core products, is renaming and repositioning its Windows and Office programs to dramatize a shift toward Internet-based software and services. The company plans to call coming versions of those products Windows XP and Office XP, initials that stand for the word “experience.” Chairman Bill Gates, in a memo to his senior staff, says the change reflects a move beyond individual applications to integrated combinations of computing functions that are based on various programs and devices. (WSJ 2/5/01)
The U.S. Court of Appeals has ordered oral arguments regarding District Court Judge Thomas Penfield Jackson’s conduct of the Microsoft Corp. (MSFT) antitrust case. That is a rejection of a format suggested by Microsoft and the Justice Department for the Feb. 26-27 oral arguments in the appeal of the landmark antitrust case. Both sides suggested simply relying on written briefs already filed outlining their views toward Jackson’s conduct of the trial and controversial comments he made to reporters afterwards. The Appeals Court’s format also increases the amount of time allotted for arguments to seven hours from four and a half. It shifts the emphasis on some issues, adding an hour to arguments on whether Microsoft sought to illegally maintain a monopoly on its Windows operating software, 30 more minutes on Jackson’s order to break up the company and impose business restrictions, and an hour for the arguments regarding Jackson’s conduct of the trial and statements outside of the courtroom. (DJ 2/7/01)
Sprint Corp. (FON) plans to expand its international Internet backbone throughout Europe and Asia, connecting 15 cities in 13 European and Asian countries on Sprint’s global IP network by the end of 2001 and 35 countries by the end of 2003. In a press release Tuesday, Sprint said it plans to connect key business centers in Europe with a 10 Gbps backbone. The company said it now has IP services available in London and plans to have IP nodes in 14 other major European and Asian cities by the end of the year, including Paris, Frankfurt, Amsterdam, Milan, Brussels, Stockholm, Copenhagen, Dublin, Hamburg, Munich, Sydney, Singapore, Tokyo and Hong Kong. (DJ 2/6/01)
Sun Microsystems Inc. (SUNW) agreed to acquire LSC Inc., a privately held data storage software firm, in a stock transaction valued at about $74 million. In a press release Friday, Sun Microsystems said it expects the acquisition to add to pro forma earnings. The transaction will be accounted for as a purchase, and in-process research and development charges are expected to be immaterial. The transaction requires governmental approval, LSC shareholder approval and customary closing conditions. (DJ 2/2/01)
