Xerox in $6B deal to expand tech services business
NEW YORK (AP) -- Xerox Corp.
said Monday it will buy Affiliated Computer Services Inc. for about $6.4
billion in cash and stock, joining the expensive race among technology
companies to broaden their offerings.
Xerox said the deal will
create a $22 billion business that combines Xerox's copiers, printers and
document management services with the "business process outsourcing"
of Dallas-based ACS. Outsourcers like ACS take on tasks for other companies,
such as helping to manage payroll or run health care plans.
With the drop in Xerox's
share price, the deal was worth roughly $5.7 billion.
Abbott buys Solvay pharma
operations for $6.6B
NEW YORK (AP) -- Abbott
Laboratories on Monday said it would pay $6.6 billion for the pharmaceutical
business of Belgian chemicals maker Solvay in a move to further expand
internationally and add to its product portfolio.
The deal is the latest in a
string of drug mergers and acquisitions, and one of three announcements Monday
that involved the fast-growing vaccines business.
By purchasing Brussels-based
Solvay, Abbott gains access to emerging markets in Eastern Europe and Asia
along with new therapeutic areas, including hormone therapies and vaccines.
Xerox, Abbott deals boost
stocks; Dow gains 124
NEW YORK (AP) -- A burst of
corporate dealmaking is giving investors a shot of confidence about the
economy.
Stock indexes rose more than
1 percent Monday to post their biggest gains in about a month, breaking a
three-day slide. The Dow Jones industrial average jumped 124 points, recouping
much of what it lost last week. The Dow rose 124.17, or 1.3 percent, to
9,789.36, its biggest gain in more than a month.
Large acquisitions from
Abbott Laboratories and Xerox Corp. vaulted shares of drugmakers and technology
companies higher, and the buying spread to other parts of the market as
investors hoped that the $6 billion-plus deals could be a sign that deal
activity is finally picking up a year after the financial system nearly froze.
FDIC expected to require
banks to prepay fees
WASHINGTON (AP) -- The
Federal Deposit Insurance Corp. may take the unprecedented step of ordering
banks to prepay about $36 billion in premiums to shore up the shrinking deposit
insurance fund.
The FDIC board likely will
call for "prepaid" bank insurance premiums at its meeting Tuesday,
three industry executives and a government official said. The banking industry
prefers that option over a special emergency fee -- which would be the second
this year. The officials spoke on condition of anonymity because the decision has
yet to be made public.
It would be the first time
the FDIC has required prepaid insurance fees. Under the plan, banks would have
to pay in advance their insurance premiums for 2010-2012, bringing in about $12
billion for each of the three years, two of the officials said. That is the
normal amount of insurance fees, though it could vary somewhat according to
growth in total insured deposits -- the basis for determining the fees.
Gas dips below $2.50 for
first time in 2 months
UNDATED (AP) -- The average retail
price for gasoline dipped below $2.50 a gallon for the first time in two months
Monday as swelling oil supplies and slumping demand overshadowed even a fire at
a major U.S. refinery.
Friday's fire at a Tesoro
refinery in Los Angeles, which processes roughly 100,000 barrels of crude oil a
day into gasoline, jet fuel and other products, will likely lead to some higher
pump prices in California, but the effect is muted elsewhere, said analyst and
trader Stephen Schork.
The average price for a
gallon of regular gasoline nationwide was $2.499, the U.S. Energy Information
Administration reported Monday. That's $1.13 below what drivers were paying at
this time last year.
Ex-Enron broadband exec gets
16 months in prison
HOUSTON (AP) -- The former
chief executive of Enron Corp.'s failed Internet business was sentenced Monday
to 16 months in prison for lying about the capabilities of the once mighty
energy giant's broadband network in order to help pump up the company's stock
price.
The former broadband unit
CEO also agreed to pay $8.7 million in restitution.
Joseph Hirko apologized for
his actions before being sentenced. He had previously pleaded guilty to one
count of wire fraud as part of a plea deal with federal prosecutors.
Zoellick advocates greater
role for US Treasury
WASHINGTON (AP) -- The
president of the World Bank said Monday he opposes giving more authority to the
U.S. Federal Reserve, arguing instead that the Treasury Department is better
equipped to manage financial crises.
Robert Zoellick also suggested
in a speech that the dollar's role as a the world's reserve currency may be
diminishing and the United States should recognize this fact.
Zoellick, a former
high-ranking U.S. government official and investment banker, said Treasury as a
part of the executive branch of government would be subject to greater
oversight by Congress and the American public if given additional authority.
Johnson & Johnson buys
18 percent stake in Crucell
TRENTON, New Jersey (AP) --
Health care giant Johnson & Johnson is jumping into the increasingly hot
vaccine business by taking an 18 percent stake in Dutch biotechnology company
Crucell NV and focusing more on preventive medicine.
Under the deal the companies
announced Monday, Johnson & Johnson is spending $440 million for new shares
of Crucell in a deal focused initially on developing a universal vaccine or
treatment against influenza from Crucell's genetically engineered antibody
technology.
A universal flu vaccine --
one that would work against all or most strains rather than having to be
reformulated every flu season -- has been an elusive goal some other
pharmaceutical companies have abandoned. Amid the swine flu pandemic, it has
suddenly become a bit of a Holy Grail.
Ex-CEO of Pa. drinks-maker
charged in $806M fraud
PITTSBURGH (AP) -- A federal
grand jury accused the former chief executive officer of a defunct
soft-drink-maker and four others connected to the company of perpetrating an
$806 million bank fraud, much of which went to the ex-CEO and his family.
Gregory Podlucky, 48, of
Ligonier, provided financial institutions and equipment suppliers "with
dramatically false financial statements" to get equipment leases and loans
for Latrobe-based Le-Nature's Inc., said U.S. Attorney Mary Beth Buchanan. She
called the "largest fraud in the history of the Western District of
Pennsylvania," a 25-county area.
According to the 29-count
indictment unsealed Monday, lenders and investors poured money into the company
on the basis of the phony financial statements..
Star Tribune emerges from
bankruptcy protection
MINNEAPOLIS (AP) -- The Star
Tribune emerged from bankruptcy protection Monday with its main lenders
becoming the new owners and its debt slashed by 80 percent.
Out from Chapter 11, the
Star Tribune can now make decisions without a judge's supervision, as
Minnesota's largest newspaper and the nation's 14th largest on weekdays tries
to ride out an advertising drought and boost revenue in print and online.
The move was largely
expected after a federal bankruptcy judge in New York approved the Star
Tribune's reorganization plan Sept. 17. The newspaper had filed for bankruptcy
protection eight months earlier, saddled by debt from Avista Capital Partners'
2007 purchase of the newspaper from the McClatchy Co.
By The Associated Press
The Dow rose 124.17, or 1.3
percent, to 9,789.36.
The broader Standard &
Poor's 500 index rose 18.60, or 1.8 percent, to 1,062.98, and the Nasdaq
composite index rose 39.82, or 1.9 percent, to 2,130.74.
Benchmark crude for November
delivery rose 82 cents to settle at $66.84 a barrel. Gasoline for October
delivery on Nymex rose 1.75 cents to settle at $1.638 a gallon.
In other Nymex trading,
heating oil gained 1.38 cents to settle at $1.6909 a gallon. In London, Brent
crude rose 43 cents to settle at $65.54 on the ICE Futures exchange. Natural
gas for November delivery fell 11.8 cents to settle at $4.83 per 1,000 cubic
feet with some key storage facilities nearing capacity.