Hudson's Bay buying Saks for about $2.4 billion
NEW YORK (AP) — Luxury retailer Saks Inc. agreed to sell itself to Hudson's Bay Co., the Canadian parent of upscale retailer Lord & Taylor, for about $2.4 billion.
The deal combines three department-store brands — Hudson's Bay, Lord & Taylor and Saks Fifth Avenue— and creates a North American upscale retailing behemoth with 320 stores in some of the biggest and most populous cities in the U.S. and Canada.
Lord & Taylor and Hudson's Bay, Canadian's biggest department store chain, both cater to well-heeled shoppers and the addition of Saks, which tends to cater to even more affluent shoppers, broadens its luxury reach. The company said its goal is to bring Saks luxury brand into Canada. It also plans to renovate Saks stores and to make the brand more "luxurious."
Omnicom, Publicis to combine into biggest ad firm
PARIS (AP) — Omnicom Group Inc. and Publicis Groupe SA say they are combining in a "merger of equals" that will create the world's largest advertising firm, one worth more than $35 billion.
The combined company will be called Publicis Omnicom Group and be jointly led by Omnicom CEO John Wren and Publicis CEO Maurice Levy as co-chief executives. The move is designed to bolster the companies' focus on growing Asian and Latin American markets such as China and Brazil, where they each have ramped up operations to counter lackluster growth in weak European markets.
But although a combined firm will allow for more pricing power in general, the decrease in competition could present regulatory hurdles in the U.S. and Europe. Client conflicts also could be an issue, as rivals such as Coca-Cola Co., PepsiCo, McDonald's, Yum Brands' Taco Bell, Johnson & Johnson and Procter & Gamble now find themselves under the same umbrella.
Perrigo to buy Elan for $8.6B, seeks tax savings
DUBLIN (AP) — U.S. drugmaker Perrigo agreed Monday to buy Ireland's Elan for $8.6 billion in a deal that should allow the rapidly growing company to reduce its tax bill and boost its royalty stream.
Perrigo Co. said it would pay Elan Corp.'s investors $6.25 per share in cash and $10.25 in Perrigo stock, an 11 percent premium over Elan's closing price Friday.
Elan said earlier this month that it would consider better offers after spending several months defeating a series of hostile, lower-priced takeover bids by Royal Pharma. Several potential U.S. suitors sought to acquire Elan's flow of royalties from drugs it helped develop, particularly the multiple sclerosis fighter Tysabri.
Generic drug maker Perrigo, which has been headquartered in the small western Michigan town of Allegan since 1887, said it would move its tax residence to Ireland and hopes to cut its tax liabilities nearly in half as it grows non-U.S. sales.
Bernanke to give deposition in AIG bailout lawsuit
WASHINGTON (AP) — A U.S. judge has ordered that Federal Reserve Chairman Ben Bernanke can be questioned in a lawsuit against the government filed by the former head of American International Group Inc.
It is rare for a Fed chairman to be deposed in a lawsuit. But Judge Thomas Wheeler of the U.S. Court of Federal Claims said Monday that he made an exception because Bernanke has firsthand knowledge of the government's decision to bail out AIG at the height of the financial crisis.
Hank Greenberg, the former AIG CEO, has sued the government over the $182 billion bailout, which AIG has since repaid. Greenberg claims the terms of the bailout were too onerous and is seeking at least $25 billion.
Greenberg's lawyers want Bernanke deposed on Aug. 16. Wheeler said that date was acceptable to him, though lawyers for the government may wish to choose another date.
Spokesman David Skidmore said the Fed had no immediate comment.
Pending sales of US homes slip from 6-year high
WASHINGTON (AP) — The number of Americans who signed contracts to buy homes dipped in June from a six-year high in May, a sign that sales could stabilize over the next few months.
The National Association of Realtors said Monday that its seasonally adjusted index for pending home sales ticked down 0.4 percent to 110.9 in June. The May reading was revised lower by a percentage point to 111.3, but it was still the highest since December 2006.
The slight decline suggests higher mortgage rates may be starting to slow sales. Still, signed contracts are 10.9 percent higher than they were a year ago. There is generally a one- to two-month lag between a signed contract and a completed sale.
Economists were relieved after seeing only a modest decline. They said that shows higher mortgage rates are having only a small impact on the home sales market.
Valeant to cut jobs, move Bausch + Lomb HQ
NEW YORK (AP) — Valeant said Monday that it will eliminate as much as 15 percent of its workforce and move Bausch + Lomb's headquarters to New Jersey as part of its $8.7 billion acquisition of the company.
Valeant said in a letter to workers that after the deal closes, it will eliminate between 10 percent and 15 percent of positions companywide. That works out to between 1,850 and 2,775 people and is expected to include both Valeant and Bausch + Lomb workers.
The Canadian drugmaker said it will remain based in Quebec, but it will move Bausch + Lomb's Rochester, N.Y., headquarters to New Jersey. The U.S. company's three businesses will be combined into one unit.
Valeant said it will continue to operate all of its current U.S. manufacturing locations, including those in Rochester. It added that it expects to receive regulatory approvals by early next month and hopes to close the deal as soon as possible after that.
Valeant announced plans in May to by Bausch + Lomb, one of the world's best-known makers of contact lenses, marking a massive expansion of its own smaller ophthalmology business.
Boeing requests wider scrutiny of locator beacons
Boeing Co. has expanded inspections of emergency locator beacons made by Honeywell International to include five more aircraft types after problems were discovered with the transmitters on 787 jets.
Boeing said in a company blog dated Sunday that the aircraft manufacturer is asking operators of 717, Next-Generation 737, 747-400, 767 and 777 airplanes to inspect the battery-operated beacons, which activate in a crash to help rescuers find a plane.
United Airlines and All Nippon Airways last week disclosed issues with the wiring on their Boeing 787's emergency transmitters. That is the same part of the plane that is getting close scrutiny after a parked Ethiopian Airlines jet caught fire at London's Heathrow earlier this month.
Boeing said its expanded request for inspections follows a recommendation by the U.K. Air Accidents Investigation Branch that airplane models with the Honeywell locator beacons be reviewed. It said the purpose of these inspections is to gather data to support potential rulemaking by regulators.
Amazon.com looks to fill 7,000 jobs in 13 states
NEW YORK (AP) — Amazon.com Inc. says it is adding 7,000 jobs in 13 states, beefing up staff at the warehouses where it fills orders, and in its customer service division.
The company says it will add 5,000 full-time jobs at its U.S. distribution centers, which currently employ about 20,000 workers who pack and ship customer orders.
The world's largest online retailer has been spending heavily on order fulfillment, a strategy meant to help the business grow, but one that has also weighed on profit margins. The company said last week that it lost money in the second quarter, even as revenue increased.
By The Associated Press=
The Dow Jones Industrial average fell 36.86 points, or 0.2 percent, to close at 15,521.97. The Standard & Poor's 500 index dropped 6.32 points, or 0.4 percent, to 1,685.33.The Nasdaq composite dropped 14.02 points, or 0.4 percent, to 3,599.14.
U.S. benchmark crude lost 15 cents per barrel to finish at $104.55 in New York. Natural gas for September fell 9 cents to finish at $3.47 per 1,000 cubic feet. Wholesale gasoline for September fell 3 cents to finish at $2.98 a gallon. Heating oil for September rose less than a cent to end at $3.02 a gallon.
Brent crude, the benchmark for international crudes, rose 28 cents to end at $107.45 in London.