Business News - part 4

PayPal and eBay to Split in 2015

PayPal and eBay to Split in 2015

BUSINESS

  • eBay investor urged split
  • eBay CEO says time is right for split
  • PayPal facing competition from other mobile payment systems

Online auction house eBay Inc. announced payments business PayPal will be spun off into a publicly traded company in the second half of 2015, allowing the businesses to be nimble and evolve to changing market conditions.

Activist hedge fund magnate Carl Icahn, who is eBay's sixth-largest shareholder, had urged the companies to split, saying PayPal would receive a huge premium and a split would remove conflicts of interest.

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SoftBank Makes Offer to Buy DreamWorks Animation

SoftBank Makes Offer to Buy DreamWorks Animation

BUSINESS

  • Offer values movie studio at $3.4 billon
  • DreamWorks has struggled financially
  • SoftBank interested in further expansion

Japan’s SoftBank Corp., the owner of U.S. wireless carrier Sprint, has made an offer to purchase Jeffrey Katzenberg’s DreamWorks Animation SKG Inc. film studio for $32 a share, according to the Hollywood Reporter. The offer values the studio at $3.4 billion.

DreamWorks Animation,which operates separately from Steven Spielberg's DreamWorks Studios, has been struggling financially and has invested heavily in television. It is the smallest Hollywood studio, producing less than four movies annually.

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Royal Phillips to Split into Lighting, Health Tech Companies

Royal Phillips to Split into Lighting, Health Tech Companies

BUSINESS

  • Healthcare a fast growing market
  • Lighting will be able to better adapt to market changes
  • Phillips has history of changing with the times

Dutch electronics company Royal Phillips will split into two businesses – lighting and healthcare technology – as part of a larger strategy to move into fast-growing markets.

The healthcare business, HealthTech, which manufactures hi-tech medical equipment, will merge with Phillips’s consumer lifestyle division.

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Merck Buys Sigma-Aldrich for $17 Billion

Merck Buys Sigma-Aldrich for $17 Billion

BUSINESS

  • Purchase increases company’s portfolio in lab supplies
  • Pharmaceutical business to remain medium enterprise
  • Merck has had better luck with chemical businesses

German drug and chemical manufacturer Merck KGaA is purchasing American lab supply manufacturer Sigma-Aldrich Corp. for $17 billion, boosting Merck’s chemical portfolio and reducing its dependences on pharmaceuticals.

Chemicals and services are a steadier source of income than pharmaceuticals. In recent years, Merck has had a series of drug failures and will keep its pharmaceuticals business, Serono, medium sized.

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Bayer Plans to Separate Plastics Business

Bayer Plans to Separate Plastics Business

BUSINESS

  • Plastics division had been underperforming
  • Bayer to focus on life sciences
  • Separation to benefit both businesses

Germany’s Bayer AG plans to either spin off its plastics business, Bayer MaterialScience, or list it as an initial public offering with shares sold against cash within the next 12 to 18 months. It gives the business funds needed for research and development.

The MaterialScience division has not been profitable with profit margins less than half the company average. Rising material costs have decreased profits.

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California Issues Permits for Self Driving Cars

California Issues Permits for Self Driving Cars

BUSINESS

  • Three other states have issued permits
  • Self operating vehicles use sensor technology
  • California put new regulations in place before issuing permits

California has become the fourth state to issue permits for testing self driving vehicles on state roads.

The California Department of Motor Vehicles permit is $150 for 10 vehicles and 20 drivers. An additional 10 drivers can be added for $50.

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United Airlines Offers Flight Attendants $100,000 Buyout

United Airlines Offers Flight Attendants $100,000 Buyout

BUSINESS

  • Airline hopes 2,100 accept offer
  • Buyout helps prevent future layoffs
  • United only airline to experience quarterly loss

American carrier United Airlines, a unit of United Continental Holdings Inc.,is offering flight attendants a $100,000 lump-sum buyout to prevent future layoffs.

The airline employees 23,000 flight attendants and hopes 2,100 accept the offer.

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Apple iPhone 6 Sets Record for Presales

Apple iPhone 6 Sets Record for Presales

BUSINESS

  • Sales 2 million more than iPhone 5
  • Model not available in all nations Sept. 19
  • Demand is usually greater than supply for Apple Products

Presales for the iPhone 6 and iPhone 6 Plus reached 4 million during the first 24 hours, according to Apple Inc., breaking the record set by the iPhone 5 which sold 2 million in 24 hours.

If sales kept pace all weekend, up to 10 million iPhone 6s were sold. Analysts say the volume of orders reflects customers’ demand for larger screens.

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Lululemon Reports Better than Expected Second Quarter

Lululemon Reports Better than Expected Second Quarter

BUSINESS

  • Online sales helped maintain sales levels
  • Company on track to open new stores
  • Dispute with company founder resolved

Canadian yoga-wear manufacturerLululemon Athletica Inc. reported better than expected earnings for the quarter ending Aug. 3.

Profit fell to $48.7 million while revenue grew 13% to $390.7 million. Sales remained stagnant. Same stores sales decreased 5% while Internet sales increased 30%.

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Apple Pay Ready to Roll Out in U.S.

Apple Pay Ready to Roll Out in U.S.

BUSINESS

  • Apple to receive cut of credit card fees
  • Less than 20% of Americans use mobile payment
  • Rest of world will need to wait for Apple Pay

Apple Inc.’s new Apple Pay mobile payment system will debut in October in the United States. It works by allowing users to pay for purchases with a tap of their iPhone.

The service is similar to those offered by PayPal, Amazon, Google and Facebook, and it is exclusive to the iPhone 6 and iPhone 6 Plus.

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