Business News - part 4

Hewlett-Packard to Split Into Two Companies

Hewlett-Packard  to Split Into Two Companies

BUSINESS

  • Each company to focus on different services
  • Job cuts under current CEO to reach 55,000
  • Company Nearly Split in 2011

Hewlett-Packard Co., the largest technology-industry company, will soon be split in two listed companies in order to focus on each company’s strengths.

HP Inc., the current Printing and Personal Systems Group, will sell PCs and printers. Its revenue is forecasted to be $57.2 billion with an operating profit of $5.4 billion. The company may explore related technologies including 3D printing.

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Sears to Raise Funds by Selling Shares in Canada Unit

Sears to Raise Funds by Selling Shares in Canada Unit

BUSINESS

  • Retailer hopes to raise $380 million
  • Funds needed for holiday inventory
  • Sears has had years of financial struggles

American retailer Sears plans to raise $380 million between mid-October and late-November by selling a 51% stake in Sears Canada to existing shareholders to raise much needed funds before the Christmas season.

Forty million shares were approved by the board of directors for the offering.

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Alcatel-Lucent Sells Equipment Business to Chinese Investment Company for $254 Million

Alcatel-Lucent Sells Equipment Business to Chinese Investment Company for $254 Million

BUSINESS

  • Company in highly competitive market
  • Chinese seem willing to invest
  • Alcatel-Lucent creating new technologies

French equipment vendor Alcatel-Lucent has completed the sale of its IP telephony and Ethernet switching equipment business to industrial investment company China Huaxin Post & Telecommunication Economy Development Center for $254 million.

The sale is part of Alcatel-Lucent’s Shift Plan, which began in June 2013, whose goal is to cut costs, generate asset sales and reestablish the company as a specialist in IP, Cloud and Ultra-Broadband Access.

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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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