Ace Ltd., a global insurance company with North American headquarters in Philadelphia, said yesterday that it had agreed to buy Combined Insurance Co. of America and some of its subsidiaries from Aon Corp. for $2.4 billion in cash, doubling its personal accident and supplemental health insurance business. Ace, which has headquarters in Bermuda and corporate offices in New York, said Combined Insurance has four million policyholders and a sales force of nearly 7,000. Combined Insurance is based in Glenview, Ill. Ace's shares closed up $1.50, or 2.5 percent, at $61.01 on the New York Stock Exchange. Ace employs 2,300 in the Philadelphia region.
- Harold Brubaker
Covidien Ltd., said it was selling its retail-products business in King of Prussia to First Quality Enterprises Inc. for about $335 million. The health-care-products company, which was spun off from Tyco International Ltd. in June, said the sale was consistent with its plans to focus on its main health-care business, which includes surgical instruments, ventilators and syringes. Covidien's retail-products business, which includes products for infant care, adult incontinence, and feminine hygiene, had sales of $744 million in fiscal 2007. Covidien shares closed down $1.05, or 2.4 percent, at $42.85 on the New York Stock Exchange.
- Linda Loyd
PHH Corp., a Mount Laurel mortgage lender and vehicle-leasing company, has found another large institutional shareholder. Luxor Capital Partners L.P., a hedge-fund group managed by Christian Leone, said in a regulatory filing that it had accumulated 5 percent of PHH's stock, or 2.71 million shares. Shares in PHH, whose proposed sale has been stalled by funding difficulties, closed down 71 cents, or 3.5 percent, at $19.69 on the New York Stock Exchange.
- Harold Brubaker
Liz Claiborne is closing a distribution center near Allentown. About 230 workers will lose their jobs. The apparel company announced in July that it planned to eliminate a total of 600 to 800 positions as part of a restructuring to focus on best-selling brands and to reduce costs. Claiborne says it will close the distribution center in Upper Macungie Township in February.
Barry Callebaut, a Swiss cocoa- and chocolate-maker, said it completed its acquisition of Food Processing International Inc., Eddystone. The purchase price wasn't disclosed. Barry Callebaut said it planned to double the capacity of the Eddystone plant over the next two to three years to produce 50,000 metric tons a year of cocoa liquor. Food Processing began production at the plant in 2006 and had existing orders for up to 16,000 metric tons of cocoa liquor and up to 10,000 metric tons of cocoa powder and cocoa butter, the companies said when the deal was announced in October.
- Tom Belden
Adobe Systems Inc. announced that fourth-quarter profit surged 21 percent, beating Wall Street expectations thanks to record revenue. Net income for the three months ended Nov. 30 was $222.2 million, or 38 cents a share, compared with $183.2 million, or 30 cents per share, in the year-ago period. Fourth-quarter sales were a record $911.2 million, up 34 percent from a year ago and easily exceeding the company's own estimates of $860 million to $890 million. The software-maker also announced it would repurchase an additional 30 million shares for a total buyback of 50 million shares. The company, which announced the buyback in April, had repurchased 17.7 million shares through November, leaving about 587.9 million outstanding.
The World Trade Organization opened an investigation into whether the United States was violating international commerce rules that limit subsidies to American farmers, three days after the U.S. Senate approved a new $286 billion farm bill. The WTO set up a panel to rule in the dispute after Brazil and Canada demanded the investigation. Frustrated by U.S. resistance to cutting back on subsidies, the two countries asked the WTO to condemn Washington for exceeding permitted levels of trade-distorting handouts to American producers of crops such as corn, cotton, rice, soybean and wheat. U.S. trade official Juan Millan said Washington's payments have always been below the limits.
Two big drug companies raised their dividends yesterday. Pfizer Inc. raised its dividend to 32 cents a share from 29 cents, starting in the first quarter of next year, according to a statement. And Eli Lilly & Co. is boosting its quarterly dividend 11 percent to 47 cents a share, or $1.88 on an annual basis. The dividend is payable March 10 to holders of record Feb. 15.
- Bloomberg News
Lawmakers agreed to increase funding for a loan program to guarantee up to 80 percent of nuclear-reactor construction costs - a move designed to rally the nation's nuclear-energy revival. The legislation contains a two-year approval of the loan-guarantee program and directs the secretary of energy to provide $20.5 billion for nuclear energy - $18.5 billion for nuclear reactors and $2 billion for uranium enrichment - as well as $10 billion for renewable energy and energy efficiency and $8 billion for clean-coal technology. Nevada Republican Pete Domenici, ranking member of the Senate Energy and Natural Resources Committee, said the deal was part of the fiscal 2008 Omnibus Appropriations bill Congress is expected to approve this week.
F. David Radler, former publisher of the Chicago Sun-Times and No. 2 man in the Hollinger International newspaper empire, was sentenced to 29 months in prison for his role in stealing millions of dollars from Hollinger shareholders. "I'm sorry for what I've done," said Radler, 65, who had pleaded guilty to fraud and testified against his longtime business partner and head of Hollinger, Conrad Black, in return for a lenient sentence.
Interest rates on short-term Treasury bills were mixed in yesterday's auction. The Treasury Department auctioned $21 billion in three-month bills at a discount rate of 3.000 percent, unchanged from last week. An additional $20 billion in six-month bills was auctioned at a discount rate of 3.280 percent, up from 3.190 percent last week. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,924.17 while the six-month prices was $9,834.18.
The Federal Reserve said yesterday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.20 percent last week from 3.17 percent the previous week.