Tuesday, July 08, 2003

Follow-ups and mergers Insurance American International Group (AIG) just picked up discards from General Electric's hand. In a $2.5 billion dollar deal, it purchased GE's Japan-based GE Edison Insurance Company. It also bought GE's American auto- and home insurance businesses. The move makes AIG the sixth largest Japanese insurance company. GE will focus in the US on mortgage insurance, reinsurance, life and long-term care insurance and annuities. "GE is looking to be in fewer lines of insurance, where the returns are highest and where the company sees opportunity for growth." (Wall Street Journal, 6/26//03 and 6/27/03 GE is also getting rid of other insurance units. AIG is number 23 in the Fortune 500, General Electric is number 5. Thus do the big oligopolies rearrange their holdings. Ice cream With the Dreyer's acquisition under its belt, Nestle is ready to engage on the latest front of the ice cream war with rival Unilever. (Wall Street Journal, 6/26/03) "Their focus has been on so-called novelties, single-serving products such as Dreyer's Starbucks Frappucino bars and Ben & Jerry's Peace Pops. These frozen treats carry high profit margins, in some cases 15% to 20% higher than those of the 'tubs' shoppers buy in supermarkets." The companies have been pushing point-of-sale freezer cabinet in stores, to compete with candy and gum at the checkout line. The idea is to get into non-grocery locations like gas stations and movie theaters. Nestle was allowed too keep most of Dreyer's powerful distribution arm after the merger, giving the company a big advantage in this new contest, where Unilever has to go through third parties or build its own distribution channel. Vivendi, Liberty Media There's a few new wrinkles in the ongoing auction of Vivendi Universals entertainment assets. Liberty Media, considered by some to be the favorite bidder, recently bought control of the QVC cable shopping channel from Comcast (it already j had a minority position). Comcast, in turn, is looking to lower its debt, incurred when Comcast bought out AT&T's cable system. At the same time, Vivendi reviewed its first-round offers, and ended up telling the suitors that, for now, that the Universal Music Group is not for sale. Right now the top bidders are Liberty Media, a group of investors backing Edgar Bronfman, the Seagram's heir, and a group of investors backing MGM. The question now is whether Liberty now has too much on its plate, and may forego acquiring the Vivendi properties. (Wall Street Journal, 7/7/2003) Trucking #2 US shared-load trucking company, Yellow Corp, of Overland Park, KS, has announced it will acquire #1, Roadway of Akron OH.  The nearly $1 billion deal, if approved,  will create one of the world's largest shipping companies. Shared-load truckers speaiclize in delivering multiple loads on one truck, as opposed to full-load truckers, which work for one company per truckload. 6:45:42 PM

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