Wachovia is buying competitor SouthTrust in a $14.3 billion deal that will create the largest bank in the Southeast and further Wachovia's plans to aggressively expand in Texas. SouthTrust has 60 bank branches in several key Texas markets and was preparing to build at least 30 new branches, said SouthTrust's chairman and chief executive, Wallace D. Malone Jr. After the merger, Wachovia will have $464 billion in assets and market capitalization of $76 billion, maintaining its position as the nation's fourth-largest bank in terms of assets. The deal calls for Charlotte-based Wachovia to exchange 0.89 shares of its common stock for each share of Birmingham-based SouthTrust. G. Kennedy Thompson, Wachovia's chief executive, said the bank plans to close between 130 and 150 bank branches and eliminate about 4,300 jobs after the merger is completed.
Stewart Says She Misses Her Old Job
Martha Stewart told shareholders that she misses her old position at her namesake company and hopes the domestic empire she founded functions as usual while she deals with her legal woes. "I miss my old job terribly," said Stewart, who resigned as chief creative officer and from the board of Martha Stewart Living Omnimedia in March after she was convicted of lying about a stock sale. Shareholders were generally supportive of Stewart, but there was disagreement about whether the company should sever its ties to her.
Delta agreed to spend $900,000 for worker civil rights training after U.S. regulators found that the carrier improperly kept off flights some travelers perceived as Arab, Middle Eastern, Southeast Asian or Muslim. The settlement is the fourth by a U.S. airline regarding passenger treatment after the Sept. 11, 2001, terrorist attacks, the Transportation Department said. Delta said it didn't discriminate and denies it violated federal law.
Augustine Cruciotti, former executive vice president of Qwest Communications International, will pay $354,000 to settle Securities and Exchange Commission charges related to overstating company revenue by $27 million in 2001. Steven Haggerty, a former Qwest regional vice president, also agreed to pay $30,000 and cooperate in the investigation. Separately, former Qwest executive Thomas Hall pleaded not guilty to fraud charges in an alleged scheme to improperly book nearly $34 million in revenue.
Alan Greenspan was sworn in for a fifth term as chairman of the Federal Reserve. Vice President Cheney administered the oath in a private ceremony in Denver.
SBC Communications faces a strike by 11,300 technicians and customer-service representatives in Illinois and northwestern Indiana after about 97 percent of the International Brotherhood of Electrical Workers Local 21 voted to walk out.
T-bill rates fell. The Treasury Department sold $17 billion of three-month bills at a 1.315 percent discount rate, down from 1.390 percent last week, and $15 billion of six-month bills at a 1.675 percent rate, down from 1.720 percent. The actual return to investors is 1.336 percent for three-month bills, with a $10,000 bill selling for $9,966.80, and 1.713 percent for a six-month bill selling for $9,915.30. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 2.22 percent from 2.07 percent last week.
Three former bankers are contesting extradition from Britain to face charges in the United States that they stole $7.3 million in an Enron-related fraud. David Bermingham, Gary Mulgrew and Giles Darby, who each face seven counts of wire fraud, appeared before Bow Street Magistrates Court in London. They were indicted by a Houston grand jury in 2002 for using an Enron off-the-books partnership to defraud their employer, Greenwich NatWest, which is now a part of Royal Bank of Scotland Group.
Intel lost a U.S. Supreme Court dispute with rival Advanced Micro Devices over when companies can be forced to produce documents for use in overseas investigations. The court ruled 7 to 1 that Advanced Micro can use U.S. courts to seek sealed documents from Intel to bolster its claim that Intel used anticompetitive practices in Europe.
Motorola said a planned initial public offering of its Freescale Semiconductor unit may raise as much as $2.37 billion, with about $1.5 billion going to the mobile telephone manufacturer. Motorola is selling about 30.4 percent of Freescale but will retain control of 90 percent of the shareholder votes.
Computer Sciences said it expects to get $250 million in work to install and manage software for the Department of Defense. The agency is spending $1 billion for software to manage its payroll and purchasing. BearingPoint, Accenture, Deloitte Consulting and IBM are also eligible to handle the work.
U.S. prosecutors engaged in a "witch hunt" at Adelphia Communications after the company's stock market collapse in 2002, a lawyer for former finance chief Timothy J. Rigas told jurors at Rigas's fraud trial. Defense attorney Paul R. Grand said that Timothy Rigas, who is on trial with father, John, and his brother Michael, was a victim of prosecutors who wanted to punish corporate villains after the bankruptcy of Enron in December 2001.
Global Crossing, a fiber-optic network operator that exited bankruptcy in December, said Deloitte & Touche found no "management integrity issues" in its investigation of faulty accounting related to its 2003 results. Chief executive John J. Legere, who took over in October 2001, said the company is implementing more stringent controls.
Hitachi plans to invest $200 million in a hard-disk-drive factory that will employ 7,000 people in the Chinese border city of Shenzhen. The 390,000-square-foot plant is expected to open in late 2004. Hitachi already has two factories in Shenzhen that make disk components.
Titan said it is still trying to resolve Justice Department allegations that its consultants bribed foreign officials by June 25 so it can complete a $1.66 billion sale to Lockheed Martin a day later. The Bethesda military contractor has made the merger contingent on Titan's reaching a settlement or other resolution with the government.
PalmOne reported earnings of $13.3 million in its fiscal fourth quarter, compared with a $15 million loss in the same period a year ago, as sales of its handheld computers grew. Revenue for the three months ended May 31 rose 23 percent, to $267.3 million.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.