U.S. Foodservice Charges
The former finance chief and a marketing executive at U.S. Foodservice of Columbia were indicted on charges of improperly boosting the company's earnings by $800 million through phony promotional rebate payments from suppliers. Two lower-level officials pleaded guilty to related charges. Former executives at Foodservice's parent company, Dutch grocery giant Royal Ahold, remain under government scrutiny, as does Foodservice's former chief executive.
Record Home Sales
Sales of existing homes set a new record in June, climbing 2.1 percent from May to an annual rate of 6.95 million sales. The increase was spurred by tight supplies and strong demand from buyers fearing higher interest rates, defying economists' predictions of a slowdown. The median home price increased to a record $191,800, up 9.6 percent from 2003. New home sales did drop, however, to an annualized rate of 1.33 million sales, a 0.8 percent decline from May.
Generic drug manufacturer Mylan Laboratories agreed to acquire specialty drugmaker King Pharmaceuticals in a $4 billion stock swap. The acquisition reflects a broad diversification trend by generic drug companies eager to enter the branded-drug market. With the purchase of King, Mylan will gain access to a 1,200-member sales force, which has been successfully marketing King's big seller, the blood-pressure medicine Altace.
Royal Dutch/Shell Fines
Royal Dutch/Shell Group agreed to pay $151 million in fines to settle investigations by American and British securities regulators that it overstated its oil and gas reserves, a closely watched indicator of an oil company's future production capability, by 23 percent. Shell agreed to set up a comprehensive internal compliance program. The company still faces probes by European regulators and the U.S. Justice Department.
Papering Over Legacy
Boise Cascade is getting out of the lumber and paper business in which it made its name, selling those assets to a private firm for about $3.7 billion. The company will focus on selling office supplies and be renamed OfficeMax Inc., after the retailer it acquired in December. Meanwhile, Target completed its $3.2 billion sale of its Marshall Field's division to May Department Stores and said it plans to sell its Mervyn's stores to a group of investment firms for $1.7 billion.