Marsh & McLennan, a subject of New York state Attorney General Eliot L. Spitzer's investigation of insurance bid-rigging, said it will lay off 3,000 employees, about 5 percent of its workforce. The brokerage said most of the layoffs would come in its risk and insurance businesses, but that others would affect two subsidiaries, Putnam Investments and Mercer, a consulting service. Marsh & McLennan said it would take restructuring charges of about $325 million over the next six months to cover the costs. It also disclosed that it reached a tentative $40 million settlement agreement with the Securities and Exchange Commission over questionable brokerage practices at Putnam.
Anthem, WellPoint Merger Approved
The $16.4 billion merger of Anthem and WellPoint Health Networks was approved by California's insurance commissioner. The merger will create the nation's largest health insurance company, with 26 million members. Federal regulators approved the merger in February, but the state insurance commissioner blocked the deal until Indiana-based Anthem agreed not to raise premiums in California to cover merger costs, and to contribute $265 million to train nurses and provide health care in underserved communities.
U.S. wholesalers increased inventories by 0.5 percent in September, the smallest increase since April, the Commerce Department said, suggesting that companies were becoming tentative about the pace of economic growth. Sales growth also slowed. The increase in supplies at distribution centers, warehouses and terminals brought the value to $319.3 billion and followed a gain of 1.1 percent in August.
Dell said it will build a manufacturing plant in North Carolina that will employ 1,500 people within five years. The computer maker expects to spend about $60 million on the plant in its first year and a total of about $115 million over the next five to 10 years, a spokeswoman said. The plant, set to open in 2005, is the third the company has announced this year.
Lucent Technologies reached a tentative contract with its largest unions that calls for some retirees to contribute to the $800 million annual cost of their health care. The proposed accord guarantees jobs for about 1,800 of Lucent's 3,250 technicians and ends premium-free health care for some of the 120,000 union-represented retirees.
The Alabama Supreme Court issued an order indicating that attempts to settle the $3.6 billion legal dispute between the state and Exxon Mobil through mediation have failed. The order declared the case to be back before the court.
Adelphia Communications' unsecured creditors offered a reorganization plan for the cable television firm, seeking stock in the new company. The plan also would give creditors a say in naming new directors and allow lawsuits against Adelphia's former executives, auditors and co-borrowing lenders to continue. Like Adelphia's plan, which executives filed in February, the unsecured creditors' plan values Adelphia at $17 billion.
Bank of New York's mutual fund transactions are under investigation by government and self-regulatory agencies. The activities include possible market-timing transactions, or rapid in-and-out trading, cleared by the company's Pershing unit for Mutuals.com and other introducing brokers.
Moody's Investors Service reduced its rating of Merck's long-term debt by two levels to AA2 from AAA because the drug manufacturer's Sept. 30 withdrawal of the Vioxx painkiller reduced revenue and increased litigation risks. The action affects $4.9 billion worth of long-term obligations, Moody's said.
Honda plans to spend $100 million to build a transmission plant in Tallapoosa, Ga., part of a $270 million investment in its North American powertrain operations. The automaker will also add gear production at a transmission plant in Ohio and production of engine parts at an Alabama engine factory.
Microsoft shareholders approved changes to the company's stock compensation plans, clearing the way for the company to award a one-time, $3-per-share dividend. The $32 million dividend will be paid Dec. 2 to shareholders of record on Nov. 17.
Capital One Financial said it will eliminate about 750 jobs in Richmond and Washington state as part of its previously announced outsourcing plan. The job cuts will leave the McLean-based credit card issuer's workforce at fewer than 16,000, compared with 17,760 at the end of 2003. The work will go to First Data Corp., a Colorado-based technology and electronic commerce firm, which will perform the work in the United States, a Capital One spokeswoman said. Some positions will be offered to former Capital One workers.
Euro Disney, Europe's largest theme-park operator, posted a fiscal 2004 loss of 145.2 million euros ($188 million), its largest in a decade and about 2.5 times more than it lost in fiscal 2003. Expenses included the cost of talks to refinance $2.7 billion in debt, which 39-percent stakeholder Walt Disney Co. and other creditors agreed to in September. Fourth-quarter revenue rose 3 percent from a year ago.
Cisco Systems said higher sales lifted fiscal first-quarter profit 27 percent to $1.4 billion, compared with the same period ended Oct. 30 last year. Revenue for the networking giant rose 17 percent to $5.97 billion.
Computer Sciences said its fiscal second-quarter profit rose 22 percent to $130.5 million. Revenue for the quarter ended Oct. 1 was up 9 percent to $3.93 billion.
May Department Stores said third-quarter earnings fell 81 percent, to $8 million. Revenue rose 17 percent to $3.48 billion.
Wheeling-Pittsburgh reported third-quarter profit of $35.6 million on $401.8 million in revenue. Wheeling-Pitt was in Chapter 11 bankruptcy protection for part of the third quarter last year, so comparable figures are unavailable.
EchoStar Communications said third-quarter profit nearly tripled to $102 million. Revenue rose 28 percent to $1.86 billion.
Abercrombie & Fitch said its third-quarter earnings fell 21 percent to $40.1 million, citing a nearly $33 million one-time charge to settle three class-action lawsuits related to workforce diversity. Sales rose 17 percent to $520.7 million.
Liberty Media said third-quarter profit was $372 million, up from $41 million, helped by its purchase of the QVC shopping network. Revenue was $1.83 billion, up from $877 million.
Gemstar-TV Guide International said its third-quarter loss widened to $98.3 million, from a $18.1 million loss in the same period last year, as it wrote down the value of TV Guide assets. Revenue rose to $175.1 million, from $165.1 million.
Cablevision Systems narrowed its third-quarter loss to $63.2 million, compared with a loss of $107 million in the third quarter last year. Revenue was $1.17 billion, up from $975.77 million.
AMC Entertainment said its second-quarter loss widened to $12.4 million, compared with a loss of $5.1 million in the same quarter last year. Revenue was $462 million, up from $436.6 million.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.