Tuesday, November 27, 2018

Business News in Brief - Arkansas Democrat-Gazette

On verge of closing deal, say CVS, Aetna

Shares of CVS Health and Aetna are rising with the companies now saying they expect to close their $69 billion tie-up later this week.

The companies say in regulatory filings that they have the final regulatory approval needed and expect to close on or around Wednesday.

CVS Health Corp. had told investors earlier this month that it expected to close the deal for the nation's third-largest health insurer before Thanksgiving. But its shares slipped last week after the drugstore chain and pharmacy benefit manager said it still lacked approval from two states.

The companies plan to dive deeper into providing care with help from CVS' nearly 10,000 locations.

Shares of CVS Health advanced 3.5 percent, while Aetna Inc. climbed more than 2 percent in Monday's trading.

-- The Associated Press

Disney, Fox sued over park-deal pullout

Walt Disney Co. and 21st Century Fox Inc. were sued by the owner of Malaysia's only casino resort for pulling out of an agreement to sponsor a Fox World theme park outside Kuala Lumpur.

Genting Malaysia Berhad seeks more than $1 billion in damages, claiming Disney doesn't want to be associated with its gambling business as the Hollywood giant moves to finalize its acquisition of 21st Century Fox's entertainment assets.

"Unlike Fox, which was perfectly happy to have the park situated a stone's throw from the casinos of Resorts World Genting so long as it could continue to extract financial concessions," Disney wanted no ties to a gambling company because of its "family-friendly" brand strategy, Genting said in a complaint filed Monday in federal court in Los Angeles.

Fox declined to comment on the lawsuit, and representatives of Disney didn't respond to a request for comment.

Fox World was expected to help broaden the casino resort's appeal to the nation's 60 percent-Muslim population and achieve a target of 30 million annual visitors by 2020. Gambling is considered unethical and therefore forbidden under Islam.

Fox entered into a licensing agreement in 2013 with Genting for the development of what would be the first Fox-branded theme park in the world. Unlike Disney, which owns its parks in part or in whole, Genting would own and finance the park completely, with Fox getting a cut of the revenue from retail, food and beverages. Genting has invested $750 million in the park, which was due to open next year, according to the complaint.

-- Bloomberg News

Ghosn ousted as chairman of Mitsubishi

TOKYO -- Carlos Ghosn, one of the auto industry's most powerful leaders, lost another title Monday when the board of Mitsubishi Motors removed him as chairman, one week after he was arrested in Tokyo on suspicion of financial misconduct.

Ghosn, who was stripped of the chairmanship of Nissan last week in a unanimous vote of the board, remains in a Tokyo detention center where he sees his lawyer for about an hour or so each day. He is being questioned by prosecutors after Nissan said he underreported his income to Japanese regulators over several years. He has not been charged with any crime.

In a statement Monday, Osamu Masuko, chief executive of Mitsubishi, said the board had removed Ghosn because "he lost the trust of Nissan and he cannot execute his duties as chairman and representative director any longer."

Masuko added that if Ghosn remained as chairman, it could expose Mitsubishi to "reputation risk."

Prosecutors have also been questioning Greg Kelly, a former Nissan human resources manager who was removed from the company's board last week over allegations that he conspired with Ghosn to underreport Ghosn's compensation in government securities filings and to use company funds for personal expenses.

In his first remarks to the news media, Yoichi Kitamura, a lawyer representing Kelly, said his client denied the allegations.

-- The New York Times

Chevron: Mile-deep Gulf field producing

NEW ORLEANS -- Chevron Corp. says it is now getting oil and natural gas from a floating platform tethered in nearly a mile of water off of New Orleans.

The company says the tension-leg drilling and production platform is in the deepest water of any such facility. The well is in the Big Foot field about 225 miles south of New Orleans.

Chevron estimates that it can get the equivalent of more than 8.4 billion gallons of oil from the field over 35 years.

It announced last week that production had begun at the platform, which is designed to extract up to 3.1 million gallons of oil and 25 million cubic feet of natural gas a day.

Chevron USA Inc. owns 60 percent of the project, Equinor Gulf of Mexico LLC owns 27.5 percent and Marubeni Oil & Gas (USA) LLC 12.5 percent. Equinor and Marubeni are Houston subsidiaries of foreign companies. Equinor -- formerly Statoil SA -- is based in Stavanger, Norway. Marubeni Corp. is based in Tokyo.

-- The Associated Press

Airbus to modify jet with eye on Boeing

Airbus will offer a modified version of its A330neo wide-body jet designed for shorter trips in an effort to undermine demand for a new middle-of-the-market plane that Boeing is expected to launch next year.

The A330neo's engines could be re-rated to a lower level of thrust, helping to reduce the fuel load and cut its takeoff weight, Crawford Hamilton, the plane's marketing chief, said in an interview on Monday in Toulouse, France.

That would make the model better-suited to the midrange routes Boeing would target with its jet, dubbed the 797. While the A330 will remain a bigger plane, Airbus is seeking to chip away at the overall market for the new Boeing, with versions of the A321neo narrow-body jet already eating into the lower end of the same niche with a spate of sales to trans-Atlantic carriers.

The A330neo's maximum takeoff weight stands at 242 metric tons, but that could be cut to 200 tons, while its Rolls-Royce Holdings engines could be re-rated to 68,000 pounds of thrust from 72,000 pounds, Hamilton said.

He spoke after Airbus handed over its first-ever A320neo to Portuguese airline TAP. That delivery is about a year behind schedule after testing issues and delays to the development of its Rolls-Royce's Trent 7000 turbines.

With the A330neo and modifications to the A321neo, Airbus aims to "completely close the gap between the single-aisle and the long-range," said Guillaume Faury, who heads the company's jetliner arm and is due to become group chief executive officer next year.

-- Bloomberg News

Business on 11/27/2018


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