Bear Sterns the famous investment bank, will be acquired by rival giant JPMorgan Chase for a bargain $236.2 million (£124.2 million). The last-minute buyout was aimed at averting a Bear Stearns bankruptcy and a spreading crisis of confidence in the global financial system.
Early indications, though, pointed to continued fear about the stability of the US market, as the dollar hit fresh record lows against the euro, gold broke through 1,015 an ounce and Asian stocks sank. JPMorgan said it will guarantee all business - such as trading and investment banking - until Bear Stearns' shareholders approve the deal, which is expected to be completed during the second quarter.
JPMorgan Chase chief financial officer Michael Cavanaugh did not say what would happen to Bear Stearns' 14,000 employees worldwide or whether the Bear Stearns name would survive. (source: The Independent)
Air France-KLM’s takeover offer for Alitalia, the ailing state airline was accepted yesterday and values it at just €139 million (£107 million), a fifth of its market capitalisation at the end of last week.
Alitalia said two weeks ago that it had less than €300 million (£232 million) in cash remaining, having lost more than €3 billion (£2.32 billion) since 2000, and warned it could be forced to stop trading by the middle of the year. Alitalia's problems over the past 10 years include the emergence of the budget airlines Easyjet and Ryanair, which both now provide stiff competition in the airline's home market. However, the company is also regarded as inefficient and over-manned.
The French company plans to cull 1,600 jobs from Alitalia as it cancels unprofitable routes and eliminates inefficiencies. It has also said it will take over only part of Alitalia's ground services division, which could mean the airline faces more job losses than publicly stated.
This business model is likely to put Air France at loggerheads with Italian trades unions, which must back the deal in order for it to go ahead. The takeover also needs clearance from the Italian government, which may take some time following the collapse of the administration led by Romano Prodi in January.
In addition to the €139 million (£107 million) purchase price, Air France has also agreed to buy out the airline's convertible bond holders for €608 million (£471.3 million), taking its total outlay to €747 million (£579.05 million). (source: The Independent) - (further articles on this Velocity Interactive Group - New Investment Company, ArcelorMittal to by China Oriental Group Co., Alitalia SpA in sight for Air France-KLM)
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