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Vol. 2 ::
No. 11 October, 2000 (Aswin-Kartik) |
World Brief
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World Brief |
Japan’s Kyoei Life Insurance Co. collapsed becoming the country’s biggest life insurance failure after the second World War.
According to reports, the Japanese company had been seeking to rehabilitate itself through a capital tie-up with American gaint Prudential Insurance Co. But negotiations failed leading to Kyoei’s deterioration and collapse. It is also reported that Kyoei has filed for court protection and has given up continuing business on its own.
Only weeks ago, Chiyoda Mutual Life Insurance Co. had been the largest insurer to file for bankruptcy with assets of 3.5 trillion yen (US$ 32.3 billion) since World War II. Kyoei, established in 1935 and employing over 12,000 people, had assets worth 4.53 trillion yen (US$ 42 billion) as of March end.
Times Inc., which is a subsidiary of media giant Times Warner, has announced its plan to acquire Times Mirror magazines from the Tribune Company. The acquisition is slated to cost some US$ 475 million and is subject to approval by American regulatory authorieties.
Times Warner, which operates and owns the 24 hour news channel CNN, is the second largest American cable operator, and is rumoured to be in the process of being bought by Internet service provider American Online. Times Inc. is one of the largest US magazine publisher. It also publishes books, music, video and Internet content.
On the other hand, Times Mirror is known for such titles as Golf, Ski, Yachting, Popular Science, and Field and Stream.
Board members of AT & T, the largest US long-distance telephone service and cable television provider, intend to consider dividing the company into four distinct businesses, according to reports.
The split would create business, broadband, consumer and wireless divisions, The New York Times and The Wall Street Journal reported.
The company’s biggest and most profitable unit, the Business Services department, which caters to corporate customers, would become the new AT&T and would create brand-licensing and commercial agreements with the three other businesses, the reports said.
Under the split-into-four proposal, AT&T’s wireless and cable TV operations would become separate companies over the next one to two years. The company’s more than 60 million telephone users would not feel much immediate impact from the plan, quoted the reports and added that the four split units would be able to concentrate on their own strategies and grow more quickly than they would while confined to the larger AT&T scheme.
The reports also reveal that AT&T’s market valuation has dropped by about $70 billion since January – partly because of falling prices in the long-distance industry – and that its stock is trading at around half of what it was a year ago.
The proposed plan would represent the second time the company has been broken up since the federal government supervised the break-up of the Bell system in 1984. AT&T spun off Lucent Technologies and its NCR computer unit in 1996.
Indian IT company Silverline Technologies has bought Hong Kong-based computer software company Sky Capital for US$ 22 million.
According to reports, Sky Capital had revenue of US$ 24.3 million in 1999/2000 which is expected to rise to US$ 30 million in 200/01.
In the last six months, Sky Capital is the third computer software company to be bought by Silverline. The Indian company had bought CIT of Canada for US$ 3 million and US-based TIS Worldwide for US$ 12.5 million.
According to analysts, while Schaumburg-based Motorola and Sweden’s Ericsson are struggling to sell more mobile phones amid slowing growth, market leader Nokia is fast moving ahead. This was indicated by the Finnish company’s report of better-than-expected profit for the third quarter with a 59 percent increase in mobile phone sales.
Motorola, in contrast, lowered its performance expectations blaming industry trends of a slower growth in the mobile phone market. Analysts, however, said that Motorola’s challenges, especially in Europe, was as a result of Nokia’s aggressive move to carve out more market share.
Ericsson is reported to be faring no better with lowered third-quarter profits and plans to reduce its phone production workforce by 40 percent. The company also said that it is witnessing large price cuts in America and Europe alike, that exceed 20 percent.
Analysts however point out that Ericssons and Motorola are affected more by Nokia’s business than the slowing growth rate. They said that the pricing pressures felt by Ericsson was due to Nokia which said that it would focus on gaining market share even if it meant cutting operating margins.
Reports have it that the market share of the "Big Three" phone markets has fallen to 58.1 percent in 1999 on a global basis from 65.1 percent in 1997.
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