Sharp: An investment by Foxconn
Taiwan’s Hon Hai Group (HNHPF), which owns the Foxconn assembly plants that produce iPads and iPhones, is investing $1.6 billion in Japan’s Sharp (6753:JP), a major manufacturer of thin-film transistor liquid-crystal displays. In February, Sharp announced it expects to lose $3.49 billion this fiscal year, partly because an investment in a plant to produce LCDs larger than 55 inches has yet to pay off, as consumers favor smaller sets. Daiwa Securities Capital Markets says the deal—which gives Hon Hai 46.5 percent of the Sharp unit that owns the LCD fab—is more evidence that Apple (AAPL) may be working on an iTV. This is Hon Hai’s third investment in display makers in three years.
Banks: New bank charters hit a low
Last year just two banks opened in the U.S., down from 155 in 2007. That record low marked the fourth year of declines, reflecting the effects of the financial crisis and increasing regulatory scrutiny. Private equity investors have been trying to secure bank charters so they can acquire some of the 400 failed lenders that the government has seized since 2007, but regulators have been hesitant to grant approval, says Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a regulatory consulting firm.
AMR: American asks to end labor contracts
AMR’s (AAMRQ) American Airlines asked a bankruptcy judge to allow the carrier to void contracts with union workers after failing to reach agreements to trim labor costs by $1.25 billion a year. American began talks with its unions shortly after outlining plans on Feb. 1 to trim $2 billion through 13,000 job cuts and other concessions. AMR, based in Fort Worth, Tex., filed for Chapter 11 protection in November after three consecutive years of losses, making it the last of the U.S. industry’s full-service carriers to restructure.
Toys “R” Us: Leaving the IPO on the shelf
After two years of trying to go public, Toys “R” Us is changing its plans and will take out more loans to pay for its current debt obligations. It wants to add $300 million to a loan due in 2018 to help pay off some of its $1.3 billion debt coming due in the next year, two people with knowledge of the matter said. The world’s largest toy retailer, whose sales were flat at $13.9 billion in 2011, declined to comment. Toys “R” Us was acquired by KKR (KKR), Bain Capital, and Vornado Realty Trust (VNO) for $6.6 billion in 2005.
Cosmetics: A new wrinkle for “cosmeceuticals”
Wrinkle creams with retinol are among the treatments that may need to be regulated as drugs. Claims by companies that their “cosmeceuticals” contain active ingredients may classify them as drugs, Michael Landa, director of the Food and Drug Administration’s Center for Food Safety and Applied Nutrition, told Congress on March 27. The Personal Care Products Council says products that claim beautification are a cosmetic, while those that alter the body’s structure or function are drugs.