In Business This Week: HEADLINER
IBM: BIG BLUE'S COPPER COUP
IBM has a booming $3.5 billion business selling computer chips to other companies. Sure, it's no Intel. But it does have a few techno-tricks up its silicon sleeve.
On Sept. 22, the computer giant sent shock waves through the semiconductor industry when it announced it had developed a less costly way to make more powerful microchips. The secret: copper, a better conductor than the aluminum currently in use.
Chipmakers have shunned copper because it "corrupts" the silicon in chips. But IBM says that after 10 years of work, it has developed a patented process for affixing copper to the silicon without corrupting it. The result: chips that are up to 40% more powerful and up to 20% cheaper. Test chips are already in production, and IBM says it will have the chips in its computers by the end of '98.
Don't expect IBM to help other chipmakers catch up. IBM says it won't license the technology. But Big Blue will gladly build chips for other companies. So far, about six high-tech companies are interested in putting some IBM inside their machines.EDITED BY BILL JAVETSKI & KELLEY HOLLAND By Ira SagerReturn to top
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WAVING A RED FLAG BEFORE REGULATORS
THE FEDERAL TRADE COMMISSION is going to look long and hard at top drug distributor McKesson's Sept. 23 acquisition of AmeriSource Health. The deal, for $2.2 billion in stock, would give the combined companies a 35% share of the $60 billion market. But scrutiny won't faze McKesson CEO Mark Pulido, analysts say. He all but sought regulators' attention, they say. Why? Because if they nix his deal, they'd likely also zap the $2.62 billion August merger of Cardinal Health and Bergen Brunswig, which gave those companies a similar market share. The ploy might work. Salomon Brothers analyst Lawrence March initially figured the Cardinal-Bergen Brunswig deal had an 80% chance of FTC approval. Now he gives it 60% odds--the same as McKesson's.EDITED BY BILL JAVETSKI & KELLEY HOLLANDReturn to top
UNIVERSAL TUNES IN TO CABLE
SEAGRAM'S UNIVERSAL STUDIOS may go on a shopping spree soon. On Sept. 22, it settled long-running litigation by agreeing to pay Viacom $1.7 billion for the half of the USA cable network it doesn't already own. Universal is now said to be looking at buying other cable channels. One possibility: Cablevision System's Rainbow Programming Unit, which includes Bravo and American Movie Classics. That would give Universal more outlets for its TV and film library. Viacom will use the proceeds to pay down some of its $10 billion debt.EDITED BY BILL JAVETSKI & KELLEY HOLLANDReturn to top
A CONSULTANT TAKES CHARGE AT UNISYS
THE SEARCH IS OVER FOR A new CEO at Unisys. On Sept. 23, the struggling computer maker said it had hired former Andersen Worldwide Chief Executive Lawrence A. Weinbach. Weinbach, who worked for 36 years at the accounting and consulting giant, faces challenges at Unisys. His first order of business: paring the company's $2.3 billion in debt by $1 billion in the next three years. Investors such as Alfred D. Kingsley, senior managing director of Greenway Partners LP--which holds about 8 million Unisys shares--were cheered by the news. "It looks like a good fit," he says.EDITED BY BILL JAVETSKI & KELLEY HOLLANDReturn to top