Companies in Brief
Telefónica: Neighbors Tussle Over a Brazilian Gem
Spain's Telefónica has raised the stakes in its four-year battle to gain full control of Vivo, the Brazilian mobile carrier it owns jointly with Portugal Telecom (PT). On May 25, Telefónica threatened to launch a hostile takeover of Portugal Telecom if the latter does not accept a $7 billion offer for the remainder of Vivo. Portugal Telecom is loath to cash out of the joint venture, however. Vivo commands a 30 percent share of Brazil's 179 million wireless subscriptions and has been a major source of revenue growth for both of its owners.
Teva/Mylan: A Day in Court for Makers of Generics
On May 24 the U.S. Supreme Court signaled interest in hearing an appeal by makers of generic drugs seeking limits on patient lawsuits. The justices asked the Obama Administration whether to accept the appeal by Mylan (MYL) and Teva Pharmaceutical (TEVA) Industries, which are fighting allegations that they provided inadequate safety warnings on metoclopramide, a drug used to treat stomach disorders. The drugmakers argue that a 2009 Supreme Court ruling permitting failure-to-warn suits against brand-name drugmakers should not apply to them because federal law requires generic drugs to have the same packaging as their brand-name counterparts. Lower courts have rejected that contention.
Reliance: Unleashing Fraternal Competition in India
India's estranged billionaire Ambani brothers announced on May 23 that they had torn up a noncompete agreement they drafted in 2005, the year the two divided the family empire. Mukesh Ambani kept petrochemical, oil, and gas units, along with the flagship company, Reliance Industries. Anil Ambani got newer businesses such as power, telecommunications, financial services and entertainment. While it was designed to keep the peace, the ban on competition has stoked tension between the world's richest siblings, ultimately landing them before India's top court. This latest move apparently aims at fostering healthier—if probably no less spirited—rivalry between the two men.
Hewlett-Packard: Beyond Big Blue in Servers
Hewlett-Packard (HPQ) overtook IBM (IBM) to lock up the top spot in global server sales, according to a May 25 report by research firm Gartner (IT). HP, the world's biggest maker of personal computers, logged $3.4 billion in sales in the first quarter, for a a 31.5 percent market share; IBM's share fell to 28.4 percent. HP is benefiting as corporate customers upgrade equipment after delaying purchases during the recession.
AIG: Bailing out of Properties
AIG (AIG) is weighing the sale of its stake in some 17,000 apartments purchased in a partnership with Morgan Properties. AIG and Morgan paid $1.9 billion for 86 apartment complexes in June 2007. Sources familiar with the talks say that Morgan may buy the majority of the insurer's stake but did not say what price AIG is seeking. Prices for U.S. apartments are rebounding but remain far below their 2007 peak. The proposed sale would help AIG to repay loans included in the U.S. government's $182 billion rescue.
Pabst Brewing: Adding the Ingredients for a Beer Deal
Woodbridge (Ill.)-based Pabst Brewing is close to lining up some $90 million in financing to facilitate a buyout by private-equity investor C. Dean Metropoulos. The owner of the Pabst Blue Ribbon and Old Milwaukee brands, which are brewed by third parties under license, hired Bank of America Merrill Lynch (BAC) last year to find a bidder. If the deal goes through, Metropoulos, 61, will get a stable of 25 brands which together have less than 2 percent of the U.S. market.