Business this week: 8th - 14th October 2005

From The Economist print edition

Bridgestone Firestone ended a long-running dispute with Ford by agreeing to pay $240m to settle claims stemming from a huge safety recall of its tyres in 2000.

Inco, a Canadian mining company, said it was buying Falconbridge, a domestic rival, in a deal worth around C$12 billion ($10.2 billion) that creates the world's biggest producer of nickel. Xstrata, based in Switzerland, had expressed keen interest in Falconbridge, taking a 20% stake in August.

Carl Icahn sent an open letter to shareholders in Time Warner attacking the “dismal record” of management. The billionaire investor heads a consortium with a 2.8% stake in the media conglomerate that wants the group to spin off its cable-TV unit and buy back billions in shares. See article

Rupert Murdoch said that his decision in August to prolong a poison pill in News Corporation (designed primarily to stop John Malone's Liberty Media from increasing its voting stake in the group) was “totally legal”. Last week, a group of investment and pension funds filed a lawsuit in Delaware to block the extension, arguing shareholders should have been consulted first.


It was a busy week for Microsoft. The software giant reached a $761m settlement with RealNetworks, ending the last major antitrust lawsuit brought against it in America. The two companies also agreed to collaborate to tackle growing competition from firms offering media downloads over the internet. Microsoft then announced an alliance with Yahoo! that enables interaction between their instant-messaging services, a direct challenge to AOL. Techies were also excited by reports that both Microsoft and Google (in alliance with Comcast, a cable-TV operator) were jostling to buy a stake in AOL.


India's two biggest providers of software services, Infosys Technologies and Tata Consultancy Services, reported a rise in net profit for the quarter ending September 30th of 36% and 20.5% respectively, compared with a year earlier. Both firms benefited from inclusion in a big contract to manage ABN Amro's IT systems.



Refco, a large futures and commodities broker based in New York, replaced its boss, Phillip Bennett, for allegedly using a separate company to “hide” $430m. Mr Bennett (who repaid the sum to the firm) was subsequently charged with fraud by federal prosecutors. Refco's share price collapsed as it revealed that financial statements going back to 2002 were unreliable.

Antonio Fazio defended his conduct in the takeover battle for Banca Antonveneta. The governor of Italy's central bank was questioned by prosecutors investigating whether he had abused his powers by apparently favouring a domestic offer (ABN Amro, a Dutch bank, eventually won the bid). No charges have been brought against Mr Fazio.

Lincoln National, an insurance company based in Philadelphia, announced a $7.5 billion merger with Jefferson-Pilot, a rival from North Carolina. The deal creates America's fourth-biggest life insurer.

At a meeting of trade ministers in Zurich, Rob Portman, the United States' trade negotiator, said he was prepared to offer major concessions to reduce farm subsidies. The EU responded with somewhat less ambitious proposals.


China's trade surplus in September fell to $7.6 billion from $10.6 billion in August. For the 12 months ending September, the surplus was $96.4 billion. Imports to China grew sharply for the second month, a sign that domestic demand may be picking up. China released the figures just before John Snow, America's treasury secretary, arrived to seek further flexibility on its currency policy.