Sallie Mae splits, Chinese company purchases Smithfield Foods, and the Swiss government cooperating to catch U.S. tax evaders. Read more about these and other of the day's business news stories.
Sallie Mae Plans to Split in Two
Student loan giant Sallie Mae plans to divide into two separate, publicly traded companies, one for education loan management and the other for consumer banking, the Associated Press reports. The split could be completed within 12 months of board approval. John Remondi will serve as CEO of the education loan company, which will manage Sallie Mae’s nearly $150 billion portfolio of federally guaranteed and private student loans and the servicing and collection of these loans.The consumer banking side will include the Sallie Mae Upromise Rewards program and roughly $9.9 billion in private education loans, servicing platforms and other cash investments, according to the AP.
Chinese Company to Purchase Pork Giant Smithfield Foods
Chinese meat producer Shuanghui International is buying Smithfield Foods, the world's largest pork processor, in a deal valued at around $5 billion, CNN reports Shuanghui will acquire all outstanding shares of Smithfield, maker of such popular packaged meats brands such as Eckrich and John Morrell, for $34.00 a share in cash. Once the deal is approved and completed, Smithfield will cease to be publicly traded company. Smithfield employs 46,000 workers globally and will become a wholly-owned independent subsidiary of Shuanghui International. The deal, which is subject to regulatory and shareholder approval, is expected to close in the second half of 2013.
United States Driving Global Economic Growth: OCED
The Organization for Economic Cooperation and Development’s latest Economic Outlook forecasts that the world economy will grow 3.1 percent this year and 4 percent in 2014. This estimate is slightly more pessimistic than the Paris-based think tank’s November outlook that forecast global growth in 2013 at 3.4 percent and 4.2 percent next year, the BBC reports. The recession-plagued euro-zone is tamping down “a generally improving” United States and Japan, the report said. The United States is projected to expand 1.9 percent this year and then accelerating to 2.8 percent in 2014, which would be the country's best rate since 2005. Conversely, the euro zone is estimated to remain in recession for a second year. The OECD sees its economy contracting 0.6 percent in 2013 and then returning to growth next year with a rate of 1.1 percent.
Swiss Government Allows Cooperation to Catch U.S. Tax Evaders
The Swiss government announced Wednesday that it will let its banks circumvent the country's strict client secrecy laws as part of an effort to end a long-running tax evasion dispute with the United States, The Associated Press reports. The banks will decide for themselves if they want to negotiate with U.S. authorities to settle legal disputes over suspected American tax evaders, Finance Minister Eveline Widmer-Schlumpf announced at a news conference. The aim, she said, is to "restore stability" to the Swiss banking industry.
Facebook To Update Hate Speech Guidelines
Following complaints from women’s group and a retreat by advertisers, Facebook said it will update guidelines used to evaluate hate speech, Reuters reports. Facebook acknowledged that current systems to remove hate speech have not worked well in a blog posted late Tuesday by the company’s safety team. The action follows an open letter to Facebook released last week by a group called Women, Action & the Media asking the social media company to improve its response to content trivializing violence against women. The group also urged Facebook users to notify advertisers whose ads appear next to the content.
Regulators Approve Softbank Acquisition of Spring Nextel Corp.
Finding no unresolved security issues, the Committee on Foreign Investment has approved the acquisition of Sprint Nextel Corp. by Softbank of Japan, Bloomberg News reports. The transaction involves the sale of 55 percent in Sprint shares priced at $7.30 each, with the remaining shares converted into shares of a new publicly traded company to be called New Sprint. Sprint will become a wholly-owned subsidiary of New Sprint. Upon approval from the Federal Communications Commission and Sprint stockholders, the transaction is expected to close on July 1, 2013.