A new media merger and cyber spying charges top our roundup of the day's top business news stories.
AT&T to buy DirecTV
AT&T has agreed to buy DirecTV for $49 billion, a deal which could make it a major player in pay television and increase its influence with media companies, according to the Wall Street Journal. This agreement comes just 3 months after Comcast’s $45 billion agreement to buy Time Warner Cable. Because growth is slowing in the pay TV and wireless subscription markets but growing in the streaming video market, the biggest companies in the television and telecommunications markets are seeking ways to change the dynamics of what they do and to achieve bigger scale. The combination of AT&T and DirecTV will create a company with 26 million pay-TV subscribers in the US, second only to Comcast and Time Warner Cable, which will have 30 million combined subscribers, if approved by regulators. AT&T will pay $95 per share for DirecTV. Shareholders will receive $66.50 in the form of AT&T shares and $28.50 in cash.
US charges Chinese workers with cyber spying
The Department of Justice announced it will file charges against several individuals in China’s People’s Liberation Army, accusing them of stealing trade secrets from American companies. The New York Times reports that this is the first time the US has charged government employees with economic espionage. The names of the companies that were hacked will be announced later today. In a separate case, the DOJ will announce charges against several people who used hacking software called Blackshades. The software allows hackers to remotely control a computer. The announcement about the Chinese is likely to increase tensions between the Americans and Chinese.
AstraZeneca rejects new offer from Pfizer
The board of AstraZeneca has rejected the increased takeover bid of $119 billion from US drugmaker Pfizer, according to the Associated Press. Pfizer has been attempting to takeover AstraZeneca since January and investors believe that this last rejection probably will bring the saga to an end. AstraZeneca has consistently maintained that it can deliver on its prospects independently. AstraZeneca’s share price dropped 14.7 percent in early trading. Pfizer has until 5 pm local time May 26 to make a formal bid to shareholders. If it doesn’t, it cannot make another offer for 6 months.
Malaysia Airlines shares plunge
Malaysia Airlines shares plunged 18 percent due to fears that the government may not be prepared to bail out the state-owned carrier and could be contemplating a restructuring. The Financial Times reports that last week Malaysia Airlines reported a 58 percent widening in net losses in the three months to March 31. Bookings from China, one of the airline’s most important destinations and sources of business, fell by 60 percent. On Friday, the chairman of the country’s public accounts committee, part of Malaysia’s parliament, said the government should not step in to bail out the carrier at this time.
Campbell’s Soup shares drop
Shares of Campbell’s Soup were down more than 5 percent in pre-market trading, according to USA Today. The drop was caused by a negative assessment from CEO Denise Morrison. The company earned $184 million, or 58 cents per share. Last year it earned $181 million, or 57 cents per share. The CEO indicated that she was not happy with sales results in the US Soup market. A year ago, sales in that unit had increased 14 percent. Revenue rose 1 percent in the first quarter to $1.97 billion. The Street had forecast $2 billion.
Cities where people walk to work
Only 2.9 percent of Americans walk to work, according to the US Census Bureau. A new report in USA Today lists the cities in which individuals are most likely to walk to work. 1. Boston, where 15.1 percent walk to work. 2. Washington, DC, where 12.1 percent walk to work. 3. Pittsburgh, PA, where 11.3 percent walk to work. 4. New York City, NY, with 10.3 percent walking to work. 5. San Francisco, CA indicates that 9.9 percent walk to work. 6. Madison, WI with 9.1 percent walking to work. 7. Seattle, WA, ties with Madison at 9.1 percent. 8. Honolulu, HA at 9.0 percent. 9. Philadelphia, PA at 8.6 percent who walk to work, and finally, 10. Jersey City, NJ at 8.5 percent.