HSBC set to fire 25,000 employees, Campbell's is buying Garden Fresh, and horse racing gamblers are keeping their winning Belmont Stakes tickets. Here are the top stories for June 9, 2015.
HSBC Cutting Thousands of Staffers
Between 25,000 and 50,000 staffers will be cut by HSBC as it trims $5 billion from its operating budget, according to details given to investors Tuesday in a company-wide update. The bank said it would shrink its risk-weighted assets by about $290 billion, including cutting its global banking and markets risk-weighted assets to less than one third of the group’s assets. HSBC, which is Europe’s largest bank, also said it would streamline its 260,000 strong workforce and trim its branch numbers by around 12 percent. The bank said it will sell its operations in Turkey and Brazil.
General Electric Selling Finance Business
General Electric is selling its U.S. Sponsor Finance business in a deal valued at about $12 billion, as the company refocuses on its core businesses and leaves the banking sector. The Sponsor Finance arm, which includes Antares Capital, will be sold to the Canada Pension Plan Investment Board, alongside a $3 billion bank loan portfolio. GE is in the process of selling most of the assets of GE Capital over the next year and a half, but will keep the financing components that deal with industrial business. The selloff of the Sponsor Finance will be completed in the 2015’s third quarter.
Gamblers Prefer Mementos to Money
History was made at the Belmont Stakes last weekend as American Pharaoh became the first horse in almost 40 years to win the Triple Crown of Horse Racing. Because of the historic nature of the win, many gamblers on the race have decided to keep their winning ticket rather than cash it in. ESPN reports that gamblers holding $2 tickets on American Pharaoh have opted not to cash in, leaving behind $315,829 in total. Each $2 ticket was work $3.50 to the winner. According to a Belmont Stakes spokesman, there were 94,000 $2 tickets sold on American Pharaoh to win, and only 4,000 of those tickets were actually cashed. Many of the actual tickets are being sold on eBay for much more than the $3.50. Winners have until next March 31 to cash the tickets.
Campbell’s To Buy Garden Fresh
In attempting to make more of a splash in the fresh-food aisle of your local grocer, Campbell Soup Co. is planning to acquire Garden Fresh Gourmet Inc. in a deal worth about $231 million. Garden Fresh is a company based in Michigan with about $100 million in annual sales of salsa and hummus. Campbell’s has been dealing with stagnant sales of its core products such as soups and V8 juices. The deal could be completed in the next two weeks.
Small Businesses Have Bigger Eyes
The National Federation of Independent Business announced Tuesday that its Small Business Optimism Index rose 1.4 points to 98.3, the highest reading since December. The survey gets information from more than 600 companies. The confidence report follows positive reports on employment and automobile sales in May, suggesting the economy is gaining momentum. In the Small Business report, eight of the index’s 10 components rose in May.
Greece Plan Insufficient
Three officials of the European Union said Tuesday the new reform proposal that Greece submitted to the institutions that represent its creditors was insufficient for a new deal. Greece is trying to find new funding to implement its austerity plan, but the EU claims the details of its plan don’t support additional funding. The Chief spokesman for the European Commission, Margaritis Schinas, said EU officials do not speak for the Commission as a w hole, and said the proposal is still under consideration. One EU official who asked not to be identified said the Greek proposal did not contain any solution to issues over pension reform, and its debt restructuring proposal was also unacceptable.