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Fred Hassan has his work cut out for him. On Apr. 20, the former Pharmacia chief executive was named CEO of Schering-Plough. The drugmaker has been beset by a series of problems, including slumping sales of its blockbuster allergy drug Claritin. The company is also grappling with investigations by the Justice Dept. into some of its marketing, manufacturing, and clinical-trial practices.
In addition to the legal challenges, Hassan will need to boost sales of existing products, including new cholesterol-lowering drug Zetia. That product, sold in partnership with Merck, has gotten off to a slow start.
A big question is whether Hassan, 57, will fix up Schering for a sale. After all, he took the helm of Pharmacia in 1997, engineered a turnaround, and sold it to Pfizer in a recent $60 billion deal. The most likely buyer for Schering, analysts say, is Merck, which may be interested if Zetia turns out to be a hit. Hassan says: "I don't have all the answers yet." But he adds: "My strategy is to build [the company] and not work toward selling." Then-President George H.W. Bush reappointed Alan Greenspan as Federal Reserve chairman in 1991, but he came to regret it after the central banker failed to engineer the strong economic recovery the elder Bush needed to win a second term. Now his son is following in his footsteps, but the younger Bush is betting things will turn out differently this time. At a press conference with economics reporters on Apr. 22, President George W. Bush let it slip that he plans to nominate Greenspan next year for another term as Fed chairman. By giving Greenspan, 77, that vote of confidence, Bush hopes to bolster still-shaky financial markets in the wake of the Iraq war. It also does not hurt that the monetary maestro is almost as popular as the President in opinion polls. In a statement, Greenspan said: "If President Bush nominates me and the Senate confirms his choice, I would have every intention of serving." As if probes by the Justice Dept. and the Securities & Exchange Commission were not enough to worry about, HealthSouth has become the target of a congressional investigation. On Apr. 22, the House Energy & Commerce Committee said it was launching a wide-ranging inquiry into the Birmingham (Ala.) company's accounting practices. The feds have accused HealthSouth of inflating profits by at least $1.4 billion since 1999. The congressional panel has requested a slew of documents from HealthSouth and its former outside auditor, Ernst & Young, to help it determine why the auditors failed to uncover accounting fraud that went on for years. Frank Quattrone, Credit Suisse First Boston's former banking star, was charged on Apr. 23 with obstruction of justice and witness tampering by the U.S. Attorney in the Southern District of New York. The charges relate to an e-mail message that the former head of CSFB's tech banking group sent to colleagues in late 2000, urging them to clean up their files. At the time, CSFB was being investigated by securities regulators and federal prosecutors who were examining the way the bank dealt with initial public offerings. Quattrone surrendered to FBI agents and was released on his own recognizance. His lawyer, John Keker, said Quattrone was innocent, and he accused the prosecutors of "seeing the world through dirty windows." Merck has thrown in the towel on an initial public offering of its Medco Health Solutions unit. On Apr. 22, the drugmaker announced it planned to do a tax-free spin-off of the pharmacy benefits manager later this year. Last year, the company tried and failed to do a partial IPO of Medco, to be followed by a spin-off of Merck's remaining stake. Merck blamed its inability to complete the deal on a weak market for public offerings. But analysts and investors said the lack of enthusiasm also stems from concerns about Medco's business prospects. U.S. Steel has reclaimed its title as the nation's largest steelmaker, trumping rival AK Steel to buy bankrupt National Steel for $1.05 billion, including debt. U.S. Steel's ace in the hole: It reached a cost-cutting pact with the United Steelworkers union -- something AK was unable to do. With the deal, U.S. Steel leapfrogs International Steel Group, which earlier this year agreed to buy Bethlehem Steel, to become the No. 1 producer. U.S. Steel's acquisition, approved by a bankruptcy court judge on Apr. 21, follows its recent takeover of a bankrupt Serbian steel outfit. -- Raytheon President William Swanson will succeed Daniel Burnham as CEO on July 1.
-- Viacom is buying Time Warner's 50% stake in Comedy Central for $1.2 billion.
-- Honda named Takeo Fukui CEO and president, replacing Hiroyuki Yoshino. Is AT&T getting its voice back? The telco ended a string of disappointing results on Apr. 23 when it reported a higher-than- expected first-quarter profit. Long-distance sales are eroding less than expected, and investors sent AT&T's stock price soaring 23%, to $17.01.