For WellPoint (WLP) CEO Larry Glasscock, banking and health care are a lot alike: service businesses where technology and size matter. Money counts, too. The banker-turned-health-care executive proved that anew on Sept. 27 with a $6.5 billion deal for WellChoice (WC), the New York Blue Cross Blue Shield company. The deal cements WellPoint's position as the nation's largest health insurer, with 33 million customers in 14 states.
Glasscock, 57, spent 20 years at a Cleveland bank before jumping to lead a Blue Cross Blue Shield unit in Washington, D.C., in 1993. He has since earned his stripes as a dealmaker in the rapidly consolidating industry. His $16.4 billion purchase last fall of California-based WellPoint, whose name his Indianapolis company took, went smoothly, even as California regulators denounced executive payouts and won concessions. Then came a seamless $185 million purchase of Luminos, a Virginia health insurer. With further consolidation likely in health care, look for more deals ahead.
Anyone got a billion for the movies? That's the price that DreamWorks wanted to sell its studio to General Electric's (GE) NBC Universal unit. Two months of talks broke down between GE and the live-action-movie arm of DreamWorks, started in 1996 by Hollywood moguls David Geffen, Steven Spielberg, and Jeffrey Katzenberg. (The publicly traded DreamWorks Animation (DWA) wasn't included in the talks.) DreamWorks, whose 60-odd-title film library includes Oscar winner American Beauty, had a rocky summer with films like The Island. But talks still could resurface with Universal, which distributes DreamWorks films overseas.
Eastman Kodak (EK) has long warned that its transition from film to digital would be rocky. It hit another bump on Sept. 28, when the company said this year's digital operating profits would fail to meet its target of $275 million to $325 million. One reason: Because of concern the economy may be slowing, Kodak will build fewer digital cameras in the fourth quarter, the most important for camera sales. Even so, CEO Antonio Perez was upbeat about Kodak's long-term prospects during a speech to investors on Sept. 28. By 2008, he predicted, Kodak would be such a fast-growing and profitable digital company that film would be little more than "gravy."
An 11th-hour deal averted a strike by 17,000 members of the Canadian Auto Workers against General Motors (GM). The two sides agreed on a contract three minutes before midnight on Sept. 27. The pact allows GM to eliminate about 1,000 jobs, mostly by attrition. The contract mirrors deals the CAW reached earlier in September with Ford Motor (F) and DaimlerChrysler (DCX) on the size of job cuts and the 3.5% wage increase. The pact came despite GM's earlier assertion that big North American losses meant it wouldn't accept the same pattern as Ford and Chrysler. The carmaker will cut as many as 300 jobs at its Oshawa (Ont.) truck plant, where productivity has increased. GM still faces tough talks this fall with the United Auto Workers about reducing health-care costs, although the current U.S. labor contract lasts two more years.
With competition heating up in the wireless e-mail space, the pressure is on Research in Motion (RIMM) and its pioneering BlackBerry mobile gizmo. In a significant blow to RIM, Palm (PALM), the maker of the Treo device, is teaming up with onetime rival Microsoft (MSFT). The next version of the Treo will use Microsoft's operating system, helping the software giant in its push into the market for mobile data devices. In a twist, RIM announced it would use chips from traditional Microsoft partner Intel (INTC) to boost its data transmission speed. RIM also reported a 57% jump in its second-quarter profit, but new subscriptions missed some analysts' estimates.
-- Tribune (TRB) Co. will appeal a federal tax ruling against it for $1 billion.
-- Russia's Gazprom is buying oil company Sibneft for $13.1 billion.
-- ATA Airlines pilots ratified a labor deal worth $84.5 million in savings.
Boeing's (BA) stock got a nice lift after the planemaker announced a tentative deal on Sept. 25 to end a 26-day strike with its 18,400 commercial airplane workers. Shares of Boeing closed at $67.21 on Sept. 28, up more than 6% since the strike was settled.