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Buffett The Beneficent


In the most financially magnanimous moment ever, Warren Buffett agreed to give away $37 billion to charity. On June 26 he signed documents in New York donating most of that money over some years to the world's biggest philanthropy, the Bill & Melinda Gates Foundation. The move could double the foundation's size, to $60 billion. That would dwarf the next-largest charity, the Ford Foundation, with a paltry $11 billion in assets.

Buffett, 75, had expected his fortune to be distributed by his wife, Susan, after his death. But she died in 2004. The Gates Foundation will use the windfall to boost its spending on global health and U.S. high school education. Bill Gates, 50, professed to be excited but nervous.

See "Warren Buffett's Mega-Gift"

Union auto workers see the writing on the wall, and it says: "Take a buyout now or be left hanging later." GM (GM) said on June 26 that 35,000 of its workers -- 5,000 more than it hoped for -- accepted checks ranging from $35,000 to $140,000 to retire early. Some 12,600 employees at its bankrupt former parts unit, Delphi, did the same. The cuts will drop GM's hourly payroll in North America to about 75,000 workers and help ax $5 billion in costs this year.

See "Wagoner's Big Wins at GM"

It looks as if steel baron Lakshmi Mittal is going to get what he wants, but he's not getting it cheap. Following a five-month takeover tussle, Luxembourg's Arcelor agreed to merge with Mittal Steel on June 25 after Mittal upped his offer yet again. The $33.8 billion price tag is 82% more than Arcelor's market value before Mittal fired the first shot in January. Meanwhile, over in the New World, Phoenix copper giant Phelps Dodge (PD) on June 26 tried to wrest Canadian mining outfits Inco (N) and Falconbridge (FL) from other contenders for around $35 billion. That fracas may be far from over.

See "What Price Mittal's Victory?"

The titan of Band-Aids and baby powder is extending its grip on drugstore shelves. Johnson & Johnson (JNJ) said on June 26 that it will buy Pfizer's (PFE) consumer health-care business for a pricey $16.6 billion. The deal gives J&J such powerhouse brands as Listerine, Visine, and Zantac. Some analysts worry the purchase will distract J&J, which is trying to heal its medical device business, but it's a winner for Pfizer, which plans to focus on higher-margin prescription drugs.

Fretting about rising rates that could slow growth -- and demand for oil and gas along with it -- investors have driven down oil-patch stocks in recent weeks, some by 20% or more. Not to worry: Anadarko Petroleum (APC) CEO Jim Hackett on June 23 said he plans to fork over $21 billion, a rich 40% premium, to buy up two other energy players, Kerr-McGee (KMG) and Western Gas Resources (WGR). The deals will make Anadarko the biggest U.S. independent.

It was less auction than gong show. After a tumultuous process that saw three private- equity groups bail, Hispanic broadcaster Univision said it will sell itself for $13.7 billion in cash and assumed debt to a group including billionaire Haim Saban. With two TV networks, Univision dominates a fast-growing Hispanic market. Jilted bidder Grupo Televisa, which owns 11% of Univision, says it is considering "a number of alternatives." One of them, analysts say, might be another bid.

See "Televisa and Univision: Stay Tuned!"

It's a homecoming at Kraft (KFT) for Irene Rosenfeld, named CEO of the nation's top foodmaker on June 26. Her predecessor, Roger Deromedi, was ousted. The 53-year-old Rosenfeld, who has headed PepsiCo (PEP) snack division Frito-Lay since fall 2004, spent more than 20 years at Kraft before departing three years ago. Today, Kraft faces cooling sales and boiling competition. It'll be up to Rosenfeld, known for her marketing chops, to restock the cupboard with innovative creations.

See "At Kraft, a Fresh Big Cheese"

Oil behemoth BP (BP) got some grease stains on its carefully cultivated image on June 28, when the Commodity Futures Trading Commission filed a civil complaint in Chicago alleging that BP traders illegally cornered part of the propane market in early 2004, forcing prices up briefly and affecting 7 million households. The Justice Dept. also filed criminal charges in Washington against a former trader. A BP spokesman says: "Market manipulation did not occur. We are prepared to make and prove that case in the courts." He adds that BP has already taken action, "including dismissal of several employees."

Is there trouble in hedge fund land? On June 23, The New York Times reported that the SEC is looking into whether Pequot Capital Management has traded on inside information. The SEC won't comment, and Pequot says its trading has been entirely proper. On the same day, in an unrelated case, a federal appeals court tossed out a controversial rule that would require hedge fund advisers to register with the SEC. The agency says it's studying its options.

The late Get Smart actor Don Adams would have made a great spokesman for DaimlerChrysler's (DCX) Smart car, which the company says will arrive in the U.S. in early 2008. Smart, best known for its eight-foot-long microcar, the two-seater Fortwo, has lost about $5 billion since its launch in 1998, but CEO Dieter Zetsche says it will at least break even next year. United Auto Group (UAG), run by NASCAR legend Roger Penske, will distribute the car, mostly in cities. Marketing will focus on Smart as a design icon and the notion that it's safe to drive on America's SUV-filled roads.

See "DaimlerChrysler's Smart Move"

After this one, employers may shift their irritation from troublesome employees to troublesome judges. On June 27 the Supreme Court made it easier for workers to make claims involving retaliation. The case involved a female forklift operator, Sheila White, who filed a sexual harassment complaint and then was reassigned to a job with the same pay but harder physical labor. After she petitioned the Equal Employment Opportunity Commission, she was suspended for insubordination. Later she was reinstated with back pay, but that didn't soothe the unanimous Supremes. Writing the opinion in Burlington Northern and Santa Fe Railway (BNI) v. White, Justice Stephen Breyer said the company's actions were enough to dissuade a "reasonable worker" from making a claim. Previously, case law had defined retaliation as largely meaning the loss of a job. Business can still take heart, however. The U.S. Chamber of Commerce has claimed victory in 10 of the 13 other high court cases it weighed in on this year.


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