Executive Business Briefing

Dec. 30, 2002 at 8:59 AM
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Here is a look at Monday's top business stories:

Hormel buys unit of Imperial Sugar

AUSTIN, Minn., Dec. 30 (UPI) -- Hormel Foods Corp. said it has acquired the Diamond Crystal Brands unit of Imperial Sugar Co. in a deal valued at $115 million.

Diamond Crystal Brands packages and sells various sugar, sugar substitute, salt and pepper products, savory products, drink mixes and dessert mixes to retail and foodservice customers.

Hormel said the deal has received regulatory approvals.

Joel W. Johnson, chairman, president and chief executive officer, said, "Diamond Crystal Brands had revenues of $160 million in the last fiscal year, and we expect it to be immediately accretive for Hormel Foods."

Diamond Crystal Brands is based in Savannah, Ga., employs approximately 600 people and operates four packaging facilities.

Sunrise Assisted Living buys Marriott Senior Living

MCLEAN, Va., Dec. 30 (UPI) -- Sunrise Assisted Living Inc. said it has signed a definitive agreement with Marriott International Inc. to acquire all of the outstanding stock of Marriott's wholly owned subsidiary, Marriott Senior Living Services Inc.

Marriott Senior Living owns and operates senior independent full-service and assisted living communities.

Under terms of the deal, Sunrise will pay approximately $89 million in cash, subject to various adjustments, to acquire all of the outstanding stock of Marriott Senior Living. Sunrise will also assume approximately $38 million of working capital liabilities and other funding obligations as well as approximately $23 million of life care endowment obligations, the majority of which will be repaid with proceeds from the issuance of new endowment obligations as new residents enter the communities.

The stock purchase is expected to close late in the first quarter of 2003, subject to receipt of required regulatory approvals and other closing conditions.

Sunrise said it will use cash on hand, including proceeds from its recently completed sale/long-term manage back transactions, and capacity under its various credit facilities to fund the deal.

Paul Klaassen, chairman and chief executive officer of Sunrise, said, "Sunrise Assisted Living and Marriott Senior Living Services hold in common many shared values and a passion for service to seniors. Our new combined organization will remain committed to a resident-centered approach to service excellence across the entire spectrum of senior care -- from independent and assisted living through Alzheimer's and skilled nursing care."

The Marriott Senior Living portfolio includes 126 properties located in 29 states with a resident capacity of 23,157.

Stocks decline in Asia

TOKYO, Dec. 30 (UPI) -- Stock prices on the Tokyo Stock Exchange ended lower Monday in shortened trading session ahead of the long New Year holiday, pressured by weakness in high technology issues and Friday's declines on Wall Street.

Japan's blue-chip Nikkei Stock Average, which added 13.95 points Friday, fell 135.10 points, or 1.6 percent, to 8,578.95 -- its lowest year-end close since 1982. For the year the Nikkei lost 18.6 percent.

The broader Topix Index, which rose 6.29 points in the previous session, lost 5.96 points, or 0.7 percent, to 843.29.

Volume amounted to an estimated 231 million shares as declines outpaced advances, 835 to 453, while another 192 stocks settled unchanged.

Markets in Japan will be closed until Jan. 6 for the New Year holiday.

Analysts said the continued firmness of the yen on global foreign exchange markets also weighed on the market, triggering sell orders among some blue-chip exporters.

In the currency market, the dollar bought 119.94 yen. The U.S. currency has lost more than 8 percent against the yen since the start of this year.

The market's downside was, however, supported to some extent due to a lack of follow-through selling.

In trading, Honda Motor lost 0.9 percent, Nissan Motor fell 0.8 percent, Tokyo Electron, the world's second-largest maker of chip-production equipment, fell 3.4 percent, Sony Corp. fell 2 percent, Bridgestone dropped 4.3 percent and UFJ Holdings fell 2.4 percent.

Elsewhere in Asia, prices fell to their lowest level since October on the Hong Kong Stock Exchange. The blue-chip Hang Seng Index, which dropped 116.37 points during the previous session, dropped 172.93 points, or 1.8 percent to 9,272.33.

Analysts said the market fell as U.S. tension with North Korea and Iraq clouded the outlook for equities and a surging oil price sent airline shares tumbling.

In trading, Hong Kong's dominant carrier Cathay Pacific Airways lost 1.4 percent on the prospect of higher jet fuel costs after crude oil futures hit a two-year high on speculation the United States will attack Iraq within a few months.

Chinese carriers fared much worse with China Southern Airways falling 6.6 percent and China Eastern Airways dropping 5 percent.

Meanwhile, China Mobile fell 2.9 percent, China Unicom dropped 3.7 percent and developer Sino Land fell 3 percent.

Markets in Hong Kong will close at midday on Tuesday for the New Year holiday and reopen on Thursday.

Prices ended sharply lower on the South Korean Stock Exchange as tensions escalated over the nuclear dispute with North Korea. The Korean Composite Stock Price Index, or Kospi, which lost 14.97 points during the previous session, dropped 29.37 points, or 4.5 percent, to 627.55.

North Korea said Sunday it hopes to settle the dispute over its decision to reactivate operations at a nuclear complex "in a peaceful way," but vowed it would not cave into U.S. pressure, according to a report from CBS News.

U.S. officials said over the weekend that Washington would seek support from its Asia allies and the United Nations to increase economic pressure on North Korea unless it abandons nuclear development. Friday, North Korea ordered out U.N. inspectors monitoring its main nuclear complex and the government announced it would restart a radiochemical laboratory at the complex that could be used to extract weapons-grade plutonium.

Market sentiment also was hampered by a planned strike by unionized workers at the Korea Stock Exchange, raising concerns about a possible disruption in corporate public disclosure.

In trading, Samsung Electronics fell 4.5 percent and semiconductor parts maker Mirae lost 5.9 percent.

South Korea's stock market will be closed Tuesday and Wednesday.

Prices also ended lower on the Taiwan Stock Exchange. The Weighted Price Index, which slipped 20.05 points Friday, dropped 89.57 points, or 1.9 percent, to 4,457.75.

Elsewhere around the Pacific region, prices lower on the Australian Stock Exchange. The blue-chip All Ordinaries Index, which lost 7.40 points during the previous session, dropped 30.90 points, or 1 percent, to 2,960.50.

In trading, News Corp. fell 2.5 percent, National Australia Bank lost 1.6 percent, Commonwealth Bank fell 1.3 percent and Rio Tinto slipped 0.9 percent.

Topics: W. Johnson
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