Tuesday, February 11, 2003

Business Digest

Enquirer news services

Union pact may affect deal with AK Steel

PITTSBURGH - U.S. Steel and the United Steelworkers of America agreed Monday to begin negotiations on a labor deal covering union workers at National Steel, a bankrupt company that is the target of a bidding war.

An agreement covering National's 8,200 workers and the 12,000 union employees of U.S. Steel could give the nation's largest steel maker a leg up in a contest with AK Steel Corp. to take over National.

Last week, a federal bankruptcy judge in Chicago named AK Steel of Middletown, Ohio, the lead bidder for National, a designation which could give it an edge in a bidding war.

But National also would retain the right to reject an AK Steel offer if a deal cannot be reached with the union by March rocky relationship with the Steelworkers.

Mail Boxes Etc. become UPS Stores

ATLANTA - United Parcel Service announced Monday that 3,330 Mail Boxes Etc. franchises across the country will be renamed The UPS Store.

Atlanta-based UPS, which acquired Mail Boxes Etc. in 2001, said the change will let franchises lower prices for UPS air express, ground and international shipping service.

UPS said tests showed that the change increased overall UPS shipping volume by 70 percent over the previous year.

J&J buys biotech that makes heart drug

TRENTON, N.J. - Health-care giant Johnson & Johnson is boosting its biotech might with the acquisition of Scios Inc. in a $2.4 billion cash-for-stock deal announced Monday.

Buying Scios, a 22-year-old biotech company with one product on the market, gives J&J a new, likely lucrative heart drug and a possible future blockbuster, while Sunnyvale, Calif.-based Scios should get sales and research support that will help it grow quickly, analysts say.

The deal is expected to close in this year's second quarter.

Rejected franchisees awarded $7.9M

CHARLOTTE - An arbitration panel awarded $7.9 million to two would-be California franchisees who sued Krispy Kreme Doughnuts Inc., the company said Monday.

Kevin Boylan and Bruce Newberg accused Krispy Kreme of breach of contract, intentional interference with contract and business relations and other claims after the company awarded development rights for northern California to another group, Golden Gate Doughnuts LLC, according to SEC filings.

That group is 67 percent owned by Krispy Kreme.

T-bill auction rates lower this week

WASHINGTON - Interest rates on short-term Treasury securities fell in Monday's auction.

The Treasury Department sold $18 billion in three-month bills at a discount rate of 1.150 percent, down from 1.155 percent last week. An additional $16 billion was sold in six-month bills at a rate of 1.165 percent, down from 1.185 percent.

Both the three-month and the six-month rates were the lowest since Jan. 27 when the bills sold for 1.140 percent and 1.160 percent, respectively.

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