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United States. Federal Reserve Board

Corporate News Roundup: Mergers, Rates, and Regulatory Actions

Strategic Insights

— 2 min read

Kerr-McGee, a U.S. oil and gas producer, has agreed to sell its British North Sea oil and gas interests to A.P. Moeller-Maersk and Centrica for $3.5 billion. The company has been undergoing significant changes under pressure from shareholders, including billionaire financier Carl Icahn, who dropped a bid for a board seat after the company repurchased shares and sold its chemical business. Economists expect the Federal Reserve to raise short-term interest rates by a quarter-point, to 3.5%, which would boost commercial banks' prime lending rate to 6.5%, the highest since August 2001. The Securities and Exchange Commission has charged two former Citigroup executives with fraud related to the company's mutual funds, and the National Association of Securities Dealers has issued new guidelines on the sale of equity-indexed annuities.

Key Takeaways:

  • Kerr-McGee has agreed to sell its British North Sea oil and gas interests to A.P. Moeller-Maersk and Centrica for $3.5 billion, under pressure from shareholders led by billionaire financier Carl Icahn.
  • The Federal Reserve is expected to raise short-term interest rates by a quarter-point to 3.5%, the 10th increase since June 2004, which would boost the prime lending rate to 6.5%, the highest since August 2001.
  • The Securities and Exchange Commission has charged two former Citigroup executives, Thomas Jones and Lewis Daidone, with fraud related to Citi's mutual funds, which led to a $208 million settlement in May.
  • The National Association of Securities Dealers has issued new guidelines on the sale of equity-indexed annuities, requiring brokerages to maintain a list of acceptable products and obtain written permission for others.
  • McDonald's reportedly posted a 4.9% increase in July sales, driven by new products in France and Germany, and expects robust sales growth in August.
  • The IRS has added the 2006 Toyota Highlander gas-electric hybrid SUV to the list of low-emission vehicles eligible for an income tax deduction of up to $2,000 this year.
  • Anheuser-Busch has launched Tilt, a new raspberry-flavored malt beverage with caffeine, guarana, and ginseng, with an alcohol content of 4% to 6.6%.

Statistics:

  • $3.5 billion: The price of Kerr-McGee's British North Sea oil and gas interests sold to A.P. Moeller-Maersk and Centrica.
  • 3.5%: The expected short-term interest rate after the Federal Reserve's quarter-point increase.
  • 6.5%: The expected prime lending rate after the Federal Reserve's quarter-point increase.
  • 10: The number of interest rate increases since June 2004.
  • 2001: The last time the prime rate and funds rate were at 6.5%.
  • $208 million: The settlement amount in May for Citi's mutual fund fraud.
  • 4.9%: McDonald's reported increase in July sales.
  • 2.7%: The gain in McDonald's stock.
  • 2,000: The maximum income tax deduction for low-emission vehicles, including the 2006 Toyota Highlander.

Sources:

  • Bloomberg News
  • Associated Press
  • Securities and Exchange Commission complaint
  • National Association of Securities Dealers guidelines
  • McDonald's press release
  • Internal Revenue Service announcement
  • Anheuser-Busch press release

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