Major Corporate Deals and Bankruptcy Filings Dominate Business Landscape

Strategic Insights -

In a series of significant deals and financial struggles, General Electric Co. agreed to buy Arden Realty Inc. for $3.2 billion, while Barrick Gold Corp. acquired Placer Dome Inc. for $10.4 billion. Meanwhile, Northwest Airlines Corp. filed for bankruptcy protection and estimates it won't generate significant profits until 2009 or 2010. Additionally, Ford Motor Co. reached an agreement with the United Auto Workers to increase health care costs and Delta Air Lines Inc. requested a six-month extension to file its reorganization plan.

Key Takeaways:

  • General Electric Co. is acquiring Arden Realty Inc. for $3.2 billion, marking one of its largest U.S. real estate deals, with GE's real estate group having $48 billion in assets and $1 billion in profits last year.
  • Barrick Gold Corp. acquired Placer Dome Inc. for $10.4 billion, with the deal prompting Goldcorp Inc. to buy certain mining assets from Barrick for $1.49 billion.
  • Northwest Airlines Corp. has lost almost $4 billion since 2001 and may not generate significant profits until 2009 or 2010, despite needing billions to upgrade its planes.
  • Ford Motor Co. hourly workers approved an agreement to pay more for their health care, which will save the company $850 million annually and reduce its long-term retiree health care liability by $5 billion.
  • Delta Air Lines Inc. requested a six-month extension to file its reorganization plan, citing the time needed to further cut costs.
  • The European Commission cleared Oracle Corp.'s acquisition of Siebel Systems Inc. for $5.85 billion, with the commission concluding that the deal would not significantly impede effective competition.

Statistics:

  • General Electric Co. is acquiring Arden Realty Inc. for approximately $48 billion in assets and will pay $3.2 billion in cash for the deal.
  • Barrick Gold Corp. acquired Placer Dome Inc. for $10.4 billion, with the deal prompting Goldcorp Inc. to buy certain mining assets from Barrick for $1.49 billion.
  • Northwest Airlines Corp. has lost almost $4 billion since 2001 and estimates it won't generate significant profits until 2009 or 2010.
  • Ford Motor Co. expects to save $850 million annually under the new health care agreement and will shave $5 billion off its long-term retiree health care liability.
  • The European Commission cleared Oracle Corp.'s acquisition of Siebel Systems Inc. for $5.85 billion, concluding that the deal would not significantly impede effective competition.

Sources:

  • "General Electric to buy Arden Realty for $3.2 billion" - Reuters
  • "Barrick pays $10.4B for Placer Dome" - Reuters
  • "Northwest: Banker says airline won't make 'significant' money until 2009" - Reuters
  • "Ford workers agree to health care deal" - Reuters
  • "Delta wants 6 more months to file plan" - Reuters
  • "European body clears Oracle purchase" - Reuters
  • "The Commission concluded that the transaction would not significantly impede effective competition" - European Commission