Category Archives: Business

Carlyle Group pumps $500 million into Beats Electronics

Beats Electronics, based in Santa Monica, Calif., said equity investment giant Carlyle Group has purchased a minority share of the company for $500 million.

Beats, founded by music producer Jimmy Iovine and rapper Andre Young — known as Dr. Dre — is a rapidly expanding maker of high-end headphones costing between $200 and $400.

Terms of the deal with Carlyle Group were not disclosed, but the deal values Beats at more than $1 billion, The Wall Street Journal reported Saturday. When smartphone maker HTC invested in Beats two years ago, the company had a valuation of about $600 million, the Journal said.

Carlyle's investment was announced simultaneously with news that Beats had agreed to buy out HTC Corp.'s 24.84 percent of the company in a deal valued at $265 million.

“These transactions represent the evolution of the financial strength and significant growth prospects of Beats,” said Iovine, who also is chairman of Interscope Geffen A&M.

The Hollywood Reporter said the deal is expected to help Beats expand, especially overseas.

Carlyle Group, based in Washington, is the second-largest private equity firm in the world with $180 billion in assets under its management and is known to have friends in high places, the Journal said.

“Carlyle has a strong history of helping great brands expand globally, and we are thrilled to partner with Jimmy Iovine, Dr. Dre and their talented management and product teams,” said Sandra Horbach, the equity firm's managing director and head of consumer and retail.

Copyright 2013 by United Press International

FDA bans imports from drug facility in Mumbai

U.S. product safety regulators said they would ban drug imports from a Ranbaxy Laboratories Ltd. facility in Mumbai that failed a plant inspection.

The U.S. Food and Drug Administration said it found “significant” violations at the company's newest plant in northern India that makes generic drugs.

Among its findings, the FDA cited the company for a “failure to adequately investigate manufacturing problems.” The plant was inspected in September and December 2012, The Wall Street Journal reported Monday.

“We have so far not received any communication from the U.S. FDA,” a company spokesman said in an email.

The spokesman said the company was “seeking information,” from U.S. officials.

The announcement markets the third Ranbaxy plant to cross the line with the FDA and it has the potential to be a long-range problem. The FDA has yet to lift the bans on the other two facilities, which were put into effect in 2008.

In another incident, the company closed a plant in Gloversville, N.Y., that had received a warning letter from the FDA in 2009. Then, last November, the company recalled 480,000 bottles of genetic Lipitor after a routine inspection found evidence of glass fragments.

The company's current Lipitor production will not be affected by the new FDA order, as it is now made by the company in New Jersey, the Journal said.

Copyright 2013 by United Press International

Top executives to leave Saks

U.S. retail giant Saks Inc. said its top two executives, Stephen Sadove and Ronald Frasch, would leave the firm after Hudson Bay Co. closes on its acquisition.

Chairman and Chief Executive Officer Sadove has been CEO since 2006 and became chairman in 2007. He joined the executive team as vice chairman in 2002, The Wall Street Journal reported Monday.

Frasch, the luxury retailer's president and chief merchant, began as vice chairman in late 2004 and has been in his current positions since 2007, the Journal said.

Both were expected to stay after Hudson Bay closed on the company in a deal initially valued at $2.8 billion, the Journal said.

“Steve and Ron have been a great team over the last nine years. They are admired and respected throughout both the company and the retail industry.”Saks's lead director, Donald Hess, said in a statement Monday, “Steve and Ron have been a great team over the last nine years. They are admired and respected throughout both the company and the retail industry,” said Saks's lead director Donald Hess in a statement.

Copyright 2013 by United Press International

Suzuki to recall 193,963 vehicles

Suzuki Motor of America is recalling 193,963 vehicles due to an air bag issue, U.S. regulators said Monday.

The recall involved 2006-11 model year Grand Vitara and 2007-11 SX4 vehicles, the National Highway Traffic Safety Administration said.

The NHTSA said an OCS sensor mat installed in the front passenger seat may fail due to repeated flexing of the mat just from using the seat.

If the sensor fails the air bag could deploy whether there is an adult or a child in the seat. However, the air bag is not supposed to deploy with a child in the seat.

Suzuki said it would replace the front passenger seat cushion assembly. However, it will take time to secure sufficient supplies of replacement parts, the NHTSA said.

Suzuki will contact vehicle owners in October to notify them that the parts are available.

Consumers were advised to call 800-424-4236 for information.

Copyright 2013 by United Press International

Post Holdings to buy Dakota Growers Pasta Co.

Breakfast cereal company Post Holdings Inc. said Monday it would buy Dakota Growers Pasta Co. Inc. to expand into a $5 billion U.S. market.

“Dakota Growers is a leader in the approximately $5 billion North American pasta market, with leadership positions in the private label, retail, food service and ingredient channels,” Post said in a statement.

Post said the deal, which is expected to close in January, includes production facilities in Carrington, N.D., and New Hope, Minn.

The deal is structured as a $370 million cash deal. After the closing, Dakota Growers will be managed independently with an executive team lead by Ed Irion, the company's vice president and general manager.

The deal is expected to contribute $300 million in net sales and $42 to $46 million in earnings before interest, taxes, depreciation and amortization, Post said.

Copyright 2013 by United Press International

Industrial production rose in August

Industrial production rose 0.4 percent in August after posting no change in July, the U.S. Federal Reserve said Monday.

Manufacturing output in August rose by 0.7 percent. Production at mines rose 0.3 percent, posting a fifth consecutive monthly increase. Output at utility companies fell 1.5 percent, as utilities posted a fifth consecutive decline, the central bank said.

Total production in August was at 99.4 percent of its 2007 average and 2.7 percent above the level of August 2012, the Fed said.

The rate of capacity utilization among industrial firms — the percentage of production compared to companies going at full steam — edged 0.2 percentage points higher to 77.8 percent in August.

That rate is 2.4 percentage points below its historic average, using data from 1972 through 2012.

Copyright 2013 by United Press International

Labor cost inflation in Europe slowed in second quarter

The annual rise of labor costs slowed to 0.9 percent in both the 17-member eurozone and the 28-member European Union in the second quarter, Eurostat said.

Wages and salaries in the 17-member eurozone rose by 1.1 percent, while non-wage labor costs rose 0.1 percent in the second quarter compared to the second quarter of 2012, Eurostat said.

In the 28-member EU, wages and salaries rose 1 percent, while non-wage labor costs rose by 0.3 percent in the second quarter compared to the same quarter of 2012.

The highest gain was in Estonia, where wages rose 7.8 percent from the second quarter of 2012 and non-wage costs for labor rose 7 percent for a combined rise of 7.7 percent.

In Lithuania, the total labor costs in the second quarter rose 6.5 percent compared to the second quarter of 2012. In Romania, the gain for wage and non-wage labor costs totaled 6 percent.

In Slovenia, Cyprus, Croatia and Spain, labor costs went down compared to April through June of 2012, dropping 5.9 percent in Slovenia, 4.6 percent in Cyprus, 0.6 percent in Croatia and 0.3 percent in Spain, Eurostat said.

Copyright 2013 by United Press International

New York manufacturing shows modest gains

Manufacturing activity rose modestly in the Empire State in September for the fourth consecutive month, the Federal Reserve Bank of New York said Monday.

The general business index, remained positive, although it dropped two points from 8.3 to 6.3, indicating growth at a slower pace.

The index for new orders rose two points to 2.4, while the shipments index jumped nearly 15 points to 16.4.

A point is calculated by finding the net number of businesses that report an increase or a decrease in each category.

The Fed said the price paid index came in at 21.5, little changed from August, but the prices received index climbed five points to 8.6.

Component indexes for employment slowed. The index measuring the number of employees shrank three points to 7.5, indicating slower growth. The index measuring the number of hours worked came to an almost neutral 1.1, indicating slight growth.

Copyright 2013 by United Press International

Inflation rates fell in Europe in August

The annual inflation rate in the 17-member eurozone dropped sharply from July to August, Euostat said Monday.

The official statistics office for the European Commission said the inflation rate for the 17-member currency region dropped from 1.6 percent to 1.3 percent July to August. In the larger, 28-member European Union, the annual inflation rate slowed to 1.5 percent in August.

The annual inflation rate for both regions has slowed dramatically from a year earlier. In the eurozone, the inflation rate 12 months prior was 2.6 percent. In the European Union in August 2012, the inflation rate stood at 2.7 percent.

For both regions, monthly inflation came to 0.1 percent in August.

The inflation rate in August was negative in Greece, Bulgaria and Latvia in August, with rates of minus 1 percent, minus 0.7 percent and minus 0.1 percent, respectively.

At a glance, prices dropping might seem like an accomplishment. But falling prices, called deflation, can trigger a hesitation to buy, which creates a stall in the economy. Companies then lay off workers because too few people are buying with the dynamics of deflation turning an economic stall into a rut.

Eurostat said the highest inflation rates in August were in Estonia, the Netherlands and Romania, with annual rates of 3.6 percent, 2.8 percent and 2.6 percent, respectively.

In Germany and France, the region's two largest economies, annual inflation was posted at 1.6 percent and 1 percent, respectively.

Copyright 2013 by United Press International

Crude oil slides on Syrian solution

Crude oil prices for October delivery dropped $1.65 to $106.56 per barrel Monday morning, as the market reacted to a deal over Syria's chemical weapons.

Russian and U.S. negotiators reached a deal in which Syria would relinquish control of the chemical weapons at the heart of an international crisis. President Barack Obama had threatened a military intervention after Syria allegedly attacked its own citizens with chemical weapons in late August.

Reformulated blendstock gasoline prices fell 5.28 cents to $2.7168 per gallon. Home heating oil dropped 4.99 cents to $3.0638 per gallon. Natural gas shed 3 cents to $3.65 per million British thermal units.

At the nation's gas stations, the national average price for unleaded gasoline fell to $3.517 per gallon Monday from Sunday's $3.523, the AAA Fuel Gauge report said.

Copyright 2013 by United Press International