United Airlines and US Airways called off their planned $4.3 billion merger, which would have been the industry's biggest, after the Justice Department announced its intention to block it. The department said the deal would give United a monopoly or duopoly on nonstop service on more than 30 routes, would substantially hurt competition on other routes, and would raise fares. US Airways has said the merger was its best hope of remaining profitable.
In what could be one of the costliest failures of a savings and loan to date, regulators closed Chicago-area Superior Bank, which has been battered by losses on loans to high-risk borrowers. The Federal Deposit Insurance Corp. was appointed as receiver, and the institution is to reopen today under a new charter, with depositors given full access to their insured funds, reports said. The failure is is expected to cost the federal insurance fund $500 million, industry experts said.
Pirelli and Benetton, two of the premier companies in Italy, announced they'll acquire joint control of communications giant Telecom Italia in a $6.1 billion deal. The terms, which are complex, call for Pirelli, one of the world's leading tiremakers, and Benetton, the clothing retailer, to take majority interest in Bell, a Luxembourg-based holding company. Bell owns a quarter-interest in the Olivetti conglomerate, which, in turn, is the largest shareholder in Telecom Italia.
In job-cut news:
* Eight thousand of the 11,500 workers at the only automaker in Yugoslavia are to be laid off, under an agreement to be signed today by the Zastava Group and the government. The purpose of the deal is to make the company more attractive to foreign investors, reports said.
* In another round of deep job cuts in the European banking industry, Germany's Dresdner Kleinwort Wasserstein will lay off 1,500 staffers, the Financial Times reported.
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