Business & Finance
As expected, Ford Motor Co. agreed to sell its Hertz car-rental business to a consortium of private equity groups for $15 billion - almost $10 billion of it in assumed debt. The buyers: Clayton Dubilier & Rice, the Carlyle Group, and Merrill Lynch Global Private Equity, all of New York. Separately, Ford and the Canadian Auto Workers Union reached tentative agreement on a new three-year contract that calls for the smallest pay increase in two decades. Under the pact, Ford will close a plant in Windsor, Ontario, and will phase out V-6 engine production, which is expected to result in the loss of more than 1,000 jobs.
Banking giant Wachovia agreed to pay $3.9 billion for Westcorp and its auto-loan subsidiary, WFS Financial. The transaction will give Wachovia a new foothold in California, making it a national player in the vehicle-financing business. Wachovia is based in Charlotte, N.C.; Westcorp in the Los Angeles suburb of Irvine. The move follows Bank of America's purchase in July of $55 billion worth of General Motors' car- and truck-loan portfolio.
Dumping out of the cellphone market in Russia, Deutsche Telekom sold its remaining stake in OJSC Mobile Tele Systems for $1.6 billion in a public offering. At its peak, Deutsche Telekom controlled 40 percent of the company's stock but has been reducing that stake in recent years.
In a deal valued at $1.42 billion, a consortium of oil companies from China bought the assets of EnCana Corp. in Ecuador, reports said. The package includes a pipeline and proven crude oil reserves of 143 million barrels. EnCana, based in Calgary, Alberta, also is selling its natural gas business to concentrate on western Canada's oil sands and other so-called unconventional energy resources.
Struggling Varig, the national airline of Brazil, filed a plan to split in two and cut more than 1,500 jobs by the end of next year. The carrier said it hoped its new unit, Nova Varig, which will manage two feeder airlines and other operations, will be merged back into the company once its debt problems have been resolved. Varig owes creditors $3.3 billion.
Without announcing a target date, Toyota said all its new vehicles will be powered by hybrid gasoline/electric engines. Currently, seven of Toyota's models are built with such engines, more than any of its competitors. The company said it has sold 425,000 hybrids since 1997 and is aiming to produce up to 400,000 more next year.