"I don't meet competition. I crush it."
-- Charles Revson, former chairman of Revlon Inc.
BREAKFAST WITH THE FOOL
By
News to Go
German conglomerate Siemens AG (OTC: SMAWY) is buying healthcare information and services company Shared Medical Systems for about $2 billion in cash, The Wall Street Journal reported. The deal represents about a 70% premium to Share Medical Systems' closing price of $41 7/16 on Friday. More Foolishness
Get 10 top news stories each day on your personal digital assistant... You can make the taxable gain from the sale of a rental property or a vacation home vanish... See why Mirage Resorts investors are yelling "Jackpot!"
The two parties have been trying to renegotiate a new contract since the last one expired December 31. Failure to do so will leave about 3.5 million viewers in 11 cities without ABC programming during the May television sweeps period, The Wall Street Journal reported.
At issue is Disney's desire to see Time Warner include some of its signature programming, such as The Disney Channel and SoapNet, carried on basic cable rather than pay stations. That would mean that Time Warner couldn't charge extra for them. Time Warner views that lost revenue as a mandated carrying charge.
Disney has been critical of the pending Time Warner/America Online (NYSE: AOL) merger, lobbying congress to carefully consider whether the blockbuster alliance will limit competitors' access to AOL subscribers. The fear is that AOL could direct its customers to Time Warner products and properties at the expense of other music, media, and entertainment companies.
For investors, the issue is worth examining since consolidation among Internet, cable, entertainment, and television companies is changing the landscape. In addition to the AOL/Time Warner deal, CBS (NYSE: CBS) is merging with Viacom (NYSE: VIA), The Seagram Co. (NYSE: VO) is widely believed to be on the shopping block, and Rupert Murdoch's News Corp. (NYSE: NWS) is always on the prowl for new alliances.
Investors shouldn't waste time guessing which companies might get bought, but they should understand there is a push-and-pull relationship between companies that develop content and those that distribute it, much like the relationship between name-brand consumer products companies and the retailers that sell their wares.
Dutch financial services company ING Groep (NYSE: ING) has reached an agreement to buy U.S. insurance and financial company ReliaStar (NYSE: RLR) for $6.1 billion in cash. The deal makes ING the eighth-largest life insurer in the U.S., Bloomberg reported. ING paid a hefty 75% premium for the company, based on ReliaStar's closing price on Thursday.
Contract electronics manufacturer Solectron (NYSE: SLR) said the company may fall short of fiscal third-quarter estimates because of delays closing a deal with Nortel (NYSE: NT), and from component shortages and changes in product configuration requirements. The Nortel deal is expected to close later this year. Meanwhile, Solectron expects Q3 sales of $3.4 billion to $3.5 billion and earnings of $0.20 to $0.22 per diluted share. Analysts expected earnings of $0.22.
RSS Headlines
Fool UK
