Business news in brief

Thursday, February 20, 2014

QUOTE OF THE DAY

“Here was an opportunity that allowed me to stay in the private sector and follow the passions I’ve had all along. The more I thought about it, the more it just made sense.”

Darin Gray, Cranford Johnson Robinson Woods Article, 1D

Facebook strikes deal to buy WhatsApp

SAN FRANCISCO - Facebook Inc. has agreed to buy popular mobile messaging company WhatsApp Inc. for about $16 billion in cash and stock, the giant social network said Wednesday.

WhatsApp’s owners would get $4 billion in cash and about $12 billion in Facebook shares. In addition, $3 billion in restricted stock would be granted to WhatsApp’s founders and employees. The stock would vest over four years after the deal closes.

If it goes through, the deal would hand Facebook a mobile messaging service that is especially popular with young people. More than 450 million people use the service each month. It’s currently adding more than 1 million new users each day.

In a statement, Facebook said the deal would help speed growth and user engagement for both companies.

The announcement said that Koum, WhatsApp co-founder and CEO, would join Facebook’s board.

WhatsApp’s messaging product and Facebook’s Messenger app will continue to operate as stand-alone applications, Facebook said.

Facebook had twice tried to buy another popular messaging app, Snapchat.

Tyson names exec for beef management

Kevin Hueser has been named senior vice president of beef margin management at Tyson Foods Inc.

Hueser moved into the new role to fill a position that was vacated when the executive leadership changed, said company spokesman Worth Sparkman.

“A big part of Kevin’s job is [to] manage the margin between the cost of producing a product, and the price we can charge a customer for that product,” Sparkman said.

Hueser started his career with Tyson after it acquired IBP, a beef-processing company, where he had been employed since 1984.

Business-jet shipments end 4-year skid

Business-jet shipments worldwide rose last year for the first time since 2008 as corporate purchases of larger planes aided an industry that saw deliveries tumble by almost half during the recession.

Manufacturers shipped 678 of the planes, six more than in 2012, the Washington-based General Aviation Manufacturers Association said Wednesday. That included a gain of 22 percent to 249 for the bigger models, while midsize and smaller planes fell 8.3 percent to 429.

“We’re heading in the right direction, but we’re definitely not out of the woods yet,” said Pete Bunce, the trade group’s president. “If you peel back the onion and parse the numbers a little bit, there are still significant problems in the light-to mid area.”

Chief executive officers from large companies are flying farther as international business expands, spurring demand for the biggest jets from makers such as Gulfstream Aerospace Corp. and Dassault Aviation SA. Manufacturers such as Textron Inc.’s Cessna that make smaller models still face a slow economic recovery, sparse financing and cheap used planes, Bunce said.

FCC to draft new Internet equality rules

The Federal Communications Commission said it will write new rules to prevent Internet service providers from discriminating against websites after a court struck down earlier regulations.

FCC Chairman Tom Wheeler said Wednesday that he will ask commissioners to pass rules that forbid blocking of Web content and ensure providers treat all Web traffic equally - the same goals included in regulations passed by the agency in 2010 and vacated last month by an appeals court.

Judges said the agency chose a faulty legal foundation, and Wheeler said the FCC would base the new rules on a different authority outlined by the court. The agency won’t appeal the Jan. 14 court ruling, he said.

“Today we initiate several steps to ensure that the Internet remains a platform for innovation, economic growth, and free expression,” Wheeler said in a statement.

The rules had barred companies from blocking or interfering with Web traffic. The court ruling gave Internet service providers such as Verizon Communications Inc. the freedom to charge companies such as Netflix Inc. and Amazon.com Inc. for fast connections.

Bank of America settlement delay tossed

Bank of America Corp.’s $8.5 billion settlement with mortgage-bond investors won’t be delayed after American International Group Inc. and other objectors asked for a hearing to address loan modifications excluded from the accord, a state judge ruled.

New York State Supreme Court Justice Barbara Kapnick in Manhattan on Jan. 31 approved most of the bank’s 2011 deal to end claims by investors in more than 500 mortgage security trusts that the loans backing the bonds didn’t meet promised quality. Kapnick refused to include claims Bank of America was required to repurchase modified loans, saying the trustee, Bank of New York Mellon Corp., failed to properly evaluate them.

On Wednesday, Justice Saliann Scarpulla, who took over the case, said she will not delay the settlement, which will be made effective “expeditiously,” she said.

Analyst: Saudi Arabia oil boost needed

Saudi Arabia, the world’s biggest crude exporter, probably needs to increase shipments this year to keep pace with record government spending, according to a former adviser to the nation’s Finance Ministry.

The country needs to at least match the 7.54 million barrels a day it shipped last year and will probably need to sell more, said John Sfakianakis, chief investment strategist at Riyadh-based MASIC, an investment company. He previously worked as chief economist for two Saudi Arabian banks and worked in the Ministry of Finance as a full-time adviser between 2011 and 2013.

Extra shipments could be negative for oil prices because of expanding supplies elsewhere. Iran, Iraq and Libya, among countries with the world’s biggest reserves, will pump more crude this year, according to the most accurate forecasters surveyed by Bloomberg in December. Saudi Arabia is known as a swing producer, as it alters supply depending on demand.

Business, Pages 26 on 02/20/2014