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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
GM Hires Former Microsoft CFO; French Drug Maker Buys U.S. OTC Firm; Ford Looks to Reduce Workforce by 41,000; Galleon's Rajaratnam Pleads Innocent; China Backs Out of Investment In U.S. Gold Miner; Gold Falls Amid Interest-Rate Speculation; Recovery Hopes Send Treasury Yield Curve to Record High
- General Motors Co. hired Microsoft Corp. (Nasdaq: MSFT) Chief Financial Officer Chris Liddell to the same position, GM said yesterday (Monday). Liddell replaces Ray Young, who will be transferred to China as the automaker's vice president of international operations. "Chris will lead our financial and accounting operations on a global basis and will report directly to me," said GM Chairman and Interim Chief Executive Officer Ed Whitacre."We're also looking to his experience and insights in corporate strategy as a member of the senior leadership team in helping our restructuring efforts." Liddell, who already announced his Dec. 31 departure from Microsoft, will begin at GM sometime next month.
- French drug maker Sanofi-Aventis SA (NYSE ADR: SNY) has agreed to buy U.S. consumer healthcare group Chattem Inc. (Nasdaq: CHTT) in a deal valued at roughly $1.9 billion in cash, or $93.50 per share, a premium of 34% to Chattem's Friday closing price. The deal should give Sanofi a presence in the over-the-counter U.S. drug market. "It looks for me an interesting deal to generate a lot of synergies," Landesbank Baden- Wü rttemberg analyst Timo Kuerschner, told Reuters.
- Ford Motor Co. (NYSE: F) is offering buyout and early retirement incentives to all 41,000 of its hourly workers in the United States to reduce its work force. The buyout includes $50,000 cash plus a $25,000 car voucher or $20,000 more in cash. The retirement package is consists of $40,000 cash for skilled trades and $20,000 for production workers. Ford still has too many factory workers for its current sales levels, spokesman Mark Truby told The Associated Press.
- Galleon Group founder Raj Rajaratnam and co-defendant Danielle Chiesi yesterday (Monday) both pleaded innocent to charges of securities fraud in a U.S. district court in what prosecutors call the biggest hedge fund insider trading case ever. Assistant U.S. Attorney Joshua Klein said he expects the trial to last one month and is pushing for it to start in June or July to correspond with the August case with the U.S. Securities and Exchange Commission (SEC). Prosecutors allege Rajaratnam and Chiesi made $20.8 million in illegal profits.
- China's Northwest Nonferrous International Investment Co. has withdrawn from a $26.5 million deal to buy a 51% stake in Nevada gold miner Firstgold Corp. after the Obama administration objected on national security grounds, Firstgold Chief Executive Office Terry Lynch told Reuters. "It's terribly disappointing. I understand Northwest's position," Lynch said. "They're just a mining company looking to grow their mining portfolio globally. They had no idea that there was going to be such a political firestorm. This is way more than they bargained for." The Committee on Foreign Investment in the United States said the national security concerns arose because of Firstgold's Relief Canyon mine's close proximity to U.S. military installations, according to Lynch.
- Gold futures for December delivery fell 1.4% to end at $1,095.40 per ounce as speculation of an eventual hike in interest rates increased, MarketWatch.com reported. The speculation was spurred by several indicators that are expected to show the United States' recovery is gaining momentum. "Investors may see gold sliding to $1,000," Carsten Fritsch, an analyst at Commerzbank AG told MarketWatch. "The probable year-end gold price will be around U.S. $1,050."
- The Treasury yield curve, the difference between two and 10-year Treasury note yields, grew to a record 281.4 basis points yesterday (Monday). A barometer of the U.S. economy's health, the gap increased from 145 basis points at the beginning of the year as the U.S. Federal Reserve kept its target interest rate at near-zero levels and the nation extended the average maturity of its debt. "If you are going to have a recovery you are going to have higher inflationary pressures, so the curve should continue to steepen from here," Dan Greenhaus, chief economic strategist at Miller Tabak & Co. told Bloomberg News. "The curve could reach 300 to 325 basis points."