In the Region State Senate OKs rise in minority...

BUSINESS DIGEST

March 14, 2001

In the Region

State Senate OKs rise in minority contracting goal

The Maryland Senate passed Gov. Parris N. Glendening's bill yesterday raising the state's minority business contracting goal from 14 percent to 25 percent, putting the governor a step closer to achieving one of his top goals in the 2001 General Assembly.

Senators voted 39-8 for the bill. Five Republicans joined all of the chamber's 34 Democrats in the voting.

Meanwhile, the House of Delegates gave preliminary approval to its version of the bill, after rejecting attempts to amend it. The two chambers will have to reconcile their versions of the bill before final passage, but the relatively minor differences are not expected to block enactment.

Novavax calls test results for Estrasorb positive

Columbia-based Novavax Inc. said yesterday that its experimental estrogen-replacement cream showed positive results in a final phase of human testing, clearing the way for the company to apply for marketing approval.

Menopausal women using the company's Estrasorb cream in a Phase III clinical trial reported fewer hot flashes than those using a placebo in a 13-week study involving 200 women, Novavax said. The company said the difference was statistically significant.

Novavax hired Quintiles Transnational Corp., a contract research company, to help prepare an application to the Food and Drug Administration to market Estrasorb.

W. R. Grace buys maker of separation products

W. R. Grace & Co. said yesterday that it acquired Separations Group, a Hesperia, Calif., maker of chemical separation products used in the petroleum, environmental, agricultural and pharmaceutical industries.

The Columbia-based chemicals maker did not disclose what it paid for the company, which will become a unit of Grace's Davison Chemicals-Silica Products division.

Separations Group had $6 million in revenue last year. Grace's Davison Chemicals division reported revenue of $784 million.

Elsewhere

GE foresees profit for this year to rise at least 10%

General Electric Co. said yesterday that it expects its 2001 profit to rise by at least 10 percent in a slowing U.S. economy, and the company raised the estimate of savings from its planned purchase of Honeywell International Inc. again.

President and Chairman-elect Jeffrey Immelt said the breadth of the company's businesses will ensure that it meets expectations, He said GE's earnings are ensured by an order backlog of more than $44 billion in so-called long-cycle businesses - orders for turbines, aircraft engines and expensive equipment financed and serviced over years.

Savings from Honeywell will total $3 billion, Immelt said. The company first estimated savings of $1.5 billion and increased the figure in December to $2.5 billion.

Slowdown in Asia deals another blow to Cisco

Business is now weakening in Asia on top of a severe U.S. slowdown, according to another bleak update from Cisco Systems Inc., the network equipment maker most emblematic of the technology bull market now being ripped to shreds on Wall Street.

Chief Executive John T. Chambers told investors at the Merrill Lynch Global Communications Conference in New York yesterday that conditions haven't improved from the sharp downturn Cisco experienced in January, and he said the near-term outlook is still grim.

However, Chambers didn't officially lower his company's forecasts as he did in January. At the time, executives warned that revenue could fall as much as 5 percent in the current fiscal third quarter - the first decline in its 11-year history as a public company.

Tyco buys lender to finance its sales

Tyco International Ltd. is buying commercial lender CIT Group Inc. for about $9.2 billion in cash and stock in a deal that would allow the manufacturer to finance purchases of its wide array of products. The deal, announced yesterday, would give CIT shareholders a 54 percent premium for their shares over Monday's closing prices.

Most CIT shareholders will get stock for their shares, but a Japanese bank that owns 27 percent of CIT will get cash. Tyco is paying 0.6907 Tyco shares for each CIT share, representing $35.02 a share in value based on Tyco's closing price Monday of $50.70 a share. But Tyco is paying $35.02 a share in cash to Dai-Ichi Kangyo Bank for its 71 million CIT shares.

The deal was approved by the boards of both companies, but is subject to approval by CIT shareholders and regulators.

Ex-president of Mexico named to P&G's board

Procter & Gamble Co., the largest U.S. maker of household products, said it has named former Mexican President Ernesto Zedillo to its 13-member board.

Zedillo, whose six-year term ended Dec. 1 when Vicente Fox was inaugurated, is an economist with a doctoral degree from Yale University. He replaces Vice President Dick Cheney, who resigned after his election in 2000.

Procter & Gamble gets $1.5 billion in sales from Mexico, making the nation its fifth-largest market with 3.8 percent of total sales.

FCC seeks $1 million fine against phone company

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