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Swiss Re picks up GE's Insurance Solutions
Zurich, Switzerland: Swiss Reinsurance Co., the world's second-largest reinsurer, is set to acquire most of General Electric Co.'s insurance unit for US$6.8bn in cash and stock. GE Insurance Solutions is the world's fifth-largest reinsurer, and its acquisition will help Swiss Re compete with Germany-based Munich Re, the world's largest reinsurer.

Reinsurers sell backup insurance to other insurance companies.

As part of the deal Swiss Re will also assume US$1.7bn in GE's debt. Swiss Re plans to finance the purchase by raising US$7.5bn in new capital.

GE Insurance Solutions' U.S. life and health business will not be part of the Swiss Re transaction.

GE, the industrial products, financial services and media conglomerate based in Fairfield, Conn., has been selling insurance operations to focus on faster-growth businesses. "We think this is a tremendous drag that has been eliminated from this company going forward," GE Chairman and Chief Executive Jeff Immelt said during a conference call with analysts.

As it announced the deal, GE also said its board has raised the quarterly dividend 14 per cent to 25 cents a share. The board has also expanded the existing share repurchase plan from US$15bn through 2007 to US$25bn through 2008. The company said it plans to purchase more than US$4bn of stock during 2005, and up to US$9bn in 2006 and US$6-8bn per year in 2007 and 2008.

Swiss Re will now have an estimated annual revenue of US$34.9bn, compared to Munich Re's US$44.5bn. The addition of the GE unit will add approximately US$6.2 billion in revenue. The deal also means that Swiss Re will have a bigger slice of the U.S. reinsurance market.
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Cisco's acquires Scientific-Atlanta
San Jose, USA: Cisco Systems announced Friday that it will acquire Scientific-Atlanta, one of the largest makers of set-top boxes and video transmission technology in the cable industry, in a deal ultimately valued at US$5.3bn.

Cisco is one of the companies that have been talking about network convergence, which means that data, voice and video traffic will one day travel over a single network. The vision has already come to fruition within the carrier's network. Most cable operators and phone companies carry their internal traffic over an Internet protocol, or IP, network that uses Cisco routing and switching equipment.

Now the trend is finally making its way into the home, as cable companies and phone companies start offering customers a triple play of services that includes high-speed Internet access, telephony and, finally, video--all over an IP network.

Scientific-Atlanta is one of the largest makers of set-top boxes. Along with competitor Motorola, it dominates the market for these devices, which are increasingly becoming more sophisticated. Cable operators and phone companies see these devices as the cornerstone of their strategies to deliver new services, such as digital high-definition television, movies and TV shows on demand, and digital video recording.

The acquisition, one of Cisco's largest by far, means the company will be able to supply much of the gear that cable operators and phone companies need to provide increasingly sophisticated video services to consumers.
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HP's robust performance cheers despite 62 per cent drop in profits
Palo Alto, USA: Computer giant Hewlett-Packard has booked a 62 per cent fall in quarterly profits but has cheered investors with a steady rise in sales, sending the stock six per cent higher in after-hours trading.

HP said that net revenue increased 7 per cent year-over-year to US$22.9bn. GAAP operating profit was US$232mn. During the quarter, on a year-over-year basis, revenue in the Americas grew 5% to US$10.0bn, Europe, the Middle East and Africa grew 8% to US$9.1bn, and Asia Pacific grew 12% to US$3.8bn. On a consolidated basis, when adjusted for the effects of currency, fourth quarter revenue grew 6% year-over-year.

Chief executive Mark Hurd, who earlier this year replaced Carly Fiorina after she was ousted, said: "We've been doing a lot of things in the company at the same time and we've been doing that well.

The latest results show HP's operating performance improving across a range of businesses and the figures contrast with disappointing reports from PC rival Dell and printer maker Lexmark International.

Hurd said good cost controls has allowed the company to pay HP workers their first bonus in several years.
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