Merrill’s Foreign Boost, Samsung’s Chip Dip

last updated 11 January 2015

NEWS AT A GLANCE

Merrill gets a little help from abroad

Merrill Lynch said this morning that it had negotiated a $6.6 billion infusion of cash from three foreign investors: the Korean Investment Corp., Kuwait Investment Authority, and Japan’s Mizuho Corporate Bank. The funds will be passive investors. (AP in Yahoo! Finance) Mizuho’s is the first investment by a Japanese bank in a U.S. rival since 1989. “How the times have changed,” said analyst David Threadgold at Fox-Pittman, Kelton in Tokyo. “It’s a mere five years since Merrill was investing in Mizuho.” (Reuters) Citigroup, meanwhile, announced a $14.5 billion infusion this morning—even as it posted a record $9.8 billion quarterly loss, including $18 billion in write-downs, and cut its dividend by 41 percent. (Bloomberg)

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Korea’s Samsung Electronics said that its fourth-quarter profit fell 6.6 percent to $2.36 billion, as sinking computer memory-chip prices outweighed record cellphone handset sales. Samsung is the world’s largest maker of memory chips and the No. 2 cellphone producer. (AP in Yahoo! Finance) The earnings beat analysts’ expectations, and Samsung shares rose in Seoul early today. (MarketWatch) Separately, a special prosecutor raided the office of Samsung Group Chairman Lee Kun-hee and the homes of his aides yesterday, in a bribery and nepotism investigation. Officials are looking into how Lee passed the reins of the $152 billion Samsung empire, which includes the electronics division, to his son. (The New York Times, free registration)

Delta Air Lines has started merger talks with United Airlines and Northwest Airlines, The Wall Street Journal reported, and hopes to reach a deal in the next two weeks. Delta’s board gave CEO Richard Anderson the green light on Friday to pursue talks with both airlines simultaneously. (Reuters) A merger with either rival carrier would create the largest U.S. airline. (Bloomberg) In other aviation news, European aerospace giant EADS, the parent of Airbus, upped the stakes in its bid to win an Air Force contract worth at least $40 billion from rival Boeing, saying it would assemble the 179 tanker jets in the U.S. (Los Angeles Times, free registration)

The TV writers’ strike is making Fox’s American Idol franchise even more profitable. Idol now commands the highest ad rates of any TV show, about $900,000 for a 30-second spot, earning the show $18 million an hour. Before the strike started in November, 30 seconds on Idol cost $780,000. The Idol juggernaut will probably also keep Fox the top draw for the coveted 18- to 49-year-old viewing demographic for the fourth year in a row. “It’s the biggest thing in a landscape where there aren’t as many big things as there used to be,” said ad buyer Geoff Robison at Palisades MediaGroup. (Bloomberg)