Insurance giant American International Group Inc. is buying SunAmerica Inc. for $16.5 billion in stock, getting more retirement planning business and new services to sell to its overseas customers.
SunAmerica's stock rose more than 11 percent as the most active New York Stock Exchange issue Thursday. AIG fell more than 7 percent as traders feared the purchase price would hurt the company's profits.
AIG, with far-reaching global operations, has been trying to expand its U.S. presence. Earlier this year the company tried to buy American Bankers Insurance Group in Miami, but was outbid by Cendant.
Founded in Shanghai in 1919 and now based in New York, AIG sells property, life, marine and casualty insurance through more than 300 insurance subsidiaries operating in 130 countries.
Under terms of the deal, each SunAmerica share will be exchanged for .855 share of AIG. At Thursday's price for AIG, SunAmerica shareholders would get stock worth $74.81 1/4 .
SunAmerica stock rose $7.12 1/2 to $71.37 1/2 , while AIG dropped $7.12 1/2 to $87.50.
AMP board rejects takeover offer
HARRISBURG, Pa. (AP) -- The board of AMP Inc. has rejected AlliedSignal Inc.'s $10 billion takeover offer as inadequate and overhauled its top management.
Robert Ripp, an ex-IBM executive who has been executive vice president at AMP, was named today as the electronic equipment maker's new chairman and chief executive.
AMP chairman James E. Marley will retire and chief executive officer William J. Hudson will step down to become vice chairman of the board.
The board was unanimous in rejecting AlliedSignal's tender offer of $44.50 in cash per share for all AMP's outstanding shares. Its stock closed at $39 a share Thursday on the New York Stock Exchange.
AMP is the world's largest manufacturer of electrical, electronic, fiber-optic and wireless interconnection devices and systems. The company has 48,300 employees in 53 countries. Its sales reached $5.7 billion in 1997.
AlliedSignal, with sales last year of $14.5 billion, has 70,500 employees in 40 countries.
Mortgage rates up slightly in week
WASHINGTON (AP) -- The average interest rate on 30-year fixed-rate mortgages rose slightly this week, to 6.92 percent, Freddie Mac, the mortgage company, said Thursday. The average increased from last week's 6.91 percent, which had matched a six-month low of five weeks before.
Fifteen-year mortgages, a popular option for refinancing, averaged 6.61 percent, up from 6.60 percent the previous week.
Netscape fixes browser bug
MOUNTAIN VIEW, Calif. (AP) -- Netscape Communications Corp. on Thursday released a new version of its World Wide Web browser that fixes a widely publicized e-mail bug capable of crashing computers.
The scheduled upgrade to Netscape's Communicator software also adds features that let users type in keywords to search more effectively on the Web.
The e-mail bug, which also affected two e-mail programs from Microsoft, was discovered in July by Finnish researchers. Microsoft released fixes on its Web site within days of the discovery, but Netscape waited until now to fix the flaw.
The upgrade is available at http://home.netscape.com/download.
Honda cuts prices of Acura TL 16%
TORRANCE, Calif. (Bloomberg) -- Honda Motor Co.'s Acura luxury division cut the base price on its redesigned 3.2 TL sedan by 16 percent, helped by factory cost-savings and spurred by pressure from rivals.
The 1999 TL will cost $27,950, down from $33,150 in 1998.
The price cut, which comes as production moves to the U.S., was critical because of competition from Nissan Motor Co.'s Infiniti J30 and Toyota Motor Corp.'s Lexus ES300, analysts said.
The new TL, which comes equipped with a 3.2-liter six cylinder engine, is built at Honda's plant in Marysville, Ohio.
The TL is the second Acura model to be designed and built in the U.S., boosting the Torrance, Calif.-based division's domestic production to more than 50 percent of sales.
The new TL arrives in showrooms Sept. 1.