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European Business News (EBN), 97-10-21

European Business News (EBN) Directory - Previous Article

From: The European Business News Server at <>

Page last updated Tue, October 21 6:50 PM CET


  • [01] ABB plans to cut 10,000 jobs in Western Europe and the US
  • [02] Tietmeyer pleased with brighter picture for German economy
  • [03] Microsoft is investigated by EU and US antitrust regulators
  • [04] Citicorp plans to slash 7,500 jobs worldwide
  • [05] US August trade gap widens to $10.4 billion
  • [06] IBM third-quarter earnings increase 6%, beating Wall Street's expectations
  • [07] Communist controlled Duma withdraws no-confidence vote
  • [08] Fazio says Italy is on course for EMU
  • [09] CBI says UK export orders hit 6-year low
  • [10] SIB attacks Prudential over personal pensions
  • [11] Russia rejoins De Beers cartel
  • [12] SmithKline Beecham profit gains just 3% in third quarter as strong pound damps growth
  • [13] Harrisons & Crosfield starts revamp, sells Harcros
  • [14] Wolseley full-year earnings rise 8.8% to $430 million
  • [15] Corporate and Economic Briefs
  • [16] Sports Update from The Big Game

  • [01] ABB plans to cut 10,000 jobs in Western Europe and the US

    ABB Asea Brown Boveri said that it plans to cut 10,000 jobs in Western Europe and the U.S.

    The Swiss-Swedish engineering group said it will shift more resources to emerging markets, while maintaining its core competence centres in Europe and North America.

    'This initiative is expected to lead to the closure and downsizing of some of our facilities in higher-cost countries resulting in the reduction of about 10,000 jobs,' said ABB president and chief executive officer Goeran Lindahl said in a statement released with ABB's nine-month results.

    Asea Brown Boveri blamed sluggish demand in Western Europe and a strong dollar for declines in net profit and sales for the first nine months of 1997. A massive restructuring charge will be booked in the fourth quarter.

    In a press release issued, the company said sales fell 4.5% to $22.46 billion from $23.53 billion in the first nine months of 1996. Net profit fell 4.3% to $774 million from $809 million. Expressed in local currencies net profit rose 4.0%, ABB said.

    The strength of the dollar had a positive effect, however, in the translation of group profits into those for ABB's Swedish and Swiss parent companies.

    Earnings per share at Sweden's ABB AB grew 9.0% to 3.15Kr from 2.90Kr; those at Swiss ABB AG rose 13% to SF62.35 from SF55.40.

    The group's order intake grew 13.0% to $28.1 billion from January to September this year, against an adjusted $24.92 billion in 1996. The latter was adjusted downwards from $25.44 billion as customer advances previously included were expunged.

    In order to boost its competitiveness and support expansion in Asia the ABB said it would take a $850 million restructuring charge in the fourth quarter of 1997.

    ABB expect net income for the full year 1997 'to be somewhat lower than last year.'

    This estimate doesn't include the impact of the $850 million restructuring charge, but includes expected restructuring costs in Adtranz and costs related to the indefinite delay of the Bakun project.

    [02] Tietmeyer pleased with brighter picture for German economy

    Deutsche Bundesbank President Hans Tietmeyer said he was pleased with the slowdown of Germany's broad M3 money supply growth in September.

    But Tietmeyer added the German central bank is awaiting further developments in economic data and the financial markets to guide its monetary policy.

    'The Bundesbank is now awaiting further developments in data and the markets,' Tietmeyer said before an investors group in Duesseldorf.

    'Today's M3 figures show that money supply development seen in the last few months didn't accelerate.'

    M3 expanded at a seasonally adjusted annualized 5.2% in September from its average level in the fourth quarter of 1996, the Bundesbank announced earlier.

    That rate is slower than the previous month's annualized rate of 5.8%, and well within the Bundesbank's target corridor for M3 growth range in 1997 of 3.5% to 6.5%.

    The Ifo economic institute also reported that business confidence rose in Germany by more than expected in September, hitting 100.1, up from 98.9 in August. The survey showed that confidence was rising in both eastern and western Germany.

    The fresh German data painted a favourable picture of an economy growing steadily with little sign of inflation on the horizon, giving little reason to suggest that the Bundesbank will raise rates again before the end of the year.

    Tietmeyer noted the increase on Oct. 9 in the repurchase securities rate to 3.30% from 3.00% was a response to what had become an expansionary monetary policy, in which there were some signs of stability risks. The rate increase was the first time that the Bundesbank had tightened monetary policy in more than five years.

    'A correction was necessary to damp inflation potential in the run-up to currency union,' Tietmeyer said.

    'Our monetary policy had become more expansive despite a steady rate policy amid a changing environment during the course of the past year,' Tietmeyer said.

    'At the same time, there were signs of stability risks in various areas, even though the current price development should in no way be dramatized.'

    Tietmeyer's comments follow a week-long roadshow by a number Bundesbank officials who commented both at home and abroad on the rate increase.

    Many of them attributed the recent rate rise to domestic pressures and EMU convergence purposes.

    Several of the 17 members of the Bundesbank's policy-making Central Bank Council even suggested that the rise was the start of a series of further increases.

    Analysts speculated the Bundesbank chose to raise rates to prepare the ground for European interest rate convergence before participants are chosen for the currency union in May 1998.

    [03] Microsoft is investigated by EU and US antitrust regulators

    The European Union Commission is officially probing Microsoft Corp.'s contracts with European Internet service providers, but won't take a decision on whether to slap fines on the US software giant soon, largely because of its own legal procedures, a Commission official said.

    The staff of EU competition chief Karel Van Miert 'are still in the process of examining a series of contracts between Microsoft and service providers which could have the same foreclosure effect as presented by our U.S. partners,' the official, who asked not to be named, said.

    The US Justice Department asked a US court to impose daily fines of $1 million on Microsoft if it continues to violate a 1995 court order that barred it from imposing anti-competitive licensing terms on PC makers. It also asked that the court hold Microsoft in civil contempt.

    Specifically, the US authority asked the court to stop Microsoft from tying the use of its Windows 95 operating system to the use of its Internet browser, a tool to navigate the Internet. For years Microsoft has required personal-computer makers that license Windows 95 to install the company's Internet Explorer browser on all their computers, and has rejected manufacturers' pleas to install Windows 95 without the browser, the US government's court filing says.

    On this side of the Atlantic, the Commission is conducting several investigations into Microsoft business practices, including a probe of the contracts it signs with service providers. The Commission official couldn't say how many contracts it was investigating, nor how many countries were involved.

    He also couldn't say when a decision was likely. Microsoft, the largest developer, manufacturer and supplier of PC software globally, supplies the MS-DOS and Windows operating systems used in more than 120 million personal computers. But Microsoft's Netscape's rival Navigator is the leading Internet browser.

    Currently, PC consumers can choose to install either the Microsoft or the Netscape browser. Both work with Windows 95, but the Microsoft browser comes free while Netscape charges about $50 for its latest browser software. John Frank, director for law and corporate affairs at Microsoft Europe in Paris, confirmed that the Commission's investigation was focusing on the software giant's contracts with Internet providers, while the Justice Department is querying its relationship with PC makers.

    He said Microsoft believes it is complying fully with the terms of a 1994 antitrust agreement struck with the EU Commission and the Justice Department. The US agreement resulted in a consent decree - which the Justice Department say Microsoft is now breaching.

    'We believe we're operating in full compliance with the consent decree and with competition laws,' Frank said. The regulators aren't so sure, however. The Commission official noted Tuesday that while the 1994 agreement did permit Microsoft to market and develop integrated products, it didn't allow it to tie its operating system with the purchase of another product, such as its Internet browser license.

    'This 1994 undertaking explicitly sets out that Microsoft may market and develop so-called integrated products which include additional complementary functions,' he said. 'But what isn't authorized is the purchase of a license for the operating system which is tied in to the license for buying another product.'

    [04] Citicorp plans to slash 7,500 jobs worldwide

    Citicorp said it plans to cut 9,000 existing positions in the next 12 to 18 months, but about 1,500 positions will be added as part of the company's restructuring program, resulting in a net reduction of 7,500 jobs.

    Citicorp said its labour force reduction is part of its attempt to consolidate and standardize its operations and technology platforms to improve its efficiency.

    The bank's adjusted revenues and adjusted operating expense for the latest third quarter rose by 11% and 9%, respectively, from a year ago, both reduced by 3% due to the effect of a strengthened dollar on foreign currency translation.

    Adjusted revenue growth was led by strong results in global corporate banking and solid performances by Citibanking and the Private Bank, but was hurt by low growth in cards. Corporate and consumer revenue in the emerging markets rose 17%, while revenue in the developed markets businesses rose by 8%. Adjusted operating expense rose 12% in emerging markets reflecting business expansion, while expense in the developed markets businesses rose 7%.

    In the latest quarter, Citibank's card earnings in developed markets fell 26% from the year-ago period, excluding restructuring charges. Net income for cards in emerging markets, also excluding restructuring, rose 12% in the quarter and represented about 38% of its third quarter Cards earnings compared with 29% in 1996.

    Net income from Cards worldwide, which includes bankcards, Diners Club and private label cards, was $205 million in the third quarter, down $36 million from the year-ago third quarter. Compared with the year-ago nine month period, Citicorp Cards worldwide earnings fell $123 million to $618 million, excluding the effect of a $58 million restructuring charge. The decrease was attributed to higher losses in US bankcards. Third quarter net income from Cards worldwide rose 8% from the second quarter.

    Consumer credit costs rose $53 million from a year ago primarily due to U.S. bankcards, which reported credit costs of $639 million or 5.58% of the average managed loans for the quarter up $89 million from a year ago but down $44 million from the 1997 second quarter, the first decrease in U.S. Bankcards credit costs since the third quarter of 1994. Costs included an $11 million or 10 basis point benefit as a result of the sale of certain chargeoff accounts,

    Global corporate banking credit costs remained low.

    [05] US August trade gap widens to $10.4 billion

    The US trade deficit widened to $10.4 billion in August, the worst showing in seven months, as a flood of imported toys and Christmas decorations pushed the deficit with China to an all-time high.

    The Commerce Department said that the worse-than-expected showing for August represented a $3.4 increase from a revised July deficit of $10 billion.

    Exports edged up a tiny 0.2%, led by the first gain in sales of American farm products this year. But imports were up 0.6% to a record high as Americans' appetite for foreign products continued unabated.

    So far this year, the gap between what America sells abroad and what it imports is running at an annual rate of $114 billion, even worse than the eight-year high of $111 billion set last year.

    The widening trade gap is coming at a bad time for US President Bill Clinton, who is trying to round up enough votes in Congress to give him the authority to negotiate new free-trade agreements along the lines of the 1993 accord with Mexico.

    [06] IBM third-quarter earnings increase 6%, beating Wall Street's expectations

    International Business Machines said that its earnings rose 6% in the third quarter, despite currency fluctuations, beating Wall Street's expectations.

    The world's largest computer maker said it earned $1.37 billion, or $1.38 a share, compared with $1.29 billion or $1.23 a share last year. The earnings per share growth of 12% reflected share buybacks of about $1.6 billion in the quarter.

    Analysts had expected IBM to earn $1.36 a share on average, according to First Call, which tracks estimates.

    'This quarter saw a continuation of trends that have been evident the last several quarters,' Chairman Louis Gerstner said, citing strength in computer services, where sales grew 20%, and in sales of personal computers to businesses.

    Cost controls and a lower tax rate overcame the negative impact of a strong U.S. dollar and falling revenue at key hardware and software business units.

    The third-quarter results underscored how well IBM is doing at managing such financial levers as tax rates and share buybacks to post earnings growth -- but also how difficult it is for the computer maker to significantly increase revenues and any resulting profit from its main businesses. IBM's hardware revenue was flat and software revenue and maintenance revenue fell. Only computer services rose strongly -- up 20%.

    IBM earned $1.36 billion, or $1.38 a share, up from $1.29 billion, or $1.22 a share, in the year-ago period (adjusted for a stock split in May). Revenue rose 3% to $18.6 billion from $18.1 billion in the year-ago period. The third-quarter net exceeded analysts' consensus projections by two cents a share, according to the First Call tracking service.

    [07] Communist controlled Duma withdraws no-confidence vote

    Opposition leaders in Russia's State Duma took a motion of no-confidence in the government off the parliament's agenda after receiving assurances from President Boris Yeltsin their concerns will be addressed.

    'All the questions we posed, he promised to solve,' Communist leader Gennady Zyuganov told reporters after a meeting of his faction.

    'The faction has made the decision to take this issue off the agenda,' Zyuganov said, noting that the decision was unanimous.

    Two smaller hardline factions - the Agrarians and People's Power - also backed the no-confidence motion but appeared likely to join the Communists in taking the item off Wednesday's agenda.

    Tass quoted a leader of the Agrarian faction as saying his group agreed that the motion should be taken off the agenda.

    The Duma wants changes in planned housing reforms and currency redenomination plans that will remove three zeros from rouble prices on January 1. It also wants regular round-table consultations with the Kremlin and airtime on state broadcast networks. The first round table is scheduled for November 22.

    [08] Fazio says Italy is on course for EMU

    Bank of Italy Governor Antonio Fazio said the government should meet its objective of 1.2% growth in gross domestic product in 1997 and could exceed a target of 2.0% in 1998, remaining on course for EMU.

    In an address before a joint parliamentary budget commission, Fazio also said that the central bank would follow a monetary policy aimed at preventing recently announced tax increases from negatively influencing inflation expectations.

    Fazio also told the commission that budget deficit figures for the first nine months of the year are in line with the government's 3.0% deficit-to- GDP target for 1997. Fazio said the impact of higher value-added taxes on the inflation rate could be quantified at about 0.7% in coming months and he isn't convinced inflation was dead.

    However, he said growth in M2 money supply figures isn't out of hand. Some economists said they had been worried about the impact growth in this figure could have on inflation, but Fazio said the rise in M2 was due simply to changes in investor portfolios.

    The Bank of Italy's main money supply measure, the so-called M2 money aggregate, in August rose 11.0% from a year earlier, and has been rising by at least a 6% annualized rate since this February.

    Fazio called on Italy's government to accelerate the pension reforms first agreed upon under the government of Lamberto Dini, who is now Italy's Foreign Minister. He stressed the importance that cuts made to the pension system be of a structural and lasting nature.

    'The notable potential in terms of the work force, savings, technical and managerial capacity will allow our economy to return to an annual growth rate that could already be superior to 2.0% in 1998,' Fazio said.

    The Bank of Italy Governor noted that planned cuts to the pension system are less than those outlined in the government's three-year economic planning document and called on the government, industrialists and unions to adequately define planned pension reform measures.

    [09] CBI says UK export orders hit 6-year low

    British export orders are at their lowest level since 1991 and prices are expected to be more of a constraint on exports over the next four months than at any time since 1981, the Confederation of British Industry said.

    But the CBI said in its latest quarterly survey of industrial trends that business confidence had risen slightly among manufacturers, with slightly faster growth in output over the past four months. The employers' group surveyed 1,001 manufacturing firms between September 18 and October 8.

    Andrew Buxton, chairman of the CBI's Economic Affairs Committee, said the improvement in optimism may well reflect sterling's fall since the previous CBI survey in July - a fall that has been partially reversed since government officials indicated Britain was unlikely to join Europe's single currency in the next five years.

    40% of manufacturers surveyed said their export orders were down and 17% up, giving a negative balance of 23%, compared with 20% in July and 7% in April. And exporters said they expected prices to be more of a constraint in the period ahead than at any time since April 1981. Nevertheless, the CBI said the export order trend was likely to improve.

    'Over the coming four months manufacturers expect total and domestic orders to grow more strongly, although - as with export orders - expectations have not been met over the last two and a half years,' it said.

    The growth in total new orders slowed over the past four months, down from a balance of 10% of manufacturers reporting growth in July to six percent in October. Domestic demand growth was at the slowest rate this year and inflationary pressures in manufacturing continued to be subdued.

    'Unit costs fell more slowly than expected, and are expected to stay flat over the coming four months,' the survey said.

    Price expectations were the weakest in an October survey since 1993, with export prices falling for the sixth quarter running and likely to fall further.

    'Inflationary pressures in manufacturing remain subdued with unit costs and prices firmly under control so we believe that interest rates can stay on hold for now,' Buxton said.

    The CBI said skill shortages were becoming more of a problem, with 17% of manufacturers expecting limits on their output as a result - the highest percentage since 1990.

    [10] SIB attacks Prudential over personal pensions

    the Securities and Investments Board has hit out at Prudential over its failure to review its personal pensions.

    The SIB said 'failure by the Prudential to meet an agreed target in the pensions review timetable reflects serious shortcomings in its conduct of the pensions review.'

    'The Prudential has failed, notwithstanding the resources that it has deployed in relation to the pensions review to exercise the requisite due skill, care and diligence required of it in its conduct of the pensions review,' the regulator said.

    The SIB said it is 'deeply concerned' by the cumulative impact if the company's failures.

    The regulator said 'the timely completion of the pensions review is of paramount importance.'

    Prudential has been participating in an industry-wide review of personal pension selling. The SIB said it expects a regulated firm to be able to organise its own affairs and complete its personal pensions review within the publicly announced framework.

    The regulator said it will continue to monitor with increased awareness the progress in meeting the other agreed targets in its review of selling personal pensions. On Aug. 20, 1997 the Prudential informed the SIB that it would be unlikely to comply with the September target. This was due to its failure to update its systems for deaths and retirements of around 8,000 investors who had died or retired since the start of the review.

    The Prudential has however now made significant changes to its management approach and to its operational controls so as to address the earlier failings, the regulator said.

    [11] Russia rejoins De Beers cartel

    De Beers Centenary, the offshore arm of South Africa's De Beers diamond conglomerate, signed a long-delayed trade agreement with the Russian government.

    De Beers said in a statement an agreement has been concluded to allow the sale of Russian rough diamonds by state-owned Almazy Rossii-Sakha to De Beers' Central Selling Organization.

    According to De Beers, the agreement will take effect Dec. 1 and will expire at the end of 1998.

    The trade pact has its genesis in a memorandum of understanding first unveiled with great fanfare in February 1996. But innumerable delays in moving to a formal agreement - and squabbles over the fine print - led De Beers to cease purchasing gems through ARS at the end of last year.

    [12] SmithKline Beecham profit gains just 3% in third quarter as strong pound damps growth

    SmithKline Beecham posted a small rise in profit in the third quarter, helped by a sharp rise in new-drug sales, and said it remains on track for double-digit profit growth in the full year.

    The Anglo-American health-care company's profit would have been higher but for a 42-million-pound loss linked to the strong pound's impact on overseas earnings.

    Pretax profit before exceptional items rose 2.9% on the year to 385 million in the third quarter, SmithKline said Tuesday. Excluding exchange- rate movements, earnings rose 14% to 427 million. In the first nine months of 1997, earnings rose 5.5% to 1.16 billion.

    SmithKline said it will pay a dividend of 2.2 pence a share, compared with 4.0 pence a year ago. The latest payout actually represents a year-on-year increase because it follows a 2-for-1 stock split in August.

    Analysts said the results were in line with expectations, although the impact of exchange-rate movements exceeded some forecasts. Robin Gilbert, an analyst at brokerage firm Panmure Gordon, said he won't be altering his forecasts or recommendations on the stock.

    'It's just steady as she goes, really,' he said. 'A lot of the trends we're seeing have been evident for the last several quarters, so there aren't too many surprises.'

    SmithKline Chief Executive Jan Leschly said at a media briefing that he expects the fourth quarter to be 'tough' compared to last year, but also insisted that his forecast of double-digit profit growth for the full year remains intact. He also predicted that sterling's strength will knock about 8% off full-year earnings.

    Leschly said third-quarter earnings were underpinned by the 'outstanding success' of the company's pharmaceuticals business. Sales of new drug products jumped 41% to 420 million GBP, and overall drug sales rose 7% to 1.12 billion.

    Key products included Seroxat/Paxil, a serotonin reuptake inhibitor, which posted a 36% rise in sales to 236 million. Its share of the US prescription market rose to 22.5% from 20.7% a year earlier. Sales of antibiotic Augmentin climbed 16% to 196 million, while Kytril, an anti- vomiting drug for cancer patients, booked a 25% rise in sales to 53 million.

    Total vaccine sales climbed 33% to 192 million.

    [13] Harrisons & Crosfield starts revamp, sells Harcros

    Harrisons & Crosfield began its long-hoped-for restructuring programme with the decision to sell its Harcros building merchants division to Meyer International for 318 million ($520 million).

    Following completion of the sale, the British building materials and animal feed group intends to return some 359 million in 'surplus capital' to shareholders, amounting to at least 50 pence a share, and said it would be renamed Elementis from January 1998.

    The UK company also plans to sell its remaining non-chemical businesses and is already in talks over the possible disposal of its food and agriculture operations. The announcement, which follows a five-month review of its operations, will transform Harrisons & Crosfield into a specialised chemicals company. Expansion in this sector will be 'aggressively pursued,' the company said.

    Harrisons' chief executive Bill Turcan said the sale was a major step towards achieving focus on its chemicals business which had operating profit of 55.9 million last year on total sales of 592.5 million.

    'We are moving towards running a smaller number of businesses rather than a more diversified (operation),' Turcan said. He said the group was working on further sale of its food and agricultural business from which analysts estimate Harrison could get around 235 million.

    A source close to the company said the company could also wait, improve the businesses and sell them at a higher price. Turcan said the company made a gain of 173.8 million on the Harcros disposal, before taking transaction costs, write back of goodwill and tax into account. Harrisons would make a net profit of 65.7 million on the sale. Turcan said the company's future would be around its performance chemicals business and it would especially develop further its coatings and plastics divisions. An analyst said the company's decision to focus on chemicals was underlined by the appointment of Mike Parker who joined as executive director responsible for chemicals from Zeneca .

    The Harcros purchase, with 211 outlets, will transform Meyer, the owner of UK's over 200 Jewson's stores, making it the country's biggest chain of builders' merchants. The combination will now overtake Travis Perkins and Graham Group Plc in terms of market share.

    Meyer said it expected to close down less than 20 out of a total 414 outlets and said the combination would improve Jewson's margins over the next three financial years. Meyer expects to achieve purchasing benefits of 10 million per year in two years. The group said its pre-tax profits for the six month period to September 30, 1997 was not less than 26 million, against 20.3 million in the previous year. A part of the acquisition would be funded through a one-for-four rights issue expected to raise 111.7 million, net of expenses at 360p per shares. Meyer shares eased five pence to 405.

    Meyer said it was also planning to sell its panel and softwood businesses from its timber products division, without giving price details.

    [14] Wolseley full-year earnings rise 8.8% to $430 million

    Building materials group Wolseley reported an 8.8% rise in its full year profits to 264.2 million ($430 million).

    The earnings were in line with market predictions, but were marred by sterling's strength, which cut sales by 233.7 million and trading profit by 13.1 million.

    It also reduced the interest charge by around 1.8 million.

    'The strong pound reduced our trading profits by some 5%, due to currency translation, and trading and economic conditions were generally unhelpful in continental Europe,' the company said.

    Wolseley is recommending a final dividend of 8.10 pence, up from 7.25 pence a year earlier. The rise pushes the year's total payout to 11.4 pence from 10.35 pence per share, broadly in line with analyst's expectations.

    Earnings per share grew to 31.07 pence from 29.16 pence per share in the previous year.

    The U.K. distribution business continued to benefit from a gradual improvement in market conditions.

    'Whilst the markets in the south have been considerably more robust, elsewhere the recovery has been patchy and fragile,' the company said.

    However further interest rate rise could soften consumer demand.

    Meanwhile, difficult economic conditions in France and Austria have resulted in weak trading conditions throughout the year, and this is 'likely to be little changed,' the company warned.

    [15] Corporate and Economic Briefs

    Apple Computer Claris unit reported fourth-quarter revenue of $91.1 million compared with $56.6 million a year ago. In a press release Claris said revenues for the quarter ended Sept. 26 were its highest-ever quarterly revenue. The unit's revenue for the year was $281.7 million, its highest annual figure ever and an increase of 19% from $236.2 million last year. Claris credited its record quarterly revenue largely to sales of Mac OS 8, the new Macintosh operating system which Claris sells. Sales of Mac OS 8 in the first two months already make it the best-selling new Mac operating system software in history.

    Nabisco Holdings reported third-quarter profit rose 31% because of gains in its core snack categories, improved productivity at its US Biscuit unit and a year-earlier restructuring charge. The food company, whose products include Ritz crackers, Oreo cookies and Planters peanuts, said net income climbed to $92 million, or 34 cents a share, from $70 million, or 26 cents a share, a year earlier. The 1996 quarter included a charge of $10 million, or four cents a share, for restructuring. Sales slipped 1.6% to $2.20 billion from $2.24 billion. Operating profit rose 17% to $244 million from $208 million. Nabisco is 80.5%-owned by food and tobacco giant RJR Nabisco Holdings.

    Swedish investment group Investor said it will sell its stake in Swedish TV-station TV4 AB to the Finnish media group Aamulehti-yhtymae Oy and TV- company MTV-yhtymae Oy for 710 million kronor ($93 million). Investor will make a capital gain of 437 million kronor from the sale, which involves 4, 301,830 shares, representing 21.5% of the capital and the votes in TV4. 'TV4 will have greater opportunities to develop in the future under the new ownership and with the proximity to MTV, Finland's largest commercial TV- channel,' said Claes Dahlbaeck, chief executive officer of Investor, in a written statement.

    The Spanish industrial production index rose 7.4% in August from the same month a year earlier, the national statistics institute said. However, the index fell 40% from July. In Spain, many factories close during August.

    Austria's Mayr Melnhof Karton, Europe's largest producer of packaging cardboard, reported sales for the third quarter of 1997 at 8.47 billion Austrian schillings, up 7.1% over 1996. The sales resulted in a net profit for the nine month period January to September of 495 million schillings, an increase of 41% over the same period the previous year. The company said the growth was primarily in the box and packaging division, and forecast stable raw materials prices and high order volume would allow continued efficient use of equipment and high margins.

    [16] Sports Update from The Big Game

    Wild card Andre Agassi suffered a 6-4 6-4 defeat to Todd Martin in the opening of the EuroCard in Stuttgart.

    Swedish midfielder Joakim Persson is set to leave Italian club Atalanta and sign a three-year contract with IFK Gothenburg after his failure to secure a place in the Atalanta team.

    England's campaign to host the 2006 World Cup was lifted by a 3 million award to the Football association from the English Sports Council.

    Swimmers heading for the World Championships in Perth in January may be tested for drugs after outstanding performances by the Chinese swimmers at their country's National Games in Shanghai last week.

    England scrum half Kyran Bracken is being urged to tale a civil action against French opponent Arnaud Racine whose alleged brutality leaves a hefty dental bill.

    From the European Business News (EBN) Server at

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