Daily Briefing

AUTOMOTIVE

GM still bullish on Russia, Europe

Zurich, Switzerland —- General Motors Corp. is still looking to Russia and Eastern Europe for long-term growth to offset slackening demand in established markets despite international tension over Georgia, the president of GM Europe says. Carl-Peter Forster said in an interview that sales growth in the region could moderate from the near 30 percent currently, but that GM could still expect annual increases of at least 10 percent. The total market for the region is around 4 million vehicles but could jump to 5 million to 6 million in the next three to five years, according to Forster.

DEALS

Severstal to buy Pa. steel maker

Somerset, Pa. —- Russian steel maker OAO Severstal on Friday announced plans to buy Pennsylvania’s PBS Coals for about $1.3 billion in cash. Severstal will buy PBS by purchasing a public company, PBS Coals Ltd., that will be created when Penfold Capital Acquisition Corp. buys PBS, the steel maker said. The boards of PBS and Penfold support the deal. PBS mines, processes and sells coal in Somerset County, about 60 miles southeast of Pittsburgh. It operates six underground and six surface mines near Severstal’s North American production centers.

Insurance broker Aon to expand

Aon Corp., the world’s biggest insurance broker, has agreed to buy London-based Benfield Group Ltd. for 844 million pounds ($1.6 billion). The companies, which settled a legal dispute a year and a half ago, said their boards support the takeover and declined to discuss the possibility of a higher bid. “The managements have agreed to the deal, so it doesn’t make a lot of sense for anyone else to come in,” said Charles Coyne, an analyst at KBC Peel Hunt Ltd. in London. “It’s a knockout offer, so everyone is happy. The companies know each other very well.”

FINANCIAL

Merrill strikes auction-rate deal

Washington —- Federal regulators say Merrill Lynch & Co. will buy back up to $7 billion in auction-rate securities over its role in selling the risky bonds to retail investors. Merrill’s preliminary agreement with the Securities and Exchange Commission comes a day after the largest U.S. brokerage agreed with state regulators to hasten its voluntary buyback plan by repurchasing $10 billion to $12 billion of the securities from investors by Jan. 2.

Regulators close Kansas bank

Washington —- Federal regulators on Friday shut down Kansas bank Columbian Bank and Trust Co. The Federal Deposit Insurance Corp. was appointed receiver of Columbian Bank of Topeka, Kan. The FDIC said the bank’s deposits will be assumed by Citizens Bank and Trust of Chillicothe, Mo. Its nine offices will reopen Monday as branches of Citizens Bank. Depositors of Columbian Bank will continue to have full access to their deposits, the agency said. It was the ninth failure this year of an FDIC-insured bank. That compares with three failures in all of 2007. More banks are in danger of failing this year, agency officials have said. The FDIC estimated the resolution of Columbian Bank situation will cost the deposit insurance fund around $60 million. Regular deposit accounts are insured up to $100,000. There were about $46 million in deposits held in 610 accounts at Columbian Bank that potentially exceeded the insurance limit, the FDIC said.

FOOD / BEVERAGE

InBev confident of Anheuser deal

Brasilia, Brazil —- The head of Belgian-Brazilian brewer InBev SA said Friday that he’s confident his company’s takeover of Anheuser-Busch will be cleared by U.S. regulators by the end of the year. Chief Executive Carlos Brito said the maker of Stella Artois, Beck’s and Bass has long admired the Anheuser-Busch brand, known for Budweiser and Bud Light. St. Louis-based Anheuser-Busch Cos. Inc. announced last month that it had agreed to be sold to InBev for $52 billion. “It is a transaction that was negotiated,” Brito told reporters after meeting with Brazilian President Luiz Inacio Lula da Silva. “It was agreed upon. It was friendly. We already knew the leaders of this company for many years. We admire the brand that they built, and we saw a large potential for this brand in many countries.”

Nestle recalls frozen product

Nestle SA, the world’s largest food company, recalled about 215,660 pounds of frozen stuffed pepperoni pizza sandwich products that may contain foreign materials. Nestle Prepared Foods Co., a unit based in Mount Sterling, Ky., recalled 12-pack cartons of Hot Pockets Pepperoni Pizzas that were produced on June 5, the U.S. Department of Agriculture’s Food Safety and Inspection Service said Friday. The company was notified of the problem by consumers and the foreign material wasn’t identified, according to a statement.

REGULATORY

Court affirms Sarbanes-Oxley

Washington —- A federal appeals court on Friday denied a constitutional challenge to a 2002 anti-fraud law that created a board to oversee the accounting industry after a wave of business scandals. The 2-1 ruling by a panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected the argument by the Free Enterprise Fund that the industry oversight board established by the Sarbanes-Oxley law violates the Constitution’s mandated separation of powers among the three federal branches. The pro-business group has argued that the Public Company Accounting Oversight Board —- endowed with subpoena power and the authority to discipline accountants —- breaches the separation-of-powers requirement because its five members aren’t appointed by the president, cannot be removed by him, and Congress does not control the board’s budget.

Cadaver exhibitor’s chief resigns

Premier Exhibitions Inc., which settled a probe by New York’s attorney general over the cadavers in its “Bodies … The Exhibition,” said Chief Executive Bruce Eskowitz resigned as part of a restructuring. Brian Wainger also quit as chief legal counsel, the Atlanta-based company said in a filing with the Securities and Exchange Commission. Also, James S. Yaffe and Jonathan F. Miller have resigned as directors, the filing said.

RETAILING

Lowe’s elects lead director

Lowe’s Cos., the world’s second-largest home improvement retailer, said Friday that O. Temple Sloan was elected to the new position of lead director as part of a move to improve its policies. The board also allowed investors holding greater than 50 percent of the company’s outstanding voting shares to call a special meeting of shareholders, the company said Friday in a statement. Those serving as a Lowe’s director would be limited to being part of a maximum of five other public company boards.

TECHNOLOGY

Critics say China blocked iTunes

Beijing —- Customers in China of Apple Inc.’s iTunes online music store were unable to download songs this week, and an activist group said Beijing was trying to block access to a new Tibet-themed album. In Internet forums, iTunes users complained they had been unable to download music since Monday. That was a day after the Art of Peace Foundation announced the release of “Songs for Tibet,” with music by Sting, Alanis Morissette, Garbage and others, and a 15-minute talk by the Dalai Lama, the exiled Tibetan leader. Michael Wohl, executive director of the New York-based group, said he believed the album was the reason for the iTunes interruption, though he had no proof. “We issued a release saying that over 40 [Olympic] athletes downloaded the album in an act of solidarity, and that’s what triggered it. Then everything got blocked,” Wohl said by phone. Beijing encourages Internet use for education and business use but tries to block access to foreign sites run by dissidents and Tibet activists.

Canada examines Google-Yahoo deal

Google Inc. and Yahoo Inc., the most popular search engines, face a review from Canada’s competition watchdog of their proposed advertising partnership. “It’s a sizable agreement, and we’re going to take a close, hard look at it,” Anthony Durocher, a senior competition law officer with the Competition Bureau, said Friday in an interview. The companies, which also are trying to persuade U.S. regulators to approve the agreement, want to start the partnership by October.

TELECOM

Embarq Corp. to eliminate jobs

Telecommunications provider Embarq Corp. said Friday that it is cutting between 500 and 700 jobs and eliminating around 300 contract positions as it deals with a continued loss of telephone customers. The Overland Park, Kan.-based company said the job cuts will all come from its Network Services organization, which installs and maintains its network. The proposed company job cuts would amount to 3 percent to 4 percent of Embarq’s work force or more than 17,000. Embarq, the nation’s fourth-largest traditional telephone company with service in 18 states, has experienced a double whammy as more customers are dropping wireline phones for wireless and Internet telephone services while the slowdown in new housing is reducing the number of new customers.

TRANSPORTATION

Labor Day travel projected to drop

Travel during the Labor Day holiday weekend will decline about 1 percent from a year earlier because of the slowing economy and higher fuel prices, according to AAA, the biggest U.S. motorist group. About 34.4 million people will travel at least 50 miles from home during the Aug. 29-Sept. 1 period, AAA said Friday in a statement in Washington. That would be down from 34.7 million last year, for the first decline since 2006, the group said. Of those traveling, 28.6 million people, or 83 percent, will do their traveling by automobile, AAA said.

WORKPLACE

Goodyear wins OK for health trust

Goodyear Tire & Rubber Co., the largest U.S. tire maker, won federal court approval for its plan to create a health care trust for union retirees. Goodyear said it will make a one-time, $1 billion payment to the United Steelworkers union fund to cover future costs. The payment will be made initially from existing cash reserves and available credit lines, the Akron, Ohio-based company said in a statement Friday. Creation of the Voluntary Employees’ Beneficiary Association will result in annual savings of about $100 million and boost cash flow by about $130 million compared with 2007, Goodyear said.