BUSINESS CONCENTRATES International industrial economies grow Economic recovery continues in almost all of the eight major industrial nations, but rates of growth vary widely, according to the Conference Board. The board's International Economic Scoreboard shows that, in terms of leading business cycle indexes (meant to project the future course of the economy), Australia leads the group with an 11% annual growth rate, followed by Japan, 8%; France, 5%; the U.S., Canada, and West Germany, each 4%; Italy, 3%; and the U.K., with a —1% rate. The group is growing at a composite rate of 5%.
Dow increasing Magma Power stake Dow Chemical will increase to 20% its ownership of Magma Power, a Los Angeles-based geothermal energy producer. Under the agreement reached between the two firms, Dow will buy 550,000 more shares of Magma by next August for $8.00 per share or the market price less 10%, whichever is lower at the time of purchase. (Shares were selling at $73/4 last week on the over-the-counter stock market.) Dow already holds 2.5 million, or 17%, of the development-stage firm's 14.9 million outstanding shares. Magma will use the $4.4 million maximum proceeds from the sale to upgrade its 10-MW geothermal power generating plant in East Mesa, Calif. Dow also gained an option to buy 450,000 more shares, at the same price, exercisable until the startup date of a 38-MW plant Magma is building in Niland, Calif. In addition, Dow received another option on 1 million more shares, at market price less 10% at the time of the purchase, exercisable for up to two years following the startup of the Niland facility. The agreement added two Dow executives to Magma's board of directors, bringing Dow's representation there to three.
Pickens bids to control Phillips Petroleum In a bid to gain control of Phillips Petroleum, an investment group led by Mesa Petroleum chairman T. Boone Pickens Jr. and Mesa Petroleum plans to offer $60 per share for at least 15 million shares, or nearly 10%, of Phillips. If financing is arranged, the group will buy an additional 8 million shares. The Pickens group already owns 8.8 million shares, or nearly 6% of the oil company's outstanding common stock. With a purchase of 23 million more shares, the group would hold nearly 21% of the company. In an announcement, Pickens, whose bid for Gulf earlier this year precipitated Chevron's acquisition of Gulf, said his ultimate goal was to acquire most or all of Phillips. At $60 per share, Phillips' 154.3 million shares would be worth more than $9 billion.
Du Pont, Whitehead in research pact In its first-ever such agreement with industry, Whitehead Institute for Biomedical Research has entered into a five-year, $4.5, million research pact to 16 December 10,1984 CAEN
fund biological research at the institute with Du Pont. The money will pay for certain research programs, core facilities, and the salaries of selected Whitehead personnel via the new Du Pont Center for Molecular Genetics, which will be established to dispense funds within the institute. David Baltimore, director of the Cambridge, Mass., institute, says that the research unit will retain full freedom to determine research directions, but that Du Pont will receive the right of first refusal on licensing when the corporation's funds are used to support a particular program. Since the agreement also encourages collaboration between Whitehead and Du Pont scientists, inventions from such joint work will be jointly owned. Baltimore also notes that the institute is free to publish the results of research performed under Du Pont sponsorship.
Texaco plans large charge to earnings In the face of overcapacity in the oil tanker business, the glut in oil refining, and reduced expectations for oil prices, Texaco is planning a $765 million charge to fourth-quarter earnings. Of the total charge, $350 million will come from the write-down of 17 oil tankers that have been used little in the recent past. Another $205 million will be accounted for by the write-down of some refinery values. The remaining $210 million charge relates to a reduction in the carrying values of certain oil and gas prospects around the world.
Akzo consolidates in North America Akzo, a large Dutch chemical firm, will combine its North American holdings into one company, Akzo America, headquartered in Enka, N.C. Combined 1984 sales of the now-separate firms are estimated at $1 billion, 20% of Akzo's worldwide sales. Merging to form the new company are Akzona (fibers, salt, leather, industrial membranes, and specialty, drug, and diagnostic chemicals), Diosynth (drug intermediates), Inter-Continental Biologies (poultry sera), and Akzo Coatings America (automotive coatings). Akzo president Aarnout A. Loudon says the integration and reorganization aims at consolidated financial strength, simplified management, geographical definition, and enhanced U.S. identity.
Business roundup • Morton Thiokol will significantly increase its capacity for sodium borohydride with construction of a major facility in Europe and doubling of capacity at its Elma, Wash., plant. Site of the European plant will be selected next year. Total investment will exceed $25 million. • Joseph D. Williams, 58, president and chief operating officer of Warner-Lambert, will assume the additional title of chief executive officer on Jan. 1. He succeeds Ward S. Hagan, who remains chairman of the board.
