In a move signaling an effort to mend the troubled Japanese banking system, Sanwa Bank California and Tokai Bank of California have agreed to a merger that would create a new institution, United California Bank, with $12 billion in assets.
The consolidation is part of the planned merger of the banks’ parent corporations, Sanwa Bank Ltd. and Tokai Bank Ltd., which are combining with Toyo Trust & Banking Co. to create a $780 billion institution called UFJ Holdings Inc.
If given regulatory approval, the merger of the California banks is expected to be completed in early 2002.
A Sanwa official said no layoffs or branch consolidations are immediately planned. Los Angeles-based Sanwa has 3,000 employees, 108 branches and assets of $9.3 billion. It is the third largest among banks headquartered in California, after Wells Fargo and Union Bank.
Tokai, with 15 offices located mainly in Los Angeles, has 400 employees and assets of $1.9 billion.
China Deal for Nickelodeon
In its second deal to deliver first-run content to China, Viacom Inc. has signed a landmark agreement to launch Nickelodeon in 40 million Chinese households starting in May.
Viacom received government approval to sign an agreement with Tang Long, a Chinese production company, to co-produce local Chinese Nickelodeon children’s programming for 100 cable and television distributors in the country. Viacom said Nickelodeon will grow from an initial half-hour of programming.
Most U.S. programming is available only in hotels and embassies in China, and the selection is at the discretion of government officials. Time Warner’s Cartoon Network was thrown out of China last year. The company speculated that the move was in retaliation for unfavorable coverage by sister company CNN.
Under a 3-year-old pact, Viacom is already bringing MTV to 54 million households in China, the world’s largest television market based on the 300 million homes with TV sets, three times as many as in the United States.
New Stations for Entravision
Entravision Communications Corp. said it would launch Spanish-language television stations in Santa Barbara and Tampa, Fla., as it extends its reach to growing Latino markets nationwide.
Santa Barbara’s Latino population has grown by at least 64 percent since 1990 and is expected to constitute a third of the city’s total by 2005.
Santa Monica-based Entravision is the largest affiliate of Univision Communications Inc., an Entravision investor that operates the country’s top-rated Spanish-language broadcasting network. Entravision also operates a Spanish-language radio network serving 23 markets through 47 affiliates and 57 owned-and-operated radio stations.
The new stations bring Entravision into 22 of the country’s top 50 Latino markets.
The news comes on the heels of a company announcement earlier this month of first-quarter financial shortfalls due to weak advertising sales.
XOXO Settles With Garment Workers
For the second time in less than a year, Commerce-based XOXO Clothing Co. has agreed to pay back wages to garment workers who were employed by one of its contractors.
The decision comes after a Labor Department investigation found that Martinez & Sons Sportswear, a now-defunct Los Angeles contractor that sewed apparel for the popular young women’s clothing label, had failed to pay wages for work performed from July through September. XOXO agreed to pay 23 workers $17,433, as well as not to ship or sell goods produced in violation of wage and hour laws.
Under federal law, garment manufacturers are responsible for ensuring that their contractors’ employees are properly paid. A dozen other garment workers sued XOXO in November claiming that Martinez & Sons stiffed them for more than two months’ wages. XOXO agreed to pay them $62,000 in back wages.
Since 1997, XOXO has been cited nine times for labor law violations committed by its contractors, according to the Labor Department.
L.A. Budget Surplus
Los Angeles city officials are projecting a $70 million surplus for the fiscal year ending June 30 as a result of an unexpected surge in tax revenue from the steep rise in natural gas bills.
City officials said a still strong local economy combined with nearly $19 million in natural gas tax revenue, 42 percent more than was projected, is responsible for the extra dollars in the city budget.
Revenue from the city tax on electric bills has remained steady, reflecting the advantage that customers of the Department of Water and Power have had over those elsewhere, who are facing sharp price hikes.
L.A. Newspaper Group Bought
The Los Angeles Independent Newspaper Group and its chain of five free local newspapers have agreed to be purchased by Houston-based Equal Access Media Inc.
Equal Access, which publishes 13 local weeklies under the auspices of Wave Community Newspapers Inc., will acquire the group from Los Angeles-based National Media Inc., officials said. The papers include the Los Angeles Independent, Hollywood Independent, Wilshire Independent, West Hollywood Independent and the Westsider, all free weekly publications distributed each Wednesday.
Officials said no layoffs or major changes were planned at the community newspapers.
Zacky Selling to Rival
El Monte-based Zacky Farms will be purchased by Foster Farms, its chief rival and the state’s largest chicken producer.
Terms of the deal were not disclosed but Zacky Farms President Robert Zacky said his family agreed to sell its chicken business, founded 72 years ago, to pay off inheritance taxes his family would soon owe after the death of his brother Al.
Zacky officials said the company would continue to produce turkeys and provide feed for farms in the Central Valley. The company will move to a new headquarters somewhere near El Monte.
The deal, which would add $250 million to Livingston-based Foster’s $1 billion in annual sales, is expected to give the company a dominant position in the poultry aisles of California supermarkets and could be subject to intense antitrust scrutiny.
Local Franchises Sue Shakey’s
Sterling Foods Inc., a Los Angeles-based franchisee, has filed suit and is seeking more than $5 million from Shakey’s Inc., alleging breach of contract and accounting fraud.
In a suit filed in Los Angeles Superior Court, Sterling Foods, which owns five Shakey’s pizza parlors in Southern California, claims that the chain, now based in Singapore, has refused to renew its franchise contract as specified in its agreement and says it won’t provide an accounting of how franchisee funds have been used.
Sterling is seeking an order allowing it to leave the system, as well as damages. Shakey’s reached a peak of about 500 restaurants in the 1970s, but has since dwindled to just 73 in the United States, according to the complaint.
An official with the Shakey’s Franchised Dealers Association claims that franchisees have been abandoned by Shakey’s management, which has failed to provide even minimal franchise services.
Unocal Licensing Fuel Patents
Fresh off its victory in federal court, El-Segundo-based Unocal Corp. said that it would sell a uniform license to oil refiners that want to produce cleaner-burning gasoline based on its patents.
The licenses will add less than a penny per gallon to the cost of reformulated gasoline, officials said.
The U.S. Supreme Court last month let Unocal’s patents stand, allowing the company to keep $91 million in damages paid by refiners. The patents cover gasoline that meets standards set by California and federal regulators.
Unocal has patented five cleaner-burning gasoline formulas since 1994 and offered to negotiate licenses. But some of the company’s biggest rivals, including Exxon Mobil Corp. and Chevron Corp., sued in Los Angeles, contending that the patent was invalid. Unocal filed a counterclaim, and a jury awarded it damages. Only companies that had not challenged the patents in court will get them, Unocal officials said.
Litton Sale Completed
Northrop Grumman Corp. completed its $3.8 billion acquisition of former rival Litton Industries Inc.
Los Angeles-based Northrop, the fifth-largest U.S. defense contractor, agreed to purchase Woodland Hills-based Litton in December to expand its sales of electronic systems for warships and military aircraft.
The European Commission, which can block or change buyouts of companies with combined sales of $4.7 billion, approved the transaction in March.
Bugle Boy Liquidation Underway
The owner of a Midwestern department store chain has purchased the wholesale operations of Bugle Boy Industries Inc. for $68.6 million, beating out two rival bidders in a court-approved liquidation of the troubled Simi Valley sportswear manufacturer.
A bankruptcy judge approved the sale to Columbus, Ohio-based Schottenstein Stores Corp., Bugle Boy officials confirmed.
Two Florida-based clothing companies Perry Ellis International Inc. and Tropical Sportswear International Corp. also had competed to purchase Bugle Boy’s wholesale and licensing operations. But officials said that Schottenstein prevailed after 22 rounds of bidding that pushed the final purchase price above $54 million.
Schottenstein will acquire Bugle Boy’s trademarks, inventory and accounts receivable, as well as rights to license the brand.
