Fiat Industrial and CNH reach merger agreement

MILAN — The Italian heavy-duty vehicles maker Fiat Industrial reached an agreement Monday for a full merger with its U.S. subsidiary, the farm equipment maker CNH Global N.V., creating the world's third-largest capital goods company by sales.

Fiat Industrial had aggressively pursued the full merger of the 12 percent of CNH that it didn't already own, making a pitch in the spring and then raising the value of the offer by more than 25 percent last week after CNH advisers refused to endorse the deal.

Fiat Industrial earlier this month had streamlined the management structure to better integrate the two companies, placing the head of CNH, Richard Tobin, as group chief operating officer, second in command to Chairman Sergio Marchionne, who also runs the Fiat and Chrysler car companies.

"Completion of this merger will bring to a conclusion a lengthy process of simplifying and rationalizing the Group's equity capital structure," Marchionne said in a statement issued jointly by the two companies.

The new company, which has yet to be named, will be based in the Netherlands and listed on the New York Stock Exchange. The merger is expected to close in the second quarter of next year, the companies said.

It will be the third largest capital goods company by sales, after Caterpillar and Volvo. Marchionne said the new company would be "a true peer in scale and capital markets appeal to the other major capital goods companies."

The deal is based on Fiat Industrial's sweetened offer, including a cash dividend of $10 per CNH share prior to the completion of the merger. Each CNH shareholder would receive 3.828 shares of the merged company, while each Fiat Industrial shareholder would receive one share.

Fiat Industrial shares fell 2 percent to €8.33 on the Milan exchange Monday.

Besides CNH, Fiat Industrial, based in the northern Italian city of Turin, comprises IVECO truck and heavy vehicle company and FPT Industrial powertrains. CNH, which is based in the Chicago suburb of Burr Ridge, Illinois, sells farm and construction equipment under the Case and New Holland brands in 170 countries.

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Supreme Court orders new look at health care challenge

WASHINGTON — The Supreme Court has revived a Christian college's challenge to President Barack Obama's healthcare overhaul, with the acquiescence of the Obama administration.

The court on Monday ordered the federal appeals court in Richmond, Va., to consider the claim by Liberty University in Lynchburg, Va., that Obama's health care law violates the school's religious freedoms.

A federal district judge rejected Liberty's claims, and the 4th U.S. Circuit Court of Appeals ruled that the lawsuit was premature and never dealt with the substance of the school's arguments. The Supreme Court upheld the health care law in June.

The justices used lawsuits filed by 26 states and the National Federation of Independent Business to uphold the health care law by a 5-4 vote, then rejected all other pending appeals, including Liberty's.

The school made a new filing with the court over the summer to argue that its claims should be fully evaluated in light of the high court decision. The administration said it did not oppose Liberty's request.

Liberty is challenging both the requirement that most individuals obtain health insurance or pay a penalty, and a separate provision requiring many employers to offer health insurance to their workers.

The appeals court could ask the government and the college for new legal briefs to assess the effect of the Supreme Court ruling on Liberty's claims before rendering a decision.

Liberty's case joins dozens of other pending lawsuits over health reform, many involving the requirement that employer insurance plans cover contraception, which are working their way through the federal court system.

The case is Liberty University v. Geithner, 11-438.

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Fiscal cliff quarrels keep US stocks in check

The stock market edged lower Monday morning, pulled down by old worries about the debt crisis in Europe and a political standoff over taxes and spending in the U.S.

In early trading, the Dow Jones industrial average was down 66 points at 12,945. The Standard & Poor's 500 was down 6 to 1,403. The Nasdaq composite index slipped less than a point, to 2,966.

Monday was the first trading day after the beginning of the holiday shopping season, a crucial time for retailers that rely on Christmas shopping to make up for shortfalls during the rest of the year. But the impact of Thanksgiving Day, Black Friday and the rest of the weekend was hard to read.

The National Retail Federation reported that 247 million shoppers visited stores and shopping websites during the Thanksgiving holiday, up 9 percent from a year ago. They spent an average of $423, up 6 percent.

Still, retailers worry that the momentum won't last. Retailers like Macy's, Target and Saks were down in early trading.

One major reason is the overhang of the "fiscal cliff." That's when both higher taxes and cuts to government programs, like unemployment benefits and Social Security, will kick in at the end of the year unless Congress and the White House work out a compromise before then.

A government report released Monday warned that a sudden increase in taxes would result in lower consumer spending next year, and some analysts wondered if the concerns about what could happen might crimp spending throughout the rest of the holiday season.

The report, by President Barack Obama's National Economic Council and his Council of Economic Advisers, estimated that a married couple earning between $50,000 and $85,000 with two children would see a $2,200 increase in their taxes.

The White House wants to raise some taxes, but key business groups have protested vehemently. The homebuilding industry says it won't stand for even small cuts to the mortgage interest deduction, a tax break that's meant to encourage homeownership. AARP has publicly lobbied against cuts to Medicare and Social Security.

To be sure, the fiscal cliff fighting could be mostly grandstanding for lawmakers. Lawmakers often fight over budget issues until the dramatic 11th hour, then work out a compromise at the last moment.

Overall, Monday morning was quiet, with no major economic reports due in the U.S. and no major companies scheduled to make big announcements. In Europe, leaders of European Union countries tried to hammer out a deal to lend more money to debt-crippled Greece, but many analysts have come to view that as another tired theme that has already been baked into the markets.

Count David Kelly, chief global strategist at JPMorgan Funds, among the underwhelmed.

"The themes seem about as recycled as Thanksgiving turkey," Kelly wrote in a note to clients, referring to the fiscal cliff and the European debt crisis. He expected a better read on the economy later this week, with reports on consumer confidence on Tuesday, and unemployment claims and third-quarter economic growth on Thursday.

Sam Stovall, chief equity strategist at S&P Capital IQ, was similarly unmoved. "Most of these uncertainties have been with us for quite some time," he wrote in a note, "and are now regarded by many as annoyances to resolve rather than obstacles to fear."

Overall, the U.S. economy has been hard to read. For every sign that it is improving, there's another that indicates it's not. The market jumped 421 points last week, one of the best weeks of the year. It was down for four straight weeks beforehand.

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Supreme Court won't get into fight over grape patents

WASHINGTON — The Supreme Court won't hear an appeal from a California table grape organization over a lawsuit seeking to invalidate several government table grape patents.

The high court on Monday refused to hear an appeal from the California Table Grape Commission, which is fighting to keep in place patents on Sweet Scarlet, Autumn King and Scarlet Royal varieties of table grapes.

Delano Farms Co. and other farms say the patents are invalid, and won a lower court decision that would allow them to go to court to fight their case. The commission wants that case thrown out, but the U.S. Court of Appeals for the Federal Circuit disagreed.

The case now goes back to the lower courts.

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Warren Buffett urges Congress to raise taxes on wealthy

OMAHA, Neb. — Billionaire Warren Buffett is again calling for higher taxes on the "ultra-rich" and he's urging Congress to compromise on spending cuts and tax increases.

Buffett expressed his views on fiscal policy in an opinion article Monday in The New York Times [NYT].

In the article, Buffett mocked the idea that investors would pull back if capital gains taxes increase. Buffett says he's never seen that happen.

The head of the conglomerate Berkshire Hathaway Inc. reiterated his call for a minimum tax of 30 percent on income between $1 million and $10 million, and a 35 percent rate for income above that.

Buffett says both Republicans and Democrats will have to make major concessions to put the nation on a fiscally sound path, but he says Americans won't accept anything less.

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NYSE warns iParty over low stock price

Party goods retailer iParty Corp. said today it has received a compliance notice from the New York Stock Exchange due to the Dedham-based company's low selling stock price for a substantial period of time.

The NYSE said iParty's continued listing is predicated on it executing a reverse stock split of its common stock within a reasonable period of time, which the exchange has determined to be no later than May 20, 2013. If iParty does not complete a reverse stock split prior to that time, it could become subject to delisting procedures.

Company shares have been trading between 11 cents and 25 cents for the past year.

Earlier this month, the company disclosed it formed a special committee of the independent members of the board of directors and retained James & Associates Inc. to assist the retailer in exploring a broad range of financial and strategic alternatives to enhance shareholder value.

Additionally, at iParty's 2012 annual meeting, company stockholders approved an amendment to iParty's restated certificate of incorporation to effect a reverse stock split, pursuant to which the existing shares of iParty's common stock would be combined into new shares of iParty common stock at an exchange ratio ranging between one-for-five and one-for-20, to be determined by the board of directors.

At this time, no decision has been made to engage in a financing or strategic transaction and the special committee has not set a definitive timetable for this review process, the company said, adding that given the ongoing review process, the board has made no determination to effect the reverse stock split.

The company has 54 stores in New England and Florida and an e-commerce site. Due at least in part to Hurricane Sandy hitting two days before Halloween, iParty's October sales fell 6.5 percent to $16.4 million. The company last month reported a $3.31 million loss for the nine months ended Sept. 29.

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Google buys Wi-Fi provider ICOA for $400 million

NEW YORK — Google has bought an operator of Wi-Fi hotspots in high-traffic locations such as airports, hotels and fast-food restaurants.

Google Inc. is paying $400 million for ICOA Inc., a Warwick, R.I., company, as part of the search company's efforts to diversify its portfolio.

ICOA owns or operates Wi-Fi wireless access services in 40 states. It also sells technology for others to run similar Wi-Fi networks under their own brands.

It's not Google's first venture into Internet access. The Mountain View, Calif., company is building an ultra-fast wired Internet service in Kansas City, primarily to showcase for what's technically possible and to test new ways to use the Internet.

Shares of Google fell $6.07, or 0.9 percent, to $661.90 in morning trading Monday.

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Mary Schapiro stepping down after leading SEC in crisis

WASHINGTON — Mary Schapiro is stepping down as chairman of the Securities and Exchange Commission after helping lead the Obama administration's regulatory response to the 2008 financial crisis.

The SEC says Schapiro will leave on Dec. 14. She was appointed by President Barack Obama in the midst of the worst financial crisis since the Great Depression. She took over after the agency failed to detect the Bernard Madoff Ponzi scheme.

Schapiro is credited with helping reshaping the agency during a tumultuous period. But critics say she failed to act aggressively to bring charges against leading figures who contributed to the financial crisis.

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UK picks Canadian to lead Bank of England

LONDON — The British government has chosen the head of Canada's central bank to become governor of the Bank of England effective July 1.

Treasury chief George Osborne announced the surprise choice of Mark Carney to the House of Commons on Monday.

The new governor will be responsible for supervising the U.K.'s banking industry as well as setting the country's main interest rate. It is the first time someone who isn't British has been selected to lead the U.K.'s monetary authority.

Carney will succeed the current governor, Mervyn King, when his term ends next year. The Canadian had been speculated as a possible choice but was not considered a front-runner.

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Ranbaxy recalls generic Lipitor doses

TRENTON, N.J. — Ranbaxy Pharmaceuticals Inc. has recalled dozens of lots of its generic version of cholesterol drug Lipitor because some may contain tiny glass particles, the latest in a string of manufacturing deficiencies that once led U.S. regulators to bar imports of the Indian company's medicines.

Ranbaxy, a subsidiary of Ranbaxy Laboratories Ltd., India's biggest drugmaker, is operating under increased scrutiny from the U.S. Food and Drug Administration because of quality lapses at multiple Ranbaxy factories over the past several years. The FDA also has alleged the company lied about test results for more than two dozen of its generic drugs several years ago.

On Friday, Ranbaxy posted a notice on its U.S. website, saying it's recalling 10-, 20- and 40-milligram doses of tablets of atorvastatin calcium. That's generic Lipitor, the cholesterol fighter that reigned for years as the world's top-selling drug.

The recall includes 41 lots of the drug, nearly all with 90 pills per bottle, but three lots contain 500 pills per bottle. It's unclear how many bottles are in each lot, but medicine batches typically contain many thousands of pills. The 80-milligram strength tablets are not affected.

Ranbaxy spokesman Chuck Caprariello did not answer questions or provide any additional information beyond the statement on the company's website.

"Ranbaxy is proactively recalling the drug product lots out of an abundance of caution," the website statement read. "This recall is being conducted with the full knowledge of the U.S. FDA."

The company also filed a two-sentence statement with the Bombay Stock Exchange stating Ranbaxy's investigation would be completed within two weeks, but that after that temporary disruption to the U.S. supply, the company expected to resume shipments here.

Patients who've filled a prescription can contact their pharmacy to determine whether it was made by Ranbaxy or another generic drugmaker and, if it's from Ranbaxy, whether it came from a recalled lot.

Ranbaxy's manufacturing deficiencies, dating to 2006, led to a lengthy investigation and sanctions by the FDA. During the probe, federal investigators found Ranbaxy didn't properly test the shelf life and other safety factors of its drugs and then lied about the results.

In mid-2008, the FDA barred Ranbaxy from shipping into the U.S more than 30 different drugs made at factories in India. Meanwhile, the U.S. Department of Justice demanded Ranbaxy turn over internal documents, alleging the company lied about ingredients and formulations of some medications.

In early 2009, the FDA said it would not consider any new applications from Ranbaxy to sell in the U.S. any products made at the troubled factories.

As FDA discussions with Ranbaxy continued, it appeared Ranbaxy would lose its shot at a revenue windfall when Lipitor's generic U.S. patent expired last Nov. 30. At the time, Lipitor brought in almost $8 billion a year in U.S. sales.

As often happens when patents first expire, for the first six months only one generic rival could compete with brand-name Lipitor. Ranbaxy had that right, although an authorized generic from Lipitor maker Pfizer Inc. and partner Watson Pharmaceuticals Inc. went on sale on Dec. 1. With competition so limited, the generic prices only declined a bit from brand-name drug's price of about $115 a month — until several other generics entered the market six months later.

The FDA finally ended the suspense, deciding just before midnight on Nov. 30 to let Ranbaxy sell generic Lipitor made at the company's Ohm Laboratories factory in central New Jersey. It was unclear Friday whether the recalled Ranbaxy pills were made there or elsewhere.

Meanwhile, Ranbaxy is operating under a settlement with the FDA, called a consent decree, signed on Dec. 20, 2011. It requires Ranbaxy to improve manufacturing procedures, ensure data on its products is accurate and undergo extra oversight and review by an independent third party for five years. Ranbaxy at the time set aside $500 million to cover potential criminal and civil liability stemming from the Justice Department investigation.

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