Special Feature, 12/17/98: The 1998 Year In Review, Timeline

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'98 Year In Review
December 17, 1998

Fourth Quarter 1998

by Yi-Hsin Chang (TMF Puck)

October

06... Barnes & Noble <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BKS)") else Response.Write("(NYSE: BKS)") end if %> announces that German media giant Bertelsmann AG will pay $200 million for a 50% stake in the bookseller's online subsidiary, barnesandnoble.com, thus "temporarily" postponing the planned spin-off of the Internet bookstore. Both companies also agree to contribute $100 million each to the joint venture.

07... Boston Chicken <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BOSTQ)") else Response.Write("(Nasdaq: BOSTQ)") end if %> finally bites the Chapter 11 bankruptcy dust, which sends the company's shares down to $0.50 a pop from a 52-week high of close to $16.

09... The nation's second largest drug wholesaler, Cardinal Health <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAH)") else Response.Write("(NYSE: CAH)") end if %>, agrees to acquire healthcare products maker and distributor Allegiance Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AEH)") else Response.Write("(NYSE: AEH)") end if %> for about $5.4 billion in stock and assumed debt.

13... American Home Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AHP)") else Response.Write("(NYSE: AHP)") end if %> and Monsanto Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> agree to scrap their proposed merger "by mutual consent," ending the planned combination of a cash-flow rich pharmaceutical company with a pipeline-rich global life sciences company.

The nation's second-largest supermarket chain, Safeway Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SWY)") else Response.Write("(NYSE: SWY)") end if %>, says it will buy Dominick's Supermarkets <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DFF)") else Response.Write("(NYSE: DFF)") end if %> for $49 a share in cash, or around $1.2 billion plus $646.2 million in assumed debt.

15... The market gets a pleasant surprise when the Federal Reserve lowers the federal funds rate by a quarter percentage point to 5% and the discount rate for bank loans by a quarter point to 4.75%. It's the first time since April 1994 that the Fed has adjusted interest rates between official meetings of the Federal Open Market Committee (FOMC), which already cut the federal funds rate by 25 basis points when it met on September 29.

18... Barred from tying the knot with another drug wholesaler in August, McKesson Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCK)") else Response.Write("(NYSE: MCK)") end if %> announces plans to acquire the nation's largest healthcare software maker, HBO & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HBOC)") else Response.Write("(Nasdaq: HBOC)") end if %>, for $14.46 billion in stock. The deal will make McKesson, already the biggest healthcare supplies distributor, a new type of one-stop shop for healthcare services.

19... Further strengthening its lead, Kroger Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KR)") else Response.Write("(NYSE: KR)") end if %>, the largest U.S. supermarket chain, says it will buy out competitor Fred Meyer Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMY)") else Response.Write("(NYSE: FMY)") end if %> for $13 billion in stock and assumed debt. Fred Meyer shareholders will end up owning 38% of the new company, which will have about 2,200 stores in 31 states.

23... Internet music retailing rivals CDnow <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDNW)") else Response.Write("(Nasdaq: CDNW)") end if %> and Music Boulevard parent N2K Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NTKI)") else Response.Write("(NYSE: NTKI)") end if %> formally announce they will tie the knot in a stock swap, creating the largest online music store and a formidable force (they hope) against online powerhouse Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %>.

26... Online auction retailer eBay Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EBAY)") else Response.Write("(Nasdaq: EBAY)") end if %> begins its meteoric rise, adding $23 1/4 (yes, you read that right) to $73 3/8, after getting a new "buy" rating and a $100 price target from Donaldson, Lufkin & Jenrette, which, by the way, co-managed the company's September IPO, priced at $18 a share. Little does anyone know that eBay shares will soar past the $200 mark by late November.

November

06... Bookseller Barnes & Noble <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BKS)") else Response.Write("(NYSE: BKS)") end if %> takes the book world -- namely rival Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> -- by surprise by announcing it will acquire leading trade books distributor Ingram Book Group, a unit of privately held Ingram Industries Inc., for $600 million ($200 million in cash and $400 million in stock).

11... News Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> spin-off Fox Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FOX)") else Response.Write("(NYSE: FOX)") end if %> begins trading, rising $2 to $24 1/2 from an initial offering price of $22 1/2 a share. Rupert Murdoch's News Corp. sells a higher-than-expected 18.6% of the subsidiary and raises $2.81 billion. (See our Dueling Fools on News Corp.)

12... PepsiCo's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PEP)") else Response.Write("(NYSE: PEP)") end if %> Board of Directors authorizes the sale of a majority stake in its bottling group, a la rival Coca-Cola Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %>, in an initial public offering scheduled for sometime in the spring of 1999.

13... Hot Internet IPO theglobe.com Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGLO)") else Response.Write("(Nasdaq: TGLO)") end if %> surges on its trading debut, finishing the day at $63 1/2 from an initial offering price of $9 a share after reaching as high as $97. The company's website allows users to build their own free websites, visit chat rooms with such names as "Tequila Sunrise" and "Fuzzy Navel," and shop for everything from discount plane tickets to vitamins.

16... Major U.S. tobacco companies reach a historic settlement of health-related lawsuits with 46 states by agreeing to pay $12 billion up front over five years and more than $9 billion a year beginning in 2008 through 2025 for a total of $206 billion. The tobacco industry agrees to ban cartoon characters in tobacco advertising, fund a $1.5 billion anti-smoking campaign, and pay $250 million for a foundation dedicated to reducing teen smoking.

17... The Federal Reserve cuts interest rates again -- the third in less than two months -- reducing the federal funds rate by a quarter point to 4.75% -- its lowest level in four years. The Fed also shaved 25 basis points off the discount rate to 4.5%, citing that "unusual strains remain" in the financial markets.

24... In what looks to be the most significant Internet merger to date, America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> says it will acquire Netscape Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> in a stock-for-stock deal valued at $4.2 billion that will significantly change the Internet landscape. At the same time, AOL forms a three-year development and marketing alliance with Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %> to promote Netscape's e-commerce software and Sun's Java programming technology in new Internet-related devices.

30... After weeks of speculation, Deutsche Bank AG, Germany's largest bank, officially announces it will acquire investment firm Bankers Trust <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BT)") else Response.Write("(NYSE: BT)") end if %> for $10.1 billion, or $93 a share in cash. The deal will make Deutsche Bank the world's largest financial services firm in terms of assets with more than $800 billion.

December

01... Oil giants and former Standard Oil units Exxon <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XON)") else Response.Write("(NYSE: XON)") end if %> and Mobil <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MOB)") else Response.Write("(NYSE: MOB)") end if %> agree to merge in an all-stock deal worth about $77.2 billion. Exxon shareholders will own about 70% of Exxon Mobil Corp., which will be the world's largest oil company, ahead of Royal Dutch/Shell Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RD and NYSE: SC)") else Response.Write("(NYSE: RD and NYSE: SC)") end if %>, with annual revenues of $202 billion.

The world's largest aircraft maker Boeing Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BA)") else Response.Write("(NYSE: BA)") end if %> says that due to the impact of the Asian economic crisis on air travel, it will cut production rates of commercial planes and eliminate an additional 20,000 jobs through the year 2000 on top of the previously announced 28,000, for a total of roughly 20% of its workforce. As a result, the company anticipates 1999 earnings of $1.5 billion to $1.8 billion, compared with previous projections of $2 billion.

Germany's Hoechst AG <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HOE)") else Response.Write("(NYSE: HOE)") end if %> and France's Rhone-Poulenc SA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RP)") else Response.Write("(NYSE: RP)") end if %> agree to merge their drug and agrochemical businesses -- assets valued at about $36 billion -- in an equally owned concern, to create the world's largest life-sciences company.

09... Britain's Zeneca Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZEN)") else Response.Write("(NYSE: ZEN)") end if %> and Sweden's Astra AB <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: A)") else Response.Write("(NYSE: A)") end if %> announce that they will merge in a stock swap worth $34.6 billion that will create the world's fourth largest drug company. Zeneca shareholders will own 53.5% of the combined company, which will take the name AstraZeneca, with its headquarters in London and its research operations in Sweden.

10... CBS Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %> radio subsidiary Infinity Broadcasting Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: INF)") else Response.Write("(NYSE: INF)") end if %> begins trading after raising $2.87 billion, edging out Fox Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FOX)") else Response.Write("(NYSE: FOX)") end if %> as the third biggest offering this decade. Infinity sells a higher-than-expected 140 million shares, a 17% stake, at $20.50 each, right in the middle of the previously estimated range of $19 to $22.

Insurance giant Aetna <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AET)") else Response.Write("(NYSE: AET)") end if %> says it will acquire the Prudential HealthCare business from Prudential Insurance Co. of America for $1 billion. The purchase will give Aetna an additional 6.6 million health members, making it the nation's largest provider of health benefits, with approximately 22.4 million members, and the nation's top managed care company, with 18.4 million managed care members.

11... Coca-Cola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> announces it will buy most of Cadbury Schweppes PLC's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CSG)") else Response.Write("(NYSE: CSG)") end if %> soft drink brands outside of the U.S., including Schweppes, Canada Dry, Dr. Pepper, Crush, and other regional brands, for $1.85 billion. Coke also warns of lower-than-expected fourth quarter earnings due to continuing economic problems overseas.

18... The world's largest automaker, General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %>, announces it will pay 52.5 billion yen, or $456 million, to increase its 37.5% stake in Isuzu Motors to 49%. Isuzu will design certain GM trucks, and the two automakers will reduce costs by sharing parts such as truck cabs, chassis, and other components.

The world's largest biotechnology firm Amgen Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMGN)") else Response.Write("(Nasdaq: AMGN)") end if %> won exclusive rights to develop and market a new version of the world's best-selling bioengineered drug as an arbitration panel rejected claims by Johnson & Johnson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JNJ)") else Response.Write("(NYSE: JNJ)") end if %> that it has rights to the drug under a 1985 licensing agreement. Amgen's new anemia drug candidate, novel erythropoiesis stimulating protein (NESP), stimulates the production of red blood cells and may allow for less frequent dosing than its predecessor, Epoetin alfa.

That's it for 1998, Fools! Want a peek at 1999?
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