UnitedHealth to buy most of Brazil’s Amil for $4.9 billion

NEW YORK, Mon Oct 8, 2012 – UnitedHealth Group Inc said it would buy a 90 percent stake in Amil Participacoes SA, Brazil’s largest health insurer and hospital operator, for $4.9 billion, tapping into a fast-growing private healthcare market as challenges mount for its U.S. business.

The deal announced on Monday follows a series of multibillion-dollar takeovers by U.S. health insurers in their home market, including Aetna Inc.’s $5.6 billion buy of rival Coventry Health Care Inc. and WellPoint Inc.’s planned $4.5 billion purchase of Amerigroup Corp.

“(Brazil’s) growing economy, emerging middle class and progressive policies toward managed care make it a high- potential growth market,” UnitedHealth Chief Executive Stephen Hemsley said in a statement.

U.S. health insurers have come under pressure as the government reins in reimbursement for its Medicaid and Medicare programs for the poor and the elderly and as competition grows among health plans serving employers.

The deal with Amil adds to a growing international business at UnitedHealth, the largest U.S. health insurer. The company has begun operations or struck alliances in Australia, the Middle East and the UK during the past two years.

Buying the stake in Amil gives UnitedHealth a chance to test a different model of medical service: Amil offers insurance coverage and also runs hospitals and doctor facilities. While some examples of this already exist in the United States, the largest U.S. insurance companies for the most part operate separately from networks of doctors and other healthcare providers.

Wal-Mart bribery review includes Brazil, China

WASHINGTON, Tue Jun 12, 2012 – Lawyers for Wal-Mart Stores Inc. have flagged Brazil, China, India and South Africa in addition to Mexico, as countries that represent the highest corruption risk in a global review, according to a letter from lawmakers investigating the company.

The lawyers said they were retained to review Wal-Mart policies in Mexico, Brazil and China, and later recommended the company also evaluate its operations in India and South Africa. The lawyers referred to those five countries as regions where the risk was the greatest, according to the lawmakers.

The company has acknowledged it is investigating bribery allegations involving its Mexican operations, and that it is conducting a global review of its anti-corruption compliance program, but has not provided details about the review.

The new details came in a letter from two Democratic lawmakers, Representatives Elijah Cummings and Henry Waxman, who are the ranking members, respectively, of the House Oversight and House Energy committees.

The pair wrote to Wal-Mart Chief Executive Michael Duke on Tuesday and asked him to provide additional documents and allow certain witnesses to cooperate with a congressional investigation into the bribery allegations.

Outside lawyers for Wal-Mart briefed the lawmakers on May 21 about the company’s program to comply with the Foreign Corrupt Practices Act, a 1970s-era law that bars bribes to officials of foreign governments.

But the lawyers did not answer any questions about the substance of the bribery allegations, which were brought to light in an April 21 New York Times report that said that management at Wal-Mart de Mexico orchestrated bribes of $24 million to help it grow quickly in the last decade and that Wal-Mart’s top brass tried to cover it up.

The two lawmakers have previously expressed frustration about the information they have received from Wal-Mart.

Wal-Mart representatives did not immediately respond to a request for a comment, but the company has said it is “committed to a full and independent investigation,” and that “it would be inappropriate for us or others to come to conclusions before the investigation is complete.”

GE profit up 18 percent, driven by foreign markets’ growth

FAIRFIELD, Conn. ― General Electric Co. reported an 18 percent profit rise that met Wall Street’s expectations, helped by strong revenue growth in key foreign markets including Brazil, Russia and China.

The largest U.S. conglomerate said on Friday it expects earnings to rise at a double-digit percentage rate next year, following peer United Technologies Corp in trying to assuage investors’ fears about Europe’s brewing debt crisis.

“We continue to successfully navigate a volatile global economy,” Chief Executive Jeff Immelt said in a statement.

Investors took heart in the company’s 16 percent growth in industrial equipment orders — an important indicator of future revenue, and in the 25 percent rise in international sales. GE has been counting on strong demand in rapidly developing economies to offset weak U.S. and European demand.

“The revenue number was strong and the organic growth rate in industrial was strong,” said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. “Those are telling and they give us a little bit of a look into next quarter and beyond.”

But GE shares declined 1.4 percent to $16.40 in premarket trading as some raised concerns that its profit margins were weaker than expected in the quarter, with a low tax rate helping the company to meet expectations.

“Margins missed our forecast and were down year on year in the four big industrial businesses,” said Jeffrey Sprague, managing partner at Vertical Research Partners. “There is little or no operating leverage in GE’s portfolio due to low priced equipment in backlog and R&D headwinds.”

The report comes amid a wave of generally strong earnings reports from big U.S. manufacturers. Also on Friday, Honeywell International Inc reported a 45 percent profit rise. Fellow blue chips Caterpillar Inc and 3M Co will report next week.

Still, investors remain concerned whether Europe’s crisis could drag down global demand by shaking the financial system.

“Possible concerns going forward are going to be related to Europe and what impact that may have, not just there but on global growth in general,” said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan. “There’s elevated uncertainty.”

The world’s biggest maker of jet engines and electric turbines reported third-quarter earnings attributable to common shareholders of $2.34 billion, or 22 cents per share, compared with $1.98 billion, or 18 cents per share, a year earlier.

The results included an 8-cent-per-share charge to buy back the preferred shares the company had sold to Warren Buffett’s Berkshire Hathaway Inc during the financial crisis.

Buying back the Buffett stake, which carried a preferred dividend, will boost GE’s annual earnings by 3 cents per share in the coming years.

Factoring out one-time items, profit came to 31 cents per share, meeting analysts’ average forecast, according to Thomson Reuters I/B/E/S.

Revenue was little changed at $35.37 billion, above the $34.94 analysts had forecast.

GE’s weak point on profit remained its big energy infrastructure division, where earnings slipped 9 percent despite a 30 percent rise in revenue, reflecting pricing pressure on wind turbines. The company has said that business will resume profit growth next year.

“That’s bottoming out. It will start to turn up probably in the next quarter but definitely in 2012,” said Harbor’s De Gan. “It’s a margin issue. Margins have contracted because wind is just so terrible.”

Before today, GE shares had fallen about 9 percent so far this year, while the Dow Jones industrial average has declined less than 1 percent.