Top 10 Stories, June 26-30

1. The Big Get Even Bigger in the Food Business: Philip Morris Cos., parent of Kraft Foods, agreed last Sunday to buy Nabisco Holdings Corp., the maker of such popular cookie and cracker brands as Ritz and Oreo, for $14.9 billion, making the country’s largest packaged-food company even bigger with products on virtually every supermarket aisle. The deal gives Kraft, which has a stable of mature brands, access to the fast-growing snack sector. And, analysts say, an announced public offering of up to 20% of the combined company’s stock signals the tobacco giant’s intent to finally spin off its food business, which has been depressed by the threat of huge payouts for smoking-related lawsuits.

--Melinda Fulmer

2. Wooing Hollywood: GTE Corp. gave millions of dollars of free communications services to several Hollywood moguls in what regulators say was an illegal effort to win big contracts in the entertainment industry. GTE is likely to be fined several million dollars by the California Public Utilities Commission as part of a settlement of the allegations. Academy Award-winning director Steven Spielberg, the DreamWorks SKG movie studio and the powerful Creative Artists Agency talent firm were among the recipients of GTE’s favors.

3. WorldCom, Sprint Deal Opposed: The U.S. Justice Department sued to block WorldCom Inc.’s proposed $129-billion buyout of Sprint Corp., charging that the combination would threaten competition for long-distance services, corporate telecommunications networks and Internet backbone services. Combining the No. 2 and No. 3 U.S. long-distance telephone providers would create a company with power to raise prices for business and residential long distance, data transmission and customized networks for large corporations, the department said. The companies withdrew a separate merger application pending before the European Union.

4. Cardholders’ Revenge: Frustrated Providian Financial Corp. credit cardholders cheered a record $300-million settlement between U.S. bank regulators and the San Francisco-based bank, which was accused of deceiving customers, levying bogus fees and charging customers for products they did not want or need. The bank denied any wrongdoing but said it has already taken steps to correct many of the problems exposed by a yearlong investigation by the San Francisco district attorney and the U.S. Comptroller of the Currency. Refund checks to about 1 million customers should hit mailboxes this fall.

--Edmund Sanders

5. Disappearing Jobs: It was Black Monday for workers at Boeing Co. in Huntington Beach, as employees learned the aerospace company plans to eliminate up to 900 jobs at that site over the next two years. The world’s largest plane maker said it will shift work on the Delta rocket and the C-17 military aircraft to Colorado and Alabama. Workers wondered how they’ll find other jobs, with local aerospace jobs disappearing rapidly this year and the unemployment rate hovering at record lows. About 12,000 aircraft industry jobs have evaporated in Los Angeles and Orange counties over the past 12 months. At Boeing, 11% of the workers will be rubbed off the payroll. The cuts are part of a consolidation of manufacturing operations that began in 1998, shortly after Boeing bought rival McDonnell Douglas. They will cost the Seattle-based Boeing its stature as Orange County’s largest private employer, allowing Disney to claim that title.

--Leslie Earnest

6. Online Grocer Bags Its Competition: Webvan Group Inc. agreed to buy one of its largest competitors, HomeGrocer.com Inc., which entered the Los Angeles market in January, for $1.2 billion, to increase its customer base and accelerate its national expansion. By buying its competition, Webvan, which operates in only three U.S. markets--Sacramento, San Francisco and Atlanta--can move into six more areas immediately and expand to 15 locations in the next year at half the cost. After the deal closes in the fourth quarter, HomeGrocer will convert to the Webvan name and adopt the Foster City company’s pricing and delivery policies. Analysts said the consolidation in the ranks of online grocers was inevitable.

--Melinda Fulmer

7. Tobacco Victory: Cigarette makers last week won a legal victory in the first smoker injury case in the history of New York state when a jury in Brooklyn found them not liable for the lung cancer of a longtime smoker. The verdict followed a two-month trial of the suit by Clyde Anderson, 57, a former laborer who blamed his illness on more than 30 years of smoking and on fraudulent statements he said were made about the risks and addictiveness of smoking. The verdict turned unexpectedly on a 5-1 decision by jurors that smoking was not a “substantial factor” in causing Anderson’s illness, which industry lawyers had attributed to workplace exposure to toxic substances. The victory came as something of a morale boost for tobacco companies, which have suffered three consecutive West Coast losses in which lung cancer victims or their families won damages totaling $78.2 million. Those cases are being appealed. In addition, closing arguments are scheduled the week of July 10 in the punitive damages phase of a landmark class-action case in Miami on behalf of all sick smokers in Florida.

--Myron Levin

8. HMOs Quit Medicare Business: United Healthcare and Humana Inc. are the latest health plans to curtail coverage to senior citizens. The companies said Friday the Medicare program no longer pays them enough in certain states to offer a competitive product and make money. Amid pressure from investors to increase profits, health maintenance organizations say they have no choice but to leave unprofitable markets.

--Associated Press

9. Spanish Internet: Univision Communications Inc. quietly launched its own Spanish-language Internet portal, complete with its popular proprietary broadband content, a play that should significantly advance efforts to spread Web use among immigrant Latinos. The Los Angeles-based network is the fastest-growing broadcaster in the U.S., holding an 83% share of the prime-time audience that watches TV in Spanish and appealing most strongly to less acculturated immigrants. As portals and Web sites targeting Latinos flourished in the last year, Univision kept its viewers in the dark on the cyber-revolution with a blanket ban on all advertisements from would-be competitors. But as early as next week it is expected to begin aggressively promoting its own venture on the network. The publicity will reach millions of immigrants who have been among the country’s least connected.

--Lee Romney

10. Stock Mystery: Somebody keeps buying shares of Los Angeles-based Castle & Cooke Inc. at prices above the $19.25 a share that real estate developer David Murdock has agreed to pay for the company, which owns the Hawaiian island of Lanai and other prime real estate. The heavy buying, up to 10 times the stock’s typical volume, pushed Castle & Cooke shares as high as $19.75, a 52-week high. Analysts believe the buyer expects either Murdock or someone else to come up with a higher bid. Another possibility is that buyer expects to collect more than $19.75 a share through a complicated legal maneuver in the Hawaiian court system that would force Murdock to pay more for the company.

Corporate Spies

Oracle Corp.’s hiring of detectives to dig up information on archrival Microsoft Corp. didn’t shock executives in Silicon Valley, where “security” companies hired by many of those firms say it is standard procedure to get down in the dirt to muddy the image of competitors or profit from their work. Oracle Chief Executive Larry Ellison said he authorized payments to a private detective agency to spy on several trade and policy groups that publicly supported Microsoft in the federal antitrust case. He portrayed his efforts as a public service, although Oracle would benefit directly from a wounded Microsoft. “Dumpster diving,” hacking, bribery, hiring away key employees--even not-so-casual conversations with unsuspecting relatives of company executives have become conventional tools in the unconventional business of corporate espionage.

--Associated Press

The Quiz

1. Financier Carl Icahn looks to walk away with $800 million from the Philip Morris Cos. purchase of Nabisco Holdings Corp. Name his next target.

2. Hughes Electronics Corp. needs to hire 800 engineers. What will they do for the El Segundo company?

3. How much money did Capstone Turbine Corp. of Woodland Hills raise in its initial public offering this week?

Answers to Week in Review Quiz on C2

1. CSX Corp, the Richmond, Va.-based rail concern, is financier Carl Icahn’s next target.

2. Hughes Electronics Corp. hopes to hire 800 engineers to design and build satellites.

3. Industrial engine company Capstone Turbine Corp. raised $130 million in its initial public offering this week.