AIG sells its stake in United Guaranty + MORE Aug 16th

NEW YORK, N.Y. – AIG on Monday said it is selling its stake in United Guaranty to Arch Capital Group in a cash-and-stock deal worth $3.4 billion.
The move is part of New York-based American International Group Inc.’s ongoing effort to streamline its organization.
United Guaranty Corp. is a major private mortgage insurance company. Arch Capital, based in Bermuda, writes specialty lines of property and casualty insurance and reinsurance, as well as mortgage insurance and reinsurance.
The deal includes $2.2 billion in cash, $250 million of newly issued Arch Capital perpetual preferred stock and $975 million of newly issued convertible non-voting common-equivalent preferred stock. The transaction still requires regulatory approval.
AIG in January announced its plan to spin off United Guaranty amid pressure from activist investor Carl Icahn, who has called for AIG to be split into three separate companies.
Icahn has argued that AIG is “too big to succeed,” playing on the phrase “too big to fail,” a label put on the company during the financial crisis…

CANBERRA, Australia – The world’s biggest miner, BHP Billiton, on Tuesday reported a $6.4 billion loss, the worst full-year result in the Anglo-Australian company’s history.
BHP said the result for the fiscal year ending June 30 came from a 31 per cent fall in revenue to $30.1 billion amid weak commodity prices, write downs of U.S. oil and gas assets and a disaster at a Brazilian mining joint venture.
BHP posted a $1.9 billion profit for the previous year, which was 14 per cent of the $13.8 billion posted in 2013-14.
The latest result is the worst since the company headquartered in Melbourne, Australia, was formed in 2001 through the merger of two corporations founded in the 19th century — Australia’s Broken Hill Proprietary Co. Ltd. and London-listed Billiton Plc.
In 2010-11, it posted its best results ever of $23.6 billion.
A dam failure in November at an iron ore mine co-owned by BHP and Vale in Brazil killed 19 people and caused the worst environmental disaster in the country’s history…

TORONTO – Retail experts are forecasting an increase in Canadian back-to-school spending this summer thanks in part to the low loonie and the new Canada Child Benefit.
Business consulting firm EY, formerly Ernst and Young, predicts that retailers will see a 4.5 per cent increase this year over 2015 sales as students stock up for another year in the classroom.
EY’s forecast is based on factors that include province-by-province employment numbers, housing markets and consumer spending habits over the past 12 to 18 months, said EY’s Daniel Baer in a recent interview.
EY also asked retailers across the country for their own sales trends and expectations.
Back to school is the second-biggest shopping season after Christmas, Baer said.
“What we’ve been seeing is stronger retail sales for a few reasons,” said Baer. “The Canadian economy has been relatively strong (and) there’s been some more government spending in terms of child-care benefits … putting money into the hands of families…

ANKARA, Turkey – Turkey’s state-run news agency says police have launched simultaneous raids on 44 companies suspected of providing financial support to U.S.-based Muslim cleric Fethullah Gulen’s movement.
Turkey accuses Gulen of being behind the July 15 failed coup, a claim Gulen denies.
The Anadolu Agency says Tuesday’s raids in Istanbul’s Umraniye and Uskudar districts came after authorities issued warrants to detain 120 company executives as part of the investigation into the coup attempt. The agency did not identify the companies searched.
The government has launched a massive crackdown on suspected supporters of Gulen’s movement. More than 35,000 people have been detained for questioning while tens of thousands of others have been dismissed from government jobs, including in the judiciary, media, education, health care, military and local government.
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Managing director and head of global financial strategies at Credit Suisse Michael Mauboussin distills 30 years of investing wisdom