CEO Daily: Tuesday, December 15
The Federal Reserve will finally start raising interest rates tomorrow, for the first time in nine years. This will be the most highly anticipated rate rise in the history of central banking, yet that doesn’t seem to be stopping investors from getting exceedingly nervous about it. The Angst is also being fed by a three-day rout in junk bonds, which in more normal times might be taken as a sign of serious economic troubles. This time, we aren’t sure what to make of it (aside from the obvious impact of the collapsing oil prices on highly-indebted energy companies). So we will move on.
Fortune this morning releases its “blue ribbon” company list – 25 companies that made four or more Fortune lists in 2015. Top of the pile: Alphabet, aka Google, which earned spots on our Businessperson of the Year list, the Change the World list, and the Best Companies to Work For list, as well as the Fortune 500, the Global 500, and World’s Most Admired Companies.
Three other companies earned spots on five of our lists, Nike, Facebook and Cisco.
You can see all 25 Blue Ribbon companies here. More news below.
• GE sells off Japanese leasing business for $4.8 billion
Sumitomo Mitsui Financial Group has agreed to buy General Electric's Japanese leasing business on Tuesday in a deal that represents the latest step toward GE's exit from the finance industry. GE will add nearly $5 billion toward its goal of selling off roughly $200 billion in financial assets from its GE Capital arm, while Sumitomo continues an acquisition streak that includes a $2.2 billion purchase earlier this year of GE's European buyout-lending unit. Bloomberg
• IBM puts Watson to work on the Internet of Things
IBM has a new task for its famous cognitive computer: helping the company's clients sift through mountains of data provided connected objects that are part of the Internet of Things (IoT). A new IBM Watson IoT division staffed with 1,000 employees will be based in Munich, where clients will be able to see firsthand how to use the supercomputer's program interface service's in building their products. IBM says that billions of connected devices will generate 2.5 quintillion bytes of new data every day over the next 15 years and that 90% of clients' data would be unusable for traditional computers. Fortune
• Gilt Groupe nears a sale to Saks' parent
Online high-end apparel retailer Gilt Groupe is reportedly near a deal to sell itself to Hudson's Bay Company, the owner of Saks Fifth Avenue, for roughly $250 million. That price would represent only a fraction of the $1.1 billion at which Gilt was valued by investors just four years ago. Gilt has struggled in recent years to pull away from rival e-commerce sites that also offer similar products at steep discounts as part of flash sales. Wall Street Journal (subscription required)
• Analysts remain positive about Square
The mobile payments company's future seemed to be up in the air since cofounder and CEO Jack Dorsey opted for double duty as Twitter's chief executive. But a handful of investment banks have labeled Square with positive ratings recently, including Jefferies and Goldman Sachs (both of which were underwriters on the company's IPO). Positive analysts are optimistic over Square's plan to sell business services along with its payments software as well as the potential for increasing profit margins. Fortune
Around the Water Cooler
• Grading this hedge fund head's plan to fix Yahoo
Eric Jackson, a vocal Yahoo critic who runs New York hedge fund SpringOwl Asset Management, recently presented an extensive turnaround plan for the tech company and hinted at the possibility of launching a proxy fight. The ambitious proposal would axe roughly three-quarters of the company's employees, including CEO Marissa Mayer, while selling off a lot of assets and partnering with a large media investor like John Malone's Liberty Media. Fortune
• Dow and DuPont seek major tax break in mega-merger
The $130 billion proposed tie-up between chemicals giants Dow Chemical and DuPont is part of a master plan to combine the two companies only to break them up again into three businesses. But, another driving factor is a much lighter tax bill, as the tax-free spinoffs could potentially save the companies tens of billions of dollars in taxes. The deal represents the latest example of U.S. corporations using M&A as a tool to trim tax bills. Reuters
• Disney's plan to send 'Star Wars' into orbit
Amid speculation that Star Wars: The Force Awakens could be one of the biggest box office hits of all time, Walt Disney Studios doesn't want to take any chances with a conservative rollout. The film's distributor is releasing the new Star Wars in 4,100 theaters—a record for the month of December, when past films (even blockbusters) have struggled to post impressive opening-weekend ticket sales. Disney has spent roughly $350 million to produce and market the film around the world and its box office success is a key factor in turning the company's 2012 purchase of Lucasfilm into a global behemoth that could pull in more than $7 billion next year between ticket sales and related merchandise. New York Times
5 things to know today
The Wait for the Fed Is Nearly Over—5 Things to Know Today. Today's story can be found here.