12:00PM New York, 5:00PM London – Alitalia may be sold to Air France –KLM thorugh stock swap according to Italian finance minister.

ING has agreed to sell its reinsurance division in the U.S. to Berkshire Hathaway Inc.

After months of negotiations and bids withdrawal Italian Finance Minister Tommaso Padoa said today that his ministry and the government favors Air France-KLM for the sale of Alitalia.

The finance ministry holds 49.9% in the airline. Air France has offered to purchase the stake with its shares and valued the airline at half the current market value to 486 million euros or $720 million. The lack of cash in the deal shows the Aliltalia’s weakness in the market.

The national airline is estimated to lose nearly one million euros a day on high operating costs, overstaffed offices, and poor traffic and route networks in Europe and Asia.

The ministry intends to hold exclusive talks with Air France-KLM in the coming weeks to finalize the details of the agreement.

Senior ministers in the government had favored sale to local discount carrier Air One SpA but the workers unions worried that many more jobs may be lost if Air One operated the carrier.

ING Group announced today that it has reached an agreement with Berkshire Hathaway Group to sell its reinsurance unit NRG N.V. for approximately 300 million euros or $440 million.

The sale is part of ING’s strategy to focus on its core insurance, banking and asset management businesses. The sale will help ING to free up capital that will be tied up in potential long term claims that may arise from asbestos and tobacco liabilities.

NRG was established in 1968 as Nederlandse Reassurantie Groep, as a result of the merger of the two main Dutch reinsurance companies at the time. ING became majority shareholder in 1974 and the sole owner in 1991, following the acquisition of Victory Reinsurance Company.

ING decided in 1993 to run off NRG, stopping the underwriting of new business. ING suffered heavy losses after Exxon Valdez oil spill in 1989.

Since then, NRG’s life reinsurance subsidiaries were sold and a number of the remaining insurance liabilities were successfully settled.

The acquisition will be made by one of the insurance companies within the Berkshire Hathaway Group. The sale for approximately 300 million euros will result in a capital loss after tax of around 100 million euros for ING in 2007 and an improvement of 47 basis points of the debt to equity ratio of ING Group in 2008.

The transaction is subject to regulatory approval and is expected to close in the first half of 2008.


11:00AM New York – Early rally in U.S. averages fades as trading enters in the second hour.

Dow Jones Industrial Average rose 35.61 to 13,394.32, Nasdaq increased 9.45 to 2,686.24, and S&P 500 gained 5.07 to 1,481.34.

November new home sales decline of 9% was the steepest level in sixteen years. The new home sales declined to a seasonally adjusted rate of 647,000. The Commerce Department also revised the October new home sales rise to 1.7% at annual rate of 711,000 from 728,000.

November sales fell 34.4% from a year ago in November, second largest decline after 35.3% plunge in 1991.

The median sales price of new houses sold in November 2007 was $239,100; the average sales price was $293,300. The seasonally adjusted estimate of new houses for sale at the end of November was 505,000. This represents a supply of 9.3 months at the current sales rate.