PHARMECEUTICALS

MCKESSON AGREES TO PAY $960 MILLION TO SETTLE SUIT McKesson Corporation, the biggest American drug distributor by revenue, said yesterday it agreed to pay $960 million to settle a shareholder suit filed after a restatement in 1999 led to a one-day, $8.6 billion drop in the stock.

McKesson will increase reserves by $240 million to help pay for the class-action settlement, the San Francisco-based company said in a statement distributed by Business Wire.

The agreement resolves a lawsuit brought after McKesson said April 28, 1999, that that its software subsidiary HBO & Company prematurely booked $40 million in sales, forcing the restatement of earnings. McKesson shares lost 47% of their value that day.

“Today’s agreement represents a significant step toward fully resolving the uncertainty related to this unfortunate chapter in the company’s history and allows us to focus once again only on the future,” said John Hammergren, McKesson’s chairman and chief executive officer, in the statement.

– Bloomberg News

STATEWIDE

KODAK BUYS SUN CHEMICAL’S 50% STAKE IN GRAPHIC ARTS JOINT VENTURE Accelerating its push into digital commercial printing, photography giant Eastman Rochester, N.Y.-based Kodak said yesterday it is paying $817 million for Sun Chemical Corp.’s 50% stake in a jointly owned commercial graphic arts business. Acquiring all of Kodak Polychrome Graphics, a joint venture started in 1998, will boost Kodak’s revenues by about $1.1 billion and its operating profits by 8 cents a share this year. It will also expand Kodak’s global distribution network for digital printing systems, the company said.

The deal “is another decisive step in the implementation of our digitally oriented growth strategy and strengthens Kodak’s ability to compete in the fastest-growing segments of the industry,” said Kodak’s chief executive, Dan Carp.

Kodak shares rose 25 cents to close at $31.30 in Wednesday trading on the New York Stock Exchange. Its shares are down from a 52-week high of $34.74 in October. Kodak said it will pay $317 million in cash to Fort Lee, N.J.-based Sun Chemical when the deal closes in April, then $200 million in the fall of 2006 and $50 million annually from 2008 through 2013.

– Associated Press

TECHNOLOGY

RACE CAR INNOVATION TO AID CHOPPER PILOTS’ VISION IN IRAQ A protective windshield coating that improves visibility for NASCAR drivers is getting a new application on the windshields of Army Blackhawk helicopters flying combat missions over Iraq.

The clear plastic film – used to keep flying debris from ruining the view for race car drivers – was pioneered by Pro-Tint Inc., a company with just 14 employees that came up with tear-away windshield film in the late 1990s.The multilayer product is now used by virtually all Nextel Cup teams.

Instead of replacing a scratched and pitted windshield, race teams merely peel off a layer of the protective film to reveal a new, clear layer of film underneath. Recently, Pro-Tint teamed with United Protective Technologies, another small firm, to produce a thicker and more complex Mylar protective film for military helicopters.

Starting this month, the companies will start shipping the coating, which is to be installed on hundreds of Blackhawks flying in war zones like Iraq and Afghanistan.

In normal use, Blackhawk windshields last about two years. But the harsh conditions of the Middle East – where choppers are pelted with gritty sand and other debris – have reduced the average durability to under a year, the military has told Pro-Tint.

The Army hopes to save millions of dollars with windshield films. Advanced Screen Saving Aviation Layered Tear-away kits, as the military calls them, aren’t cheap – about $1,000 – but they’re a bargain compared with replacing a windshield, said Pro-Tint vice president, Steve Fricker.

– Associated Press

ADVERTISING

KRAFT TO PULL SNACK-FOOD ADS AIMED AT YOUNG KIDS Taking steps to address concerns about rising rates of obesity among children, Kraft Foods said yesterday it is placing restrictions on its advertising to children under 12 years old. The Northfield, Ill., company will phase out television, radio, and print advertisements for products such as its regular Kool-Aid beverages and Oreo and Chips Ahoy! cookies that will be viewed primarily by children ages six to 11. Instead, ads targeted to this age group will focus on foods Kraft considers to be more healthful. Kraft already doesn’t target children under six in its advertising.

The company also will highlight its more nutritious products to all consumers by adding a “Sensible Solutions” logo to the packages of these products, beginning in April.

Kraft’s announcement comes on the same day that the American government releases its new dietary guidelines. The guidelines emphasize fruit and vegetables, whole grains, milk, and healthful fats such as those found in nuts and olive oil. The guidelines also focus on limiting calories as a way to control weight.

In total, the changes will affect products that make up about 10% of Kraft’s annual revenue, which is more than $30 billion, said a Kraft spokesman Mark Berlind, in an interview with Dow Jones Newswires. Kraft doesn’t plan to reduce its overall spending on advertising, but it will shift how its dollars are spent.

Kraft and other food companies have been criticized by consumer activists and health-care professionals for the way they market products to children and teens. Some groups have even asked for the government to establish guidelines for marketing to kids, especially in light of the rising number of overweight children.

– Dow Jones Newswires