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Appliance giants negotiate deal for North American market

Consumers in New Jersey may be interested to learn that two well-known appliance giants, General Electric and Electrolux, are making moves that could benefit both companies in the future. Electrolux plans to buy the appliance division of GE in order to increase sales in the North American market.

Electrolux, considered a strong appliance brand in the European market, has agreed to pay GE more than $3 billion for its appliance division, which does most of its business in North America. The purchase, according to Electrolux representatives, should help to increase their presence in the continent's appliance sales, a market where they have not shown strength in the recent past. They hope to become a contender against their biggest rival, Whirlpool, by acquiring GE's extensive line of products, which includes stoves, refrigerators, water heaters and air conditioners. The current statistics show that America has about one third of the sales market, while western Europe represents just over a fourth. Data also suggests that the North American market is growing at a much faster rate.

Timing buy-sell agreements

Experts say that the best time for New Jersey business owners to enter into a buy-sell agreement is when things are going good. If a new business is being formed, a buy-sell agreement can be incorporated into the operating agreement of an LLC or the shareholder agreement of a corporation. As long as things are good and the business is profitable, the buy-sell agreement remains in the background. However, when triggering events occur, the agreement kicks in.

Buy-sell agreements are also referred to as business continuation and buyout agreements. They allow owners to specify in advance what procedure will be used to buy out a departing owner. Agreements usually cover such things as who is eligible to buy an owner's share of the business, how a business valuation will be performed and what funding mechanisms will be used.

3 big winners among Google's $23 billion in acquisitions

Entrepreneurs in New Jersey could be interested in this story about the 145 companies that have been purchased by Google in the last ten years to the tune of $23 billion. These facts are from FactSet. According to many financial analysts, only three of those acquisitions are obvious winners.

In 2005, they purchased Android for $50 million, which will be running on 80 percent of all smartphones bought in 2014. According to IDC, they'll also profit from Gmail, Google searches and other apps run on them. Google then purchased YouTube for $1.65 billion in 2006, which may have seemed quite high to some people back then, but the company brought in gross revenues of $5.6 billion in 2013, making it their biggest winner by far. Then, in 2007, they purchased DoubleClick for $3.1 billion, expanding their online advertising scope into the area of display ads.

Pizzeria intends to countersue Turnpike Authority

A Florida company that was sued by the New Jersey Turnpike Authority has notified the agency of its intention to countersue if the issue isn't dropped. The business dispute arose in connection with the pizzeria's logo because of the use of the Garden State Parkway shield in the graphic. The pizzeria opened in 2006, using a variation of its current logo from the beginning.

According to an attorney for the pizzeria, the shield is in the public domain. Additionally, the attorney informed representatives of the agency that their complaint doesn't indicate details about the registration of the logo. The current logo for the pizza restaurant was reportedly registered at the federal level in 2011. Additional points made by the company's lawyer include the fact that it would be difficult for an individual to confuse the two entities because pizza and the New Jersey Turnpike are two very different operations. While logos for both organizations include a map of New Jersey centered in a circle, the wording of the two symbols is significantly different.

AIG resolves shareholder dispute

Investors in New Jersey may be affected by recent news that AIG reached a settlement to resolve its shareholder lawsuit by paying out $960 million. The shareholder lawsuit resulted from the 2008 bailout provided by the federal government. AIG officials disclosed details of the settlement during its second quarter earnings call. The shareholders were seeking upwards of $100 billion in restitution.

The plaintiffs claim they made investments into the insurance company based on false and misleading information provided by executives, directors and an independent auditor concerning its operations and financial health. The 2008 financial crisis and calls from creditors led to AIG seeking $180 billion from the U.S Treasury. AIG officials claimed that resolving the dispute allows the company to focus on its future. The latest announcement has been a part of a series of moves made as the company readies for a new CEO in September 2014.

Online real estate company Zillow buys its main competitor

A recent business move by the real estate website Zillow Inc. might be of interest to New Jersey residents. Zillow is set to obtain an even bigger online real estate presence after agreeing to purchase Trulia Inc., its main competitor, for $3.5 billion after lengthy contract negotiations. With 83 million unique monthly visitors, Zillow already held the No.1 spot in the online real estate market. The purchase of the No. 2 ranked real estate website Trulia will offer the company an additional 54 million unique monthly visitors.

The transaction will combine both of the companies while still maintaining separate Zillow and Trulia brand identities. According to spokespersons for both of the companies, there is minimal overlap of customers who visit either of the websites. Around half of the unique monthly visitors to Trulia's website reportedly don't look for properties on Zillow.

Virgin America files for an initial public offering

Investors in New Jersey may be interested to learn that Virgin America Inc. has filed for an initial public offering. The announcement comes at a time when the top-ranked airline is reportedly interested in expanding its operations in the U.S. airline market. Currently, Virgin America flies to 22 cities across the United States and Mexico and operates primarily out of San Francisco and Los Angeles.

British billionaire Richard Branson was involved in Virgin America's business formation and now owns a 22-percent stake in the company. Because Branson is a foreign investor, his ownership of the U.S. airline is restricted. In 2013, Virgin America reported $1.42 billion in revenue and $10.5 million in profit. Branson also has a 51-percent stake in Virgin Atlantic airlines.

The importance of a business plan

There has been a recent trend of entrepreneurship advocates telling people interested in starting a business in New Jersey or elsewhere in the country that creating a business plan isn't necessary. Some believe that due to the fast pace of the current business world, it is better to just get started and react as issues develop. While this may be attractive due to the fact that creating a business plan takes time and effort, there are a number of reasons individuals should take the time to do so, one of the biggest being that it increases a new enterprise's chance of success.

Some of the reasons for the increased ability to succeed are that people who create business plans are better able to compare their expectations for products and income with reality. Creating a business plan requires that companies map out a plan of action and take the time to calculate costs and compare them to expected income as well as the capital needed to operate.

New Jersey corners life-sciences market in real estate

A Houston drug company with a new influx of $65 million plans to move to New Jersey. Pernix Therapeutic Holdings revamped the company, installed new executives and found investors willing to back company growth as they look at developing specialty drugs. However, the company will need to relocate to New Jersey because of the established pharmaceutical talent already there.

One consideration is a transition from larger campuses to renting space in smaller facilities. Some companies have vacated New Jersey, but people with a strong background in the industry might not have left the state. These individuals sometimes transitioned to smaller, local companies. As for Pernix, they relocated to a 6,400 square-foot building in Morristown. Despite reduced square footage, the new location has space for expansion and will provide better accessibility to New York City. The proximity to New York City with access to its financial marketplace along with certain transportation options has also attracted businesses.

Deciding on the best structure for a business

Before starting a business in New Jersey, it is important to think about the best structure based on plans and goals. Experts indicate that this decision about legal structure is one of the most important parts of the business formation process. The legal structure plays an important role in determining personal liability and taxation. No specific structure is necessarily the best; the unique details pertaining to a startup are important for making the decision to form a sole proprietorship, partnership, corporation or LLC.

Those who have been involved in more than one business startup emphasize the importance of investing in sound advice prior to formalizing a business structure. Sources of information include accountants, lawyers and organizations such as the Service Corps of Retired Executives.

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