Finance & Business World

Property and casualty insurer Alleghany Corp. has agreed to buy the insurer Transatlantic Holdings Inc. in a cash-and-stock deal valued at about $3.4 billion.

The companies say the deal values Transatlantic at about $59.79 per share. That’s a 10 percent premium to the company’s $54.43 Friday closing stock price.

New York-based Transatlantic had been courted by several businesses, receiving takeover offers from Validus Holdings Ltd. and a unit of Warren Buffett’s Berkshire Hathaway Inc., National Indemnity Corp. It also said in October that it had started confidential talks with an unnamed party.

In the deal with Alleghany, Transatlantic stockholders will receive 0.145 shares of Alleghany and $14.22 in cash for each share they own.

The companies say the deal announced Monday is expected to close early next year.

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A town hall meeting with Ben Bernanke and a group of military families discussing family finances wouldn’t normally draw much notice.

But for this particular event, the Federal Reserve chairman is venturing into Texas. And those who watch the Fed say the visit sends a message to Bernanke’s critics: The Fed is independent and won’t be intimidated.

Three months ago, Texas Gov. Rick Perry, who is seeking the Republican presidential nod, had sent a veiled threat: Bernanke would be treated “ugly” in Texas if he continued to pursue ever-lower interest rates _ a policy that Perry and some other critics say is akin to recklessly printing money.

Now, Bernanke is visiting Texas for the first time since then, to a U.S. Army fort in El Paso.

His destination may not be coincidental.

“There has to be a political significance to this trip, given what presidential candidate Perry said about the Fed chairman and about how badly he would be treated in Texas,” said David Jones, head of consultant DMJ Advisors and the author of books on the central bank. “The Fed sees Texas as a good place to make a stand to assert the Fed’s independence.”

The Fed wouldn’t say whether the El Paso town hall meeting was planned before or after Perry made his remarks.

Fed officials say only that Fort Bliss was chosen because it has a successful financial literacy program that Bernanke wants to highlight. The town hall meeting is the latest in a series of public outreach efforts Bernanke has made, they say.

Over the past 2 1/2 years, Bernanke has attended a half-dozen informal gatherings in Kansas City, Atlanta, Cleveland and other cities. This week’s town hall meeting is his first in Texas.

David Wyss, an economist and former Fed staffer, said the site of Thursday’s event was likely influenced not just by Perry’s remarks but also by criticism from another Texan seeking the presidency: Rep. Ron Paul, a Republican congressman who favors abolishing the Fed.

“The fact that he is getting a lot of criticism from the two Texas candidates is a good reason to go to Texas,” Wyss said.

Perry’s remarks about Bernanke drew condemnation, including sharp retorts from former Vice President Dick Cheney, political adviser Karl Rove and other members of President George W. Bush’s administration.

Speaking in Iowa in August, Perry had said:

“If this guy prints more money between now and the election, I don’t know what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas.”

Perry added that the Fed chairman’s policymaking could be viewed as “treasonous.”

The Perry campaign declined Tuesday to discuss the governor’s previous remarks.

Bernanke, a Republican, served as Bush’s chief economist before being chosen in 2006 to lead the Fed. He hasn’t responded publicly to Perry’s remarks.

On Wednesday morning in Washington, Bernanke will make welcoming remarks at a Fed conference on small business and entrepreneurship.

Last week, Bernanke did address criticism from House Speaker John Boehner and Senate Republican Leader Mitch McConnell. In September, McConnell and Boehner were among four Republican leaders who signed a letter urging Bernanke to refrain from policies that they said could escalate inflation in the future.

When asked at a news conference last week if that letter had breached the Fed’s political independence, Bernanke was polite but firm.

“We listen to everyone’s input,” he said. “We are going to make our decisions based on what’s good for the economy, and we’re not going to take politics into account.”

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Stock indexes are edging higher in early trading ahead of a key confidence vote in Italy that is the next step in Europe’s unfolding debt crisis.

Italian bond yields have spiked this week, a sign that markets are questioning the country’s ability to pay its debts. Italian Premier Silvio Berlusconi’s main coalition ally urged him to step aside Tuesday ahead of a vote that could force his resignation. Many investors believe a new government would enact additional austerity measures that could help Italy cut its massive debt burden payday loans lenders.

The Dow Jones industrial average was up 30 points, or 0.2 percent, to 12,097 five minutes after the market opened. The S&P 500 rose 4, or 0.3 percent, to 1,265. The Nasdaq composite gained 16, or 0.6 percent, to 2,712.

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A ballot battle in Ohio that pits the union rights of public workers against Republican efforts to shrink government and limit organized labor’s reach culminates Tuesday in a vote with political consequences from statehouses to Pennsylvania Avenue.

A question called Issue 2 asks voters to accept or reject a voluminous rewrite of Ohio’s collective bargaining law that GOP Gov. John Kasich signed in March, less than three months after his party regained power in the closely divided swing state.

Thousands descended the Statehouse in protest of the legislation known as Senate Bill 5, prompting state officials at one point to lock the doors out of concern for lawmakers’ safety.

The legislation affects more than 350,000 police, firefighters, teachers, nurses and other government workers. It sets mandatory health care and pension minimums for unionized government employees, bans public worker strikes, scraps binding arbitration and prohibits basing promotions solely on seniority.

By including police and firefighters, Ohio’s bill went further than Wisconsin’s, which was the first in a series of union-limiting measures plugged by Republican governors this year as they faced deep budget holes and a tea party movement fed up with government excess. Democratic governors, including New York’s Andrew Cuomo and Connecticut’s Dannel Malloy, have also faced down their public employee unions in attempts to rein in costs.

That’s why labor badly needs a win in Ohio, said Lee Adler, who teaches labor issues at Cornell University’s New York State School of Industrial and Labor Relations.

“If the governor of Ohio is able to hold the line on the legislation that was passed, then it would be a very significant setback for public sector workers and public sector unions in the U.S.,” he said. “Likewise, if the other result happens, then it would certainly provide a considerable amount of hope that, with the proper kind of mobilization and the proper kind of targeting, some of the retrenchment that has been directed at public sector workers can be combated.”

Victory could also galvanize support and build energy within the Democratic-leaning labor movement ahead of the 2012 presidential election, a potential boon for President Barack Obama’s re-election effort.

We Are Ohio, the labor-backed coalition fighting the law, had raised more than $24 million as of mid-October _ more than Obama, John McCain and 18 other presidential contenders raised in combined Ohio contributions during the 2008 presidential election, according to Federal Election Commission data.

Building a Better Ohio, the business-fueled proponent campaign, has raised $8 million. Outside groups including FreedomWorks, Americans for Prosperity and the Virginia-based Alliance for America’s Future are also rallying support for the law. Their spending hasn’t been documented.

“This will eclipse any statewide candidate election in the history of the state, in terms of spending,” said Jason Mauk, a spokesman for Building a Better Ohio. “It’s an unprecedented campaign.”

Ohio voters favored repeal 57 percent to 32 percent, an Oct. 25 Quinnipiac University poll showed. But Mauk said the law’s backers are still cautiously optimistic they can win, and will continue through the weekend to carry the bill’s tea party-friendly message to voters.

“People are tired of government spending more than it makes, more than it collects, and they’re frustrated by the debt and deficit problem in Washington,” he said. “Voters clearly sent a message of concern (in 2010) and they’re demanding that government get its house in order, and that’s the platform John Kasich ran on. This is an effort to try to eliminate government excess and get spending under control.”

Kasich is ranked among America’s least popular governors, thanks in part to his fight against the unions. The former congressman, investment banker and Fox News commentator has traveled the state to rally voters to keep the law and appeared in pro-Issue 2 commercials paid for by Make Ohio Great, a project of the Republican Governors Association.

Voters are eager to help defeat the law because they felt disenfranchised by the process, said Melissa Fazekas, a spokeswoman for the opposition.

The bill was introduced, debated in the Legislature, passed and signed by Kasich in two months. GOP legislative leaders say they heard dozens of hours of testimony and Democrats proposed no amendments to the bill during deliberations.

After it passed, the law’s opponents easily gathered 1.3 million signatures for their ballot effort and now boast a legion of more than 17,000 volunteers of all political stripes.

“I’ve never been involved in something quite like this,” Fazekas said. “I’ve just never seen people so engaged and enthusiastic. I’ve seen situations before where people were willing to sign petitions, but on this issue people were literally grabbing petition booklets out of our hands and taking them out and circulating them.”

Adler said public schools and the post office are the last two big government entities not controlled by corporations, and so are primary targets of union-limiting efforts.

He said “everybody A to Z” will be watching the vote’s outcome because of the state’s long history as a political bellwether: “Ohio tells a story about America every time it votes.”

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U.S. workers increased their productivity this summer by the largest amount in a year and half, and they cost their employers less. The trend is good for corporate profits but not necessarily for job growth.

The Labor Department says productivity rose at an annual rate of 3.1 percent in the July-September quarter after two straight quarterly declines. Labor costs dropped at an annual rate of 2.4 percent in the third quarter, the first decline since late 2010 pay day loan lenders.

Productivity is the amount of output per hour of work. The big jump in productivity in the third quarter reflected the fact that economy had its best quarterly growth in a year while hours worked were little changed.

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MADISON COUNTY

Bangkok residents jammed bus stations and highways on Wednesday to flee the flood-threatened Thai capital, while others built cement walls to protect their shops or homes from advancing waters surging from the country’s flooded north.

“The amount of water is gigantic,” Prime Minister Yingluck Shinawatra said. “Some water must spread into Bangkok areas but we will try to make it pass through as quickly as possible.”

Some neighborhoods on the city’s fringes were already experiencing waist-high flooding, but central areas remained dry.

Flood waters breached barriers protecting Bangkok’s second largest airport on Tuesday, halting commercial flights and underlining the gravity of the Southeast Asian nation’s deepening crisis, which has seen flood waters inundate a third of the country and kill 366 people over the last three months.

Yingluck’s government declared a five-day public holiday on Tuesday in affected areas, including Bangkok, while the Education Ministry ordered schools to close until Nov. 7. Many anxious city residents were taking advantage of the holiday to leave the capital or prepare for a possible watery siege.

Panic buying of food and other necessities emptied the shelves of many supermarkets, and walls of sandbags or cinderblocks covered the entrances of many buildings.

Yingluck urged everyone in the capital to move their belongings to higher ground and warned that the city could be swamped if flood barriers at three key locations fail.

“If the three spots 100% free credit score… remain intact, the situation will improve. However, if we can’t protect one of the spots, then the surrounding areas will be flooded. In the worst case, if we can’t protect all three spots, all of Bangkok will be flooded,” she said.

A day earlier, she warned that the floods could range from 4 inches to 5 feet (10 centimeters to 1.5 meters) deep in the capital.

Thousands of people heeded advice to evacuate to official shelters, including many fleeing for a second or third time after their original refuges were overtaken by the flooding.

The exodus included hundreds of inmates from three prisons _ many on death row _ who were taken by bus from Bangkok’s northern suburbs to facilities in other provinces.

Residents living near Mahasawat Canal in western Bangkok evacuated on Wednesday after a rapid overnight rise in water.

“I decided to leave because the water came in very fast,” said Jong Sonthimen, a 57-year-old factory cleaner. A boat carried her and two plastic garbage bags with her belongings to a Buddhist temple, where pickup trucks waited to take residents to a safer area.

Last week, Yingluck ordered key floodgates opened in Bangkok to help drain runoff through urban canals to the sea, but there is great concern that rising tides in the Gulf of Thailand this weekend could slow critical outflows and flood the city.

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The personal computer industry, already reeling from depressed demand, has been dealt another setback: Massive flooding in Thailand has curtailed production of a critical component

Asian stocks opened lower Wednesday after Slovakia blocked a measure to expand Europe’s financial rescue program for heavily indebted countries.

The move sent markets south as worries intensified that a failure by Europe to contain its debt crisis could lead to a massive debt default by the Greek government.

Japan’s Nikkei 225 index dropped 0.7 percent to 8,716.13. South Korea’s Kospi fell 0.3 percent to 1,790.30, while Hong Kong’s Hang Seng fell 1.4 percent to 17,894.31. Benchmarks in Australia, Taiwan, Singapore and mainland China were also lower.

Slovakia’s parliament rejected a bill Tuesday that would have strengthened the powers of a regional rescue fund to help bail out strapped economies in the eurozone.

The 16 other countries that use the euro have already signed off on the bill, but the measure requires unanimous support.

There are ways around Slovakia’s opposition, but the move temporarily sets back efforts to address Europe’s debt jam, which has been the most important issue for financial markets for months.

Greece has been on the brink of defaulting on its debt for months. If that happens, it would hurt European and U.S. banks by decimating the value of Greek government bonds they own. Those banks would then be less likely to lend to each other and to businesses. That could plug up an already weak global economy, with implications for everything from bank stocks to international trade.

The decision came after U.S. stock markets closed. The Dow Jones industrial average ended down 17 points after moving between small gains and losses throughout the day.

The Dow lost 0.1 percent to close at 11,416.3. The Standard & Poor’s 500 index rose 0.1 percent to 1,195.54, and the Nasdaq composite rose 0.7 percent to 2,583.03.

Many market watchers think the volatility will continue until heavily indebted countries like Greece, Spain and Italy have established a clear path out of their current debt mess.

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Dow Chemical Co. and the Saudi Arabian Oil Co. say they’ve signed an agreement that advances their plan to build one of the world’s biggest chemical plants in Saudi Arabia. The $20 billion complex is expected to begin production in 2015.

The companies announced Saturday that they signed a joint venture agreement for Sadara Chemical Co., which will own the plant being built in the desert kingdom. It will generate an estimated $10 billion in revenue annually.

Dow and Saudi Aramco together are investing about $12 billion, and a portion of Sadara will be sold to shareholders in a public offering in 2013 or 2014. The complex, with 26 manufacturing units, will be the largest integrated chemical facility ever built in one go, the companies say.

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