Loews Corporation is a conglomerate that operates in the United States and is headquartered in the city of New York. The company operates some businesses that include hotels, restaurants, CNA Financial Company, Boardwalk pipeline partners and diamond offshore drilling among others. Loews Corporation is a public company that is listed on the New York stock exchange as it regards itself as a value investor focusing on the long-term investment goals. The years between 1971 and 2012 saw Loews Corporation reduce its shares from 1.3 billion to 392 million shares. Many of its business interests are in the energy and financial sector where it has been acquiring other businesses as a way of its growth and value- oriented strategies (Datamonitor, p 2).
History of the Corporation
The history of the Loews Corporation can be traced back a long time ago in the year 1946 when its founder, Laurence Tisch, was able to convince his parents that it was a nice idea to invest $125,000 of their savings in purchasing a hotel that was located in Lakewood, New Jersey. After initially starting the hotel business on his own, Laurence Tisch was later on joined by his brother and they together formed a partnership that allowed increasing the number of their investments. The following few years saw smart investment moves from the brothers as they were able to re-invest the profits they got from the hotel business back into their hotel business. In 1956, the two brothers' where able to invest in their first hotel, which they called Americana and was located in Bal Harbor, Florida. This investment set them back $17 million which they paid in cash but with time it proved to be the wisest decision the two brothers ever came up with. That investment has grown to form one of the biggest corporations in the world with subsidiaries in many industries.
The legacy of Loew's started in the year 1959 when the two brothers bought shares in a theatre busi9nes known as Loew's theatres. They acquired a majority of the shares that enabled them to have a controlling majority in the affairs of the company. They, later on, bought the remainder of the shares in 1985 and owned the company fully. Overtime, the company's founders where able to coil their philosophy that enabled them to operate smoothly, that of value oriented. The value-oriented philosophy has continued to be the cornerstone of Loews Corporation today and guides the company whenever it is acquiring or investing in new markets (Regan , p 4). Over the years, the Loews Corporation diversified as it sought to acquire business in various sectors of manufacturing, services, financial and processing industries. For example, the founders acquired Lorillard, which is a tobacco company, and CNA Financial, a company that deals with offering financial services. Loews Corporation revenues were able to grow immensely because of acquisitions of other companies in the industry.
The later 1980s saw the company diversify its investments to energy sector by acquiring Diamond drilling and ODECO, later on combining the two companies to form the Diamond offshore drilling company. In 2003, Loews Corporation acquired Texas gas transmission, LLC and later on invested in Gulf South Pipeline Company, combining all the three companies to form Boardwalk pipeline partners. Boardwalk Pipeline Partners offer different services in the energy sector such as storing, transporting or processing if gases and liquids for its clients. Loew's Corporation sold Bulova watches, one of its sub diaries in 2007 stating that it was pursuing other strategic alternatives. These alternatives are believed to be the continued investing in the energy sector as the company was later on acquired Dominion Resources, a company that deals with exploration and production of natural gas and gas liquids in the energy industry.
Management of the Company
The corporations founders, the two brothers Laurence and Robert Tisch served as joined CEOs of the corporation until they retired in the year 1998. Their retirement was part of a greater plan of the company to shift from its traditional corporate leadership. After the retirement of the founders, the corporation appointed James Tisch as the company's president and CEO. Later on, the board of the company created the office of the president and appointed three members of the Corporation; James Tisch, Andrew Tisch, and Jonathan Tisch. The Tisch family controlled a majority of 21% ownership of the company, giving it a controlling stake.
The company's management is structured as follows;
CEO - James Tisch,
Presidents - James Tisch, Andrew Tisch, and Jonathan Tisch.
Co-chairmen of a board - Andrew Tisch and Jonathan Tisch.
Senior vice president - Kenneth Siegel
Secretary and general counsel - Gary Garson
CIO - Richard Scott
CFO - David Edelson
Currently, Loews Corporation trades at the New York stock exchange market with its share prices trading at $37.40, with highs of 42.59 and lows of 37.25. Loews Corporation's financial position can be viewed in two ways, strengths, and weaknesses. The company's strengths are witnessed in numerous areas, such as having a good cash flow and a solid financial position. The corporation has a firm financial situation and its debt levels are also reasonable. The weaknesses include its disappointing performance in the stock market where the prices of its shares have not been steady over time. The corporation's net income and return on equity has also been disappointing (Datamonitor, p 6).
Loews Corporation Competition
Loews Corporation has diversified a lot but currently focusing on insurance interests through its subsidiary CNA Financial holdings. The subsidiary also offers commercial property and casualty coverage as well. The main competitors in the industry include Transocean Ltd, American International group and the travellers companies Inc. Transocean does offshore drilling and has recently invested heavily in the sector upsetting Loews Corporation. The company operates in the world major drilling regions in Asia, Europe, Middle East and Africa. Transocean is also contracted by major clients including BP and Chevron.
American international group offer insurance services and is considered to be the largest insurance firm in the world. Another big advantage of the company is that it is constantly bailed out by the government whenever it has losses and is in middle of a problem. This works against Loews Corporation, which depends on financing itself to overcome such difficulties. The travelers company Inc. also offers insurance services and specializes in offering insurance services to homeowners and personal auto. The company is regarded as the largest in the provision of insurance services to commercial property to both individuals and businesses whether they are small or big in size. Traveller's company Inc. also offers fidelity bonds and also management liability coverage for commercial operations (Annual report , p 7).
Corporation, Loews. "Annual report ." loews corporation (2009): 3-9
Datamonitor. "Loews corporation ." Datamonitor (2010): 1-10.
Regan, Trish. "Loews CEO's plans for energy independence." Bloomberg (2013): 4-7.
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