Global business

American International Group (AIG) became the latest big financial outfit to ditch its chief executive. Martin Sullivan had been in the job for three years as the insurer became mired in regulatory probes and racked up some $30 billion in mortgage-related write-downs -- by far the largest amount for an American financial company, excluding banks. Sullivan's replacement is Bob Willumstad, AIG's chairman.

Goldman Sachs was praised for its plan to buy the assets of a $7 billion structured investment vehicle that collapsed in August. The vehicle had been managed by Cheyne Capital, a hedge fund based in London; investors viewed the restructuring of its portfolio and sale to Goldman as a sign that the credit crisis may be bottoming out.

The proposal by India's Reliance Communications to combine with South Africa's MTN suffered a setback with the eruption of a simmering feud between Anil and Mukesh Ambani, two of India's richest men. The brothers fell out after their father's death, eventually splitting his Reliance group of companies. Anil heads Reliance Communications and crafted the terms of a deal with MTN, which includes swapping a majority stake in his company. But Mukesh is claiming first refusal in any transfer of his brother's interest.

Retail sales in Britain jumped by 3.5 percent in May, fed by shoppers buying clothing in a spell of unseasonably warm weather. This may indicate that consumers are more resilient than economists assume. Food manufacturers in Mexico acceded to government requests to freeze prices on more than 150 staple products until the end of the year in an effort to curb inflation. The price of corn touched record highs after flooding in America's Midwest. Wheat prices also climbed, amid speculation that farmers would now have to replace lost corn by buying more wheat for animal feed.

Global music sales took another tumble last year, according to the IFPI, which represents the recording industry. A 34 percent increase in music sold online did little to compensate for the 13 percent drop in sales of CDs and music DVDs, which account for the bulk of the market. A PricewaterhouseCoopers report forecast that spending on all forms of recorded music will continue to decline as youngsters turn to other outlets.

Israel agreed to an Egyptian-brokered truce with Hamas, the Palestinian Islamist movement that runs the Gaza Strip. It is hoped that the truce will stop Hamas and other groups from firing rockets at Israel and that Israel no longer will carry out raids on Gaza. The Palestinians of Gaza also hope that the blockade imposed by Israel will gradually, if at first partially, be lifted.

The European Union huffed and puffed after Ireland's voters rejected its new Lisbon treaty. The Irish prime minister, Brian Cowen, was asked to explain the vote to an EU summit. Several leaders grumbled that a small country should not block a treaty backed by everybody else. Ireland was the only country to hold a referendum on Lisbon.

Nicolas Sarkozy presented the results of France's defense review. Troop numbers will be cut and some bases shut, but a new one is to open in Abu Dhabi. Sarkozy confirmed plans for France to rejoin NATO's military command structure next year.

At their first formal talks since 1999, China and Taiwan agreed to establish regular direct flights and to allow more tourists from the mainland to visit Taiwan. Meeting in Beijing, representatives from the two sides agreed that the service will begin on July 4, with 18 round-trip flights each weekend.

The United Nations said that coca cultivation in the Andean countries rose by 16 percent last year. The biggest increase was in Colombia, despite a massive government effort to eradicate the crop there.