* America Online Inc. said in a memo to employees that it wants to remain independent and establish alliances with telecommunications and media companies. The online service distributed the memo a day after a Financial Times report said the nation’s biggest online service rejected a buyout bid from AT&T; Corp.
* Britain’s Cable & Wireless dropped the breach-of-contract lawsuit it had filed against MCI Communications Corp. to secure its bid to buy all of the long-distance company’s Internet business. After initially agreeing to sell Cable & Wireless its wholesale Internet business for $625 million, MCI now is seeking to sell the rest of its Internet services to win approval by regulators of its $2-billion takeover by WorldCom Inc.
* The Teamsters dropped its effort to unionize a Cleveland-area McDonald’s where workers organized the nation’s first strike against the restaurant chain. The union said it hadn’t received enough support from employees, but did not rule out another organizing effort.
* International Paper Co., the nation’s largest paper company, agreed to buy the money-losing distribution unit of Mead Corp., the seventh-largest, for $263 million, to cuts costs and offer more products. Acquisition of the unit, which had annual sales of $1.6 billion, will result in annual savings of about $100 million, the company said.
* Vencor Inc., the second-largest nursing-home operator in the U.S., said it will cut up to 1,100 of it 80,000 jobs to save more than $100 million a year as it gets ready for a change in Medicare payments.
* Monsanto and Delta & Pine Land Co. said the Justice Department has asked for more information on their proposed merger and has extended the waiting period during which the companies are prohibited from closing the transaction.