Start the conversation
Pfizer Buys Wyeth for $68 Billion; Existing Homes Sales Rose 6.5%; McDonald's Posts 5.8% Sales Growth; Freeport McMoran Lowers Sales Targets; Lincoln National Corp Cutting Staff 5%; GM Cuts More Jobs, Production; Petrobras to Cut Costs by $4 Billion; Halliburton Settles Bribery Investigation
- Pfizer Inc. (PFE), the world's No. 1 drug maker, said yesterday (Monday) that it would acquire U.S. rival Wyeth (WYE) for about $68 billion in a strategic buyout that diversifies its revenue base. To help finance the deal, Pfizer said it would cut its dividend and use about $22.5 billion in debt that it raised from a consortium of global banks. The deal is key because it will help Pfizer cope with a major revenue gap that will emerge in 2011, when its blockbuster cholesterol-treatment drug, Lipitor, will begin to face U.S. generic competition, Reuters reported. Next year, Wyeth loses patent protection on its own top drug, the anti-depressant Effexor XR.
- Two measures of U.S. economic performance unexpectedly turned positive in December Bloomberg reported. The National Association of Realtors said sales of existing homes rose 6.5%, propelled by the biggest slump in prices since the Great Depression. Also, the index of leading economic indicators increased 0.3% reacting to an expansion of the money supply, the Conference Board said. The positive numbers are a sharp contrast to the tens of thousands of layoffs announced yesterday (Monday) which may accelerate the pullback in consumer spending and deepen the longest recession since 1982.
- McDonald's Corp. (MCD) reported softening in some overseas markets, but still managed to produce a quarterly profit that handily topped Wall Street estimates, Reuters reported. The company posted a 5.8% rise in worldwide sales in December at restaurants open at least 13 months, despite a U.S. recession that has spread to global economies. The world's biggest hamburger chain reported a slowdown in its German business due to price hikes and slower same-store sales in China, where growth has been red-hot. McDonald's said it was also hit by a stronger dollar in foreign markets, including Canada, Europe, Britain and Australia.
- Plummeting metal prices led Freeport McMoran (FCX) to lower projected copper and molybdenum sales targets for both 2009 and 2010 as it posted a gigantic net loss of $13.9 billion, or $36.78 per share yesterday (Monday), Reuters reported. But its shares rallied on Wall Street as the losses were primarily blamed on $14 billion in noncash charges, including writedowns of inventory values and goodwill from the acquisition of rival Phelps Dodge. Still, citing the worldwide construction slump, Freeport lowered its forecasts for copper sales by 9% and cut its outlook for molybdenum production by 25% for 2009.
- After posting five straight declines in quarterly profit, Lincoln National Corp. (LNC), the Philadelphia-based life insurer, said yesterday (Monday) that it is cutting 5% of staff, or about 540 jobs. North American insurers have announced more than 5,000 job cuts over the past two years as the industry reported at least $125 billion in losses and writedowns tied to the collapse of the U.S. mortgage market, Bloomberg reported. The insurer's third-quarter net income plunged 55 percent to about $148.4 million. Fourth-quarter results are scheduled to be released Feb. 9.
- General Motors Corp. (GM) said it will eliminate shifts in the second quarter at Ohio and Michigan plants, a move that will shed about 2,000 jobs. The carmaker will also cut production at 13 other U.S. and Canadian plants, Bloomberg reported.
- Brazil's state-controlled oil company, Petroleo Brazileiro SA (ADR:PBR), said it will seek to cut costs by as much as $4 billion annually. Officials said the move is necessary for its plans to double output and develop the Americas' largest oil-field discovery in the past three decades, Bloomberg reported.
- Halliburton Co. (HAL) will pay $559 million – $382 million to the Department of Justice and $177 million to the Securities and Exchange Commission – to end an investigation into its KBR Inc. unit. The unit allegedly bribed Nigerian officials for as much as 20 years, Reuters reported.