Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Novartis, Focused on Medicine, May Shed Gerber [Wall Street Journal]
Summary: Swiss pharma giant Novartis may sell its profitable Gerber baby foods unit to Nestle as part of a larger, $4-5 billion deal that would include a medical-nutrition business also held by Novartis. Profit margins on the slow-growth baby foods sector are an impressive 24% in the U.S. vs. 16% for all packaged foods (Morgan Stanley data), but Gerber faces increasing pricing pressures from competitors. Nestle, the world's largest infant nutritional products company, first tried to buy Gerber in 1984. Gerber controls fully 79% of the baby food market in the U.S.
Related links: Media coverage: Reuters . Commentary: Novartis: Strong Growth and Reasonable Valuation , Investors Infected With Vertex Fever Should Seek Healthier Stocks -- Barron's
Potentially impacted stocks and ETFs: Novartis (NYSE:NVS) • ETFs: Europe 2001 HOLDRs (NASDAQ:EKH) , BLDRS Europe 100 ADR Index (NASDAQ:ADRU)
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