After suffering a decline in sales and popularity over the past decade, Unilever (UL) has sold its Slim-Fast brand to private-equity firm Kainos Capital. The company acquired Slim-Fast for $2.3B in 2000.
The financial terms for the sale weren't disclosed, however Unilever will still retain a minority stake in the business.
The conglomerate is slowly stepping away from its core foods portfolio, and has also sold its Ragu and Bertolli pasta-sauce business for $2.2B last month.
WSJ's Hester Plumridge reports on the reasons GlaxoSmithKline (GSK +4.6%) exits the cancer space despite its substantial long-term growth prospects.
The move enables the firm to focus on its core businesses in respiratory, HIV, vaccines and consumer health with the intent of improving operating margins. These four areas constitute 70% of its revenue. The remaining 30% is evenly split between its legacy products and metabolic/cardiovascular. It intends to retain the latter and divest the former.
The $16B sale of its cancer business to Novartis (NVS +1.5%) delivers substantial value for shareholders considering its relatively modest top line of $1.6B and the lack of promising immunotherapies. Glaxo ranks a distant fourteenth in market share with little hope of making headway versus the dominant players.
Earlier this month, Glaxo stopped the development of IMAGE-A3, its once-promising cancer vaccine. The firm will continue some cancer-related R&D but Novartis will have commercial rights to all future products.
With the inclusion of Novartis' vaccine business Glaxo is the global leader in market share and scale.
The consumer health joint venture will have the heft to compete more effectively with Reckitt Benckiser Group (RBGPF +0.1%), Colgate-Palmolive (CL -0.5%) and Unilver (UN +0.1%). Glaxo is the dominant partner with a 63.5% stake. It has the option of buying out its partners or selling its holdings in three years.
Glaxo expects to save ~$1.3B per year due to improved operational efficiency in vaccines and consumer health.
Morningstar's Ultimate Stock Pickers latest list of top 10 dividend yielding stocks is led by Philip Morris (PM), "a cash-generating machine... fortified by a bevy of powerful brands, a global manufacturing and distribution system, and... an addictive product set."
While 2014 is seen as an investment spending year at McDonald's (MCD), at least one analyst was reassured by the recent analyst day presentation which balanced discussions about growth and capacity initiatives with talk about returning value to shareholders.
Unilever (UN, UL) offers as much as $5.4B to boost its stake in its Indian unit Hindustan Unilever to a maximum of 75%. Unilever's 600 rupee/share bid is a 20.6% premium to Monday's close, but analysts say that may not be enough to entice foreign funds holding the shares to gain exposure to a hot Indian market. (PR)
The FDA is proposing two new food safety rules for foodborne illness prevention. The first rule would require food makers to develop a formal plan for preventing their food products from causing foodborne illness, and for correcting any problems that might arise. The second proposes enforceable, scientific-based safety standards for the production and harvesting of produce on farms.
Fears that the U.S. drought will drive up food prices next year are mostly unfounded, WSJ's Josh Mitchell writes, calculating the average consumer will spend only an extra $2.73/month. Food accounts for only ~14% of consumers’ daily living expenses, and given that prices for other items are falling or subdued, overall inflation likely will remain muted. (also)
Food price increases resulting from the Midwest drought that ravaged crops might not be as steep as some expect, according to some analysis. Fruit and vegetables crops are relatively stable due to irrigation, while corn ingredients typically only make up a a small portion of many common packaged food items. For the time being beef and milk prices could actually dip as farmers sell off cattle that they can't feed effectively, though next year consumers could take the hit when the dwindling number of cattle directly affects beef and dairy prices.
"The €1 Price Point." With about 20% of the population in Spain and Greece now below the poverty line, food companies such as Nestle (NSRGY.PK) and Unilever (UN) - hoping to reignite sales growth - roll out in Southern Europe packaging and tactics typically reserved for emerging economies.