Nestl

Arthi Gupta
23 Apr, 2012
New York City

The G-20 nations pledged $430 billion to the IMF. Nestl

[R]2:00 PM Frankfurt – The G-20 nations pledged $430 billion to the IMF. Nestlé agreed to acquire Pfizer infant nutrition business for $11.85 billion. Vodafone agreed to buy Cable & Wireless for $1.7 billion. AstraZeneca and Ardea Biosciences agreed on a merger deal of $1.26 billion.[/R]

The European indexes dropped after a week of positive advance in market sentiment after the euro area PMI fell to a 5-month low in April. Weak manufacturing data from China also added caution to the market sentiment.

Spain’s benchmark 10-year bond yield rose above the 6% level today.

China''s manufacturing activity shrank for the sixth straight month in April according to a private survey. The HSBC/Markit purchasing managers'' index rose to 49.1 in April from 48.3 in March.

The manufacturing output index rose to 49.1 in April from 47.3 in March.

The G20 nations pledged more than $430 billion to the International Monetary Fund and doubled its lending capacity to help build confidence and prevent crises from spreading in the euro zone.

The IMF plans to use this new reserve to increase lending to the euro zone nations and buy sovereign bonds, even though the statement from the multilateral agency said the funds will be available for all member nations.

The policies of the IMF in the past has been controlled by the European nations to advance their political agenda and failed to provide needed capital at the time of the Asian crisis.

In Paris trading, the CAC-40 Index declined 60.13 or 1.9% to 3,128.65 and in Frankfurt the DAX Index edged lower 184.51 or 2.7% to 6,565.03.

The yield on Spain’s benchmark 10-year bond climbed 0.07 percentage point to 6.04% and the Italian bond yields rose 0.09 percentage point to 5.76%.

In political news, French Socialist leader Francois Hollande and President Nicolas Sarkozy progressed to the second round of elections scheduled on May 6.

Hollande won the first round by securing 28.5% of votes while Sarkozy managed to get 27.1% votes National Front leader Marine Le Pen came third capturing 18.1% of votes.

Separately, the Netherlands may face another election after the opposition Freedom Party led by Geert Wilders withdrew its support to the country´s ruling coalition in protest at the government´s proposed austerity budget of nearly €10 billion.

The Dutch Prime Minister Mark Rutte will schedule early elections to seek approval for the budgetary cuts.

Euro-zone PMI Falls

Euro-zone private sector activity dropped in April, flash estimate published by Markit Economics showed.

The composite output index dropped unexpectedly to 47.4 in April from 49.1 in March.

The services Purchasing Managers'' Index fell to 47.9 in April from 49.2 in March. The manufacturing PMI fell to 46.0 in April, from 47.7 in March.

French Sentiment Drops

Confidence among France''s businesses slumped in April, a survey by the statistics office Insee showed today.

The headline synthetic index fell to 95 in April from a revised reading of 98 in March.

The indicator for general production expectations, which represents business leaders'' opinion on French industry as a whole, was at -14 compared to -15 in the preceding month.

Spanish GDP Shrinks

The Spanish economy shrank in the first quarter according to the latest data released by the Bank of Spain today.

Gross domestic product shrank 0.4% sequentially in the first quarter compared to the 0.3% drop in the fourth quarter of 2011.

From a year ago, gross domestic product fell 0.5% in the first quarter compared to the 0.3% growth in the fourth quarter of 2011.

Nestlé Agrees to Acquire Pfizer Baby Food Unit

Nestlé agreed to acquire Pfizer infant nutrition business for $11.85 billion. The infant business is estimated to gross $2.4 billion in 2012.

Vodafone to Buy Cable & Wireless

Vodafone Group Plc agreed to buy Cable & Wireless Worldwide plc for 38 pence per share in cash, representing a 92% premium to the closing price of 19.8 pence per CWW share on February 10.

The deal has a value of about £1.04 billion or $1.68 billion, the company said today.

AstraZeneca to Purchase Ardea Biosciences

AstraZeneca plc agreed to acquire Ardea Biosciences, Inc., the California-based biotechnology company for $1.26 billion. The acquisition includes Ardea''s lead product, lesinurad, for gout.

Under the terms of the agreement, AstraZeneca will acquire Ardea for $32 per share which represents a premium of 54% based on the closing price on April 20.

The transaction is expected to close in the second or third quarter of 2012.

Gainers & Losers

Eckoh PLC soared 3.6% to 11.40 pence after the speech recognition company won its first joint contract in the public sector with a two year agreement from Essex County Council.

Koninklijke Philips Electronics NV surged 4.6% to €15.00 after the Dutch consumer electronics maker said first quarter sales climbed 6.7% to €5.61 billion from €5.26 billion last year. Comparable sales grew 4%, led by 9% growth at its healthcare segment.

Net income in the quarter surged 81% to €248 million or 27 cents per share from €137 million or 14 cents per share the prior year.

Rolls-Royce Holdings Plc fell 1.6% to 818.50 pence after the defense contractor and aircraft engine maker said it won a $598 million contract from the U.S. Department of Defense for 268 AE 1107C engines for US Marine Corps and Air Force V-22 aircraft.

VimpelCom Ltd. dipped 0.1% to $10.19 after the provider of telecommunications services agreed to sell its entire indirect 49% stake in GTEL Mobile Joint Stock Co. in Vietnam and give up operational control of GTEL Mobile.