3M Sells Pharma Business for $2.1 B

Elena
09 Nov, 2006
New York City

Graceway Pharmaceuticals Inc. agreed to acquire 3M''s pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB agreed to buy 3M''s pharmaceutical business in Europe for $857 million. And Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million.

[R]8:00AM 3M Co. agreed to sell its pharmaceutical business for $2.1 billion.[/R]
3M Co. ((MMM)), manufacturer in the health care, telecom, and transportation sectors, announced it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. The deals are part of a strategic review the company revealed in April. Graceway Pharmaceuticals Inc. agreed to acquire 3M''s pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB agreed to buy 3M''s pharmaceutical business in Europe for $857 million. And Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million.

1,050 people work in 3M''s worldwide pharmaceuticals unit. About 70%, or 735, of them will be given employment opportunities with the acquiring companies. The deals are subject to regulatory clearances. 3M said the deal is expected to complete in the fourth quarter. In addition, it said it would record a gain on the transactions, and will incur charges as restructuring further cintinues.


[R]7:30AM Asian stocks finish mixed Thursday, Japan, Australia fall.[/R]
Asian markets finished mixed on Thursday. The Nikkei 225 Index fell 0.1% to 16198.57. Internet and telecom company Softbank Corp. rose 1.1% after reporting strong quarterly profit results. KDDI, cellular operator, rose 2.4% after posting strong subscriber growth in October. NTT DoCoMo, the biggest cellular operator in Japan, traded flat. Shares of Toyota rose 0.2%, extending gains after closing at a life-time high in the previous session.

Hong Kong Hang Seng Index ended 0.8% higher at 18952.86. Oil-related, property and tech stocks lifted the stock market. China largest offshore oil producer, Cnooc, rose 2.2%, while mainland refiner Sinopec rose 1.6%. In the property sector, property developer Cheung Kong Holdings gained 0.6%. Tech shares also helped Hong Kong, with China Mobile, the second biggest large-cap by value, up 1%. Shares of Lenovo Group, the third-largest computer maker in the world by market share, jumped 3.8% ahead of its earnings report due after the market close.

Australia S&P/ASX 200 fell 0.6% to 5429.00. The market fell after the central bank raised rates a quarter point, on Wednesday, to 6.25%, its third increase this year, in a setback to the government. Oil and mining shares declined, with Australian-listed miner BHP Billiton down 0.7%. Bucking the trend, Woodside Petroleum and Santos rose 1% on higher oil prices.

The Kospi index in South Korea jumped 1.4% to close at 1399.44 and Taiwan Weighted Price Index slipped 0.4% to 7151.13. In South Korea, the stock market ended higher helped by a Bank of Korea decision to keep its benchmark overnight call rate steady, and strong construction and banking issues. In Taiwan, shares fell slightly on profit-taking after gains early in the session. New Zealand NZX-50 Index set a fresh record close, eclipsing a record peak set Wednesday, gaining 0.1% to 3823.01.


[R]6:30AM Strong earnings and US stocks give European markets a boost.[/R]
European markets were broadly higher in early trading on Thursday. By mid morning, the FTSE 100 in London nudged lower to 6,233.6, Frankfurt Xetra Dax gained 0.2% to 6,361.94 and the CAC 40 in Paris added 0.2% to 5,447.92.

Advancers

Sampo led the advancers after it agreed to sell its banking division Sampo Bank to Danske Bank. Sampo shares were up 8.5%. Danske, which plans an equity issue fell 5.5%.

Banks were mixed however, with Piraeus Bank of Greece up 1.3% after reporting better-than-expected results on Wednesday. Domestic rival EFG Eurobank was up 2%.

Allied Irish Banks gained 2.3% after its Polish unit Zachodni WBK reported a 29% rise third-quarter profit, boosted by mortgage sales

Inbev, the Belgian brewer, gained 3.5% after reporting a 25% jump in third-quarter net profit, beating expectations thanks to strong growth in Latin America and eastern Europe.

Shares in Numico rose 4% after the Dutch food group announced a better-than-expected 25% rise in third-quarter operating profit.

Decliners

Adidas was at the bottom of the pile, falling 8.4%, after it issued a surprise profit warning. The German sportswear maker cut its 2007 profit forecast after higher spending on its US Reebok division, whose profit growth will now be lower than originally forecast.

Spanish power generator Iberdrola fell 2.3% after it said it was studying a possible bid for for the Scottish Power. Rumours valued Scottish Power at 12 billion pounds. The UK company shares gained 3.8%.

Oil and gold

Oil prices rose above $60 a barrel Thursday in reaction to figures showing lower U.S. gasoline and diesel fuel inventories and to leadership changes in the U.S. Congress following midterm elections. Light, sweet crude for December delivery rose 40 cents to $60.23 a barrel by midday in Europe in electronic trading on the NYME. December Brent crude on London ICE Futures exchange was up 73 cents at $60.32 a barrel.

Gold opened Thursday at a bid price of $617.60 a troy ounce, down from $623.60 late Wednesday.

Currencies

The euro advanced to a record against the yen and rose versus the US dollar on speculation the European Central Bank will increase interest rates to damp inflation. The euro reached 150.81 yen, an all-time high, and was trading at 150.76 yen in London, from 150.34 late in New York yesterday. It traded at $1.2785 from $1.2757. Against the dollar, the British pound was at $1.9064 at 10 a.m. in London from $1.9055 yesterday. It was also at 67.03 pence per euro, from 67.00. The dollar was trading at 117.90 yen by mid-afternoon in Tokyo, up from 117.73 yen from late Wednesday in New York.