99 million bottles of beer on the wall..
It looks like we have a winner. Well, a winning bid, anyways, that has SABMiller finally finally saying yes to ABInBev’s offer to scoop ’em up. After five tries, ABInBev offered up $106 billion for its fellow mega brewer. Now regulatory approval in the United States, and even China, is all that stands between final completion of the merger. That, and also shareholder approval which still might get in the way of meaningful fiscal relationship. Assuming the merger is approved, it will go down as one of the top five mergers. Ever. The newly formed company will control approximately a third of all the world’s beer (Heineken, the next biggest competitor, only controls 9% of the market) and puts Corona and Budweiser in the same corporate family as Miller and Grolsch. The new combo will handle 18 of the top 40 beers in the world. It’s a match, some would say, made in beer heaven. The two companies put out 77 billion liters of drinks and 150 billion pints last year. Once they merge, sales are expected to come in at about $55 billion. If, however, the deal does not go through, AbInBev has to hand over a $3 billion break-up fee. to SABMiller. Is that necessarily a bad thing?
Twitter is about to get a lot less chipper. Well, 8% less chipper, to be more precise. Just one week after re-assuming his CEO role, co-founder Jack Dorsey announced that Twitter will be trimming its workforce, eliminating 336 positions out of the 4,100 at the social media company. Those positions will be mostly from the product and engineering areas whose departments were already bloated. No lay-offs are expected of any executives. Apparently, the company is not bloated with them. Dorsey is on a mission to turn Twitter into a kindler gentler platform. Just kidding. He just wants to make the system more accessible because, believe it or not, not everybody finds Twitter that user-friendly. Who would’ve thunk it? It seems many users have signed up only to unceremoniously part ways with the micro-blogging tool shortly thereafter. In the process, Dorsey’s also hoping to make a lot of cash and do away with those bleak stagnant quarters that the company keeps churning out. Wall Street likes Jack Dorsey’s ideas so far and sent shares up almost 6%. Too bad the stock is down 30% for the year. Dorsey added, “The world needs a strong Twitter, and this is another step to get there.” I couldn’t have made that up if I tried.
Band-Aids and Tylenol and hep C, oh my!
Health care giant Johnson & Johnson has had better quarters. Especially much better than this past third quarter where the company saw a 29% drop in earnings and is now down 8% for the year. There is no band-aid big enough for that boo boo. As is the trend, the strong dollar gets part of the blame, or rather 8% of it. But at least the company is showing signs of recovery following a spate of recalls that go back to 2009, as its consumer health business posted some respectable digits. The company even plans to buy back $10 billion in common stock and increased its profit outlook by a nickel hoping to score between $6.15 – $6.20 per share for the year. Johnson & Johnson pulled in net income of $3.36 billion scoring $1.20 per share with over $17 billion in revenue. Unfortunately, analysts were looking for $17.41 billion in revenue and doesn’t even compare to last year’s net income of $4.75 billion figure that added $1.60 per share. Wall Street made sure to share its disappointment by sending shares down 71 cents a pop. The company also took a 90% beating on its hepatitis C, Olysio, drug since newer drugs to treat that hit the market. And even though sales of Tylenol and Motrin fell worldwide by 7.7%, here in the states, sales on those products increased almost 9%. And for that you are welcome, Johnson & Johnson.