Inmet Mining, Lundin Mining: Pooling Resources
Toronto-based mining companies Inmet and Lundin have agreed to merge and form a Canadian copper producer named Symterra, with a market value of about $9 billion. By pooling their global resources, the companies hope to produce more than 500,000 metric tons of copper annually by 2017. Prices for the metal are up 28 percent over the past 12 months, hitting a record $9,754 per metric ton on the London Metal Exchange on Jan. 4. The surge is fueling a rush of mergers and acquisitions among miners, with $87.8 billion worth of deals announced globally in the past 12 months, up from $43.5 billion a year earlier, according to data compiled by Bloomberg.
Yum! Brands: Shedding Brands to Focus on China
Yum! Brands (YUM), best known for its KFC, Taco Bell, and Pizza Hut franchises, plans to sell its Long John Silver's and A&W-All American Food restaurants to focus on expansion in China and other emerging markets. Nearly two-thirds of the Louisville-based company's business already comes from overseas. The two brands, which account for roughly 1,600 outlets in Yum's portfolio of 37,000 restaurants worldwide, will likely fetch a total of $150 million to $200 million, according to Credit Suisse (CS) analysts.
Cargill: Mosaic Is Up for Grabs
Cargill plans to divest its 64 percent stake in Mosaic (MOS), North America's No. 2 fertilizer producer, in a $24.3 billion transaction that will trigger no tax liabilities for either company. The agribusiness giant will exchange shares in Mosaic for its own stock and debt. Mosaic CEO Jim Prokopanko says his company could become a possible takeover target once the divestment is in motion. Rising global demand for food is spurring interest in agricultural-chemical companies. Last year, Australia's BHP Billiton launched a $40 billion takeover bid for Potash of Saskatchewan, the world's largest producer of the fertilizer component, only to be rebuffed by Canadian authorities.
Goldman Sachs: Drop in Trading Revenue Hits Earnings
Goldman Sachs' (GS) fourth-quarter earnings fell 52 percent, the third straight quarterly decline, as a slowdown in trading and investment banking reduced revenue more than analysts estimated. Full-year revenue was down 13 percent to $39.2 billion in 2010 from $45.2 billion in 2009, said the New York firm. The bank's reputation took a hit last year as client-trading revenue dropped 33 percent, from a record in 2009, and the bank settled a civil fraud lawsuit filed by the Securities and Exchange Commission. Goldman recently announced new business practices and changed its financial reports to separate client-trading revenue from gains and losses generated by bets with its own money.
GlaxoSmithKline: Billions More in Legal Costs
U.K. drugmaker GlaxoSmithKline (GSK) anticipates fourth-quarter legal costs of $3.5 billion because of a U.S. investigation into sales practices for certain products, as well as lawsuits related to its Avandia diabetes drug. The new charge brings the amount Glaxo set aside for legal costs in 2010 to roughly $6.4 billion. Once the world's best-selling diabetes medication, Avandia ran into trouble after regulators said it increases the risk of heart attacks. Analysts expect the company to report a loss for the fourth quarter when it releases results on Feb. 3.
On the Move
— Canada Post: Former Pitney Bowes (PBI) executive Deepak Chopra named CEO
— Citigroup (C): John Havens named president and COO
— Roche: Former ThyssenKrupp CFO Alan Hippe named CFO