BUSINESS BRIEFS
Pfizer seeks to diversify with $68B Wyeth deal
Advertiser News Services
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TRENTON, N.J. — No. 1 drugmaker Pfizer Inc. said yesterday it is buying No. 12 Wyeth for $68 billion in a deal that will quickly boost Pfizer's revenue and profit and transform it overnight into a more diversified company less reliant on its dwindling drug pipeline.
New York-based Pfizer managed with one stroke to overshadow a full house of issues: a 90 percent drop in income, a hefty charge to end an investigation, a severe cut in its dividend, a low profit forecast for 2009 and 8,000 job cuts that will start immediately.
That's all on top of the colossal problem triggering this deal: the expected loss of $13 billion a year in revenue for cholesterol fighter Lipitor starting in November 2011, when it gets generic competition.
Pfizer also plans to cut about 8,000 jobs, 10 percent of its workforce, as part of what it expects will be a staff reduction totaling 15 percent of the combined companies' workers.
"A lot of the turmoil that those acquisitions created hurt morale and productivity — there's no doubt about that," Pfizer Chief Executive Jeff Kindler conceded during a news conference.
"We're in a much better position to bring on board the scientists and programs and projects that Wyeth has," Kindler said.
EXISTING-HOME SALES RISE BY 6.5%
WASHINGTON — Sales of existing homes posted an unexpected increase last month, as consumers snapped up bargain-basement foreclosures in California and Florida, closing out the worst year for the U.S. real estate market in more than a decade.
Analysts, however, cautioned that prices are likely to keep falling through 2009, and said the outlook for home sales is highly uncertain.
If President Obama's administration enacts a plan to keep borrowers in their homes, analysts said, the number of foreclosures on the market could decline.
Sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November, the National Association of Realtors said yesterday. Without adjusting for seasonal factors, sales nationwide were up 1.1 percent from a year earlier.
LOW DEMAND SAPS CATERPILLAR PROFIT
PEORIA, Ill. — Caterpillar Inc.'s fourth-quarter profit dropped 32 percent as the global economic slowdown sapped demand for heavy equipment, forcing the company to lower its 2009 profit expectations and make further job cuts that will ultimately wipe out 20,000 positions.
Earnings for the world's largest maker of mining and construction machinery fell far short of expectations as customers pulled back on purchases of equipment used to mine quarries and help build homes, highways and offices.
FANNIE MAE NEEDS $16B IN FEDERAL AID
WASHINGTON — Mortgage finance company Fannie Mae said yesterday that it likely needs up to $16 billion from the government as conditions in the U.S. housing market continue to deteriorate.
Fannie Mae's disclosure that it expects an injection of $11 billion to $16 billion in taxpayer aid comes after sibling company Freddie Mac disclosed last week that it's likely to require as much as $35 billion in federal support on top of the $13.8 billion it received last year.
