Pfizer and Merck May Benefit From Spinoffs, Goldman Sachs Says
Stock Chart for Pfizer Inc (PFE)
Merck and Pfizer may boost their value by taking part in the trend as economic growth slows, Goldman Sachs analysts said in a report dated Nov. 30. At least 239 spinoffs were announced in 2011, the largest deal count in more than a decade, according to data compiled by Bloomberg.
Investors have pushed companies to raise cash and shed businesses that don’t fit with their strategies as U.S. corporate earnings rose at a slower pace in the third quarter. Kraft Foods Inc. (KFT), the world’s second-largest food company, and Tyco International Ltd. (TYC), the security-system maker, both decided this year to revamp their operations with spinoffs.
Drugmaker Pfizer said in July that it would explore options for its animal-health and nutrition businesses. Medtronic Inc. (MDT), Aeroflex Holding Corp. (ARX), Dean Foods Co. (DF), Sunoco Inc. (SUN) and Plains Exploration & Production Co. (PXP) also are among companies poised to profit from asset sales, according to the report.
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