Business Brief for December 15, 2005
Thursday, December 15, 2005
These are short blurbs about current events in the business world.
US trade deficit grows to record levels in October
The US trade deficit grew to record levels in October. Imports have climbed faster than exports despite dropping oil prices. The deficit has widened by $3 billion to the record $68.9 billion for the month. The deficit was forecasted by Wall Street to narrow. The nations huge trade imbalance has not begun to stabilize. The gap will effect the nations overall growth. Morgan Stanley has reduced its forecast of the nations growth to 3% from 3.4%. Merrill Lynch is going further forecasting just 2.3% growth. The deficit with China hit $166.8 billion, $2.3 billion more than the deficit with China for the entire previous year.
- Edmund L. Andrews. "Trade Deficit Hits Record, Threatening U.S. Growth" — , December 15, 2005
- Greg Robb. "Trade gap swells to record in Oct." — , December 14, 2005
Wal-Mart adds 140 outlets in Brazil
Wal-Mart has agreed to buy the Portuguese group Sonae SGPS SA's retail business in Brazil for about $757 million. Sonae's 140 stores with an annual revenue of $1.4 billion will double the amount of Wal-Mart stores in Brazil. The stores will continue to operate under their existing names. Wal-Mart has been expanding internationally and plans to open more than one-third of its stores overseas next year. This is the second acquisition for Wal-Mart in the last two years in the country. Last year the company bought Bompreco a 118 store supermarket chain for $300 million.
This new acquisition gives Wal-mart 295 outlets in the Brazil. Wal-Mart is the third biggest retailer in the country.
- Guillermo Parra-Bernal, Thomas Mulier. "Wal-Mart to Buy Sonae's Brazil Stores for $757 Mln (Update6)" — , December 14, 2005
- "Wal-Mart buys Brazil biz for $757M" — , December 14, 2005
Canadian trade surplus stable through October
Exports rose a tick to C$40.2 billion, the eighth consecutive increase, but imports increased even more—1.2%—to $33 billion. The net $7.17 billion is effectively unchanged since September. Imports from China have reached $24.2 billion as of October, like China's imports to the United States, have surpassed the total amount imported the entire previous year.
Amgen buys Abgenix, retains full rights to profits
Biotech company Amgen announced today that it will purchase Abgenix for $2.2 billion. Amgen and Abgenix co-developed a late-stage cancer drug panitumumab. The drug shows promise as a low-side effect alternative to Erbitux (marketed by ImClone Systems and Bristol-Myers Squibb).
The takeover means that Amgen will no longer have to split profits from the drug 50/50 with Abgenix. Amgen paid $22.50/share, 53.6% greater than today's closing price, but analysts state that the stock has enough potential to justify the high expenditure.
- Peter Kang. "Amgen Avoids Profit Sharing, Buys Abgenix" — , December 14, 2005