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Kraft divided by two
In a surprise move, Kraft (NYS: KFT) announced it would be splitting into two separate companies. The announcement comes after the company acquired Cadbury, making it the second largest global food company. The company said it had identified two different brands that would be best managed separately. After the divide, one company will hold the global snacks, including Kraft's European and developing markets operations, and the other will be the North American grocery business, with products like Kraft cheese and Maxwell coffee. The snack business has an estimated $32 billion in revenue with a strong outlook in growth and brand development. The grocery business has stronger margins, but it is expected to have consistent sales and revenue of $16 billion. Read more atThe Wall Street Journal.
GM profits at full speed
The largest auto maker in the country posted quarterly profits that more than doubled. General Motors (NYS: GM) had a net income of $2.52 billion, up from $1.33 billion for the same period last year. Coming out of bankruptcy in 2008, the company has been able to grow in strength, and it even got back into the stock market. Despite the strong quarter, the auto maker will face a difficult second half once Japanese auto makers get back on track after being sidetracked by the March earthquake.
Executives at the company have said they have implemented recession-proof policies to make the company stronger even in weak economic times. One of these measures is pushing toward smaller, more fuel-efficient cars like the Chevrolet Cruze. Read more atReuters.
Over the counter Lipitor
Feeling the threat of losing their patent protection, Pfizer (NYS: PFE) is looking to introduce an over-the-counter version of its cholesterol drug Lipitor. The best-selling drug in years, with an $11 billion haul each year, could face lower sales when generics are allowed to flow in to the market. The pharmaceutical company faces an uphill battle since the Food and Drug Administration has persistently refused to allow cholesterol drug called "stains" to be sold OTC. The agency's main concern is that consumers will not use the product properly without a doctor's guidance.
Changes from prescription to OTC have been rare in recent years, but there are a few examples: Johnson & Johnson's (NYS: JNJ) allergy medicine Zyrtec has been a success since it took to the shelves, after Pfizer's prescription version lost protection. Merck's (NYS: MRK) Claritin, another allergy medicine, generated $401 million sales in 2010, but its prescription version would exceed $3 billion annually. Read more atThe Wall Street Journal.
McArthur Coal's acquisition takes new turn
Peabody Energy Corp. (NYS: BTU) lowered its bid for McArthur Coal compared to last year, even as the company's profit is expected to double. Peabody, along with Arcelor Mittal (NYS: MT) , has offered $15.50 per share directly to shareholders even after McArthur's board demanded $18.00. McArthur is the largest producer of pulverized coal, even though flooding has stifled production. The coal producer's stock is trading higher than the offer in hopes of a better price, MacArthur's largest investor, Chinese Metals producer Citic Group could make a counterbid. Peabody's offer in 2010 was rejected after the Australian government proposed a tax on resource profits that could have hindered the business. Read more atBloomberg.
So there you have it, the top financial stories for this afternoon. Check Fool.com throughout the day for commentary on these and other stories. Also, follow us on Twitter, on Facebook, or through our email digests.
At the time thisarticle was published Michelle Zayedowns no shares of any companies mentioned in the story. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of General Motors, Johnson & Johnson, and Pfizer. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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