AB InBev's sells Central European Operations to CVC

Brewer Anheuser-BuschInBev will sell its operations in Central Europe and the Balkans to private-equity firm CVC Capital Partners for $1.62 billion in cash, plus bonds and minority shares that bring the value of the deal to $2.23 billion.

The deal puts AB InBev, the world's largest brewer, solidly above a target it set last year of selling at least $7 billion in assets after buying U.S. brewer Anheuser-Busch for $52 billion. AB InBev executives made the pledge while taking on $45 billion in debt to buy Anheuser, in an effort to keep the brewer's investment grade credit rating while it pays down some of that debt.

The operations include regional beer brands and a few more well-known ones, such as Staropramen. AB InBev stands to make up to an additional $800 million on CVC's return on its initial investment. CVC will rename the operations StarBev.

The operations being sold are located in Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Romania, Serbia and Slovakia. Together they comprise less than 3% of the brewer's total earnings before interest, taxes, depreciation and amortization, analysts estimate.The markets in those countries are small and rely on a number of different breweries. That appears to conflict with AB InBev's strategy of focusing on large markets, such as the U.S., Brazil, Russia and Ukraine, where it can operate large distribution networks and a few big, efficient breweries.

"I can understand the logic, but it's a pity that they give up a little of their emerging market profile," said Petercam analyst Kris Kippers. "If you look at the price they get it's very nice," he added.

AB InBev will receive $1.62 billion in cash for the Central and Eastern Europe assets. AB InBev will also receive a $448 million unsecured deferred payment obligation from CVC with a six-year maturity that can be extended 2 years, paying interest at between 8% and 15%. Finally, AB InBev will get $165 million in minority interests.

AB InBev will have a right of first offer to buy back the business if CVC wants to sell it in the future. CVC will also brew and/or distribute Stella Artois, Beck's, Löwenbräu, Hoegaarden, Spaten and Leffe -- AB InBev's main brands in Europe -- in the countries where AB InBev is selling those assets, AB InBev said.

The sale comes on the heels of AB InBev's agreement to sell its theme parks business to the Blackstone Group for up to $2.7 billion, including a cash payment of $2.3 billion.

Anheuser-Busch, PepsiCo partner on purchasing

Onyx Pharmaceuticals Agrees to Buy Proteolix

Drug maker Onyx Pharmaceuticals Inc. agreed to acquire privately held Proteolix Inc. for $276 million cash plus potential milestone payments, giving Onyx a foothold in what it estimates to be a $16 billion market for blood-cancer drugs.

The deal could fill what Wall Street has perceived to be a hole in Onyx's research pipeline, giving it access to Proteolix's experimental drug carfilzomib, which is being studied in midstage, or Phase 2, clinical trials for people with multiple myeloma.

Onyx, of Emeryville, Calif., currently co-promotes Nexavar, a treatment for kidney and liver cancers, with Bayer AG, but a recent study of the drug in breast cancer had disappointing results and illustrated how continued sales growth for the drug might be difficult. Also, Onyx has had a relatively thin pipeline of additional drugs with potential to hit the market in coming years.

Onyx shares rose $1.51, or 5.6%, to $28.41 in late-afternoon trading Monday, as investors were pleased with the deal's financial structure and its potential to brighten the company's prospects.

Under the deal, Onyx will pay $276 million in cash for Proteolix at closing, which is expected in the current quarter. The company also agreed to pay an additional $40 million next year if the drug reaches a development milestone and as much as $535 million if it receives regulatory approvals in the U.S. and Europe. Of the $535 million, about $170 million is conditioned upon accelerated approval by the U.S. Food and Drug Administration.

Investors had been expecting Onyx to make some sort of deal because the company raised about $310 million in a securities offering in August. "Investors appear relieved that the upfront payment is digestible and the asset has a reasonably high chance of reaching the market," Morgan Stanley analyst Steven Harr wrote in a research note Monday.

Carfilzomib is called a proteasome inhibitor, which blocks the effect of a protein complex that helps tumor cells survive and grow. It is similar to Velcade, a blood-cancer treatment co-marketed by Johnson & Johnson and Takeda Pharmaceutical Co.

Sara Lee to hire new Chairman

PepsiCo Taps Foss to Lead Combined Bottling Unit

Head of Firm's Biggest Independent Bottler Will Manage Integration and Help Pose Bigger Challenge to Coke

PepsiCo Inc. chose the head of its biggest independent bottler to lead the combined North American bottling unit when it's rolled into the company early next year, advancing a showdown between PepsiCo's new integrated business model and Coca-Cola Co.'s traditional franchise system.

The executive, Eric J. Foss, will report directly to PepsiCo's chairman and chief executive, Indra Nooyi, whom he battled for more than three months over the price and terms of PepsiCo's acquisition of its two biggest bottlers. The Purchase, N.Y.-based food-and-beverage giant agreed in August to pay $7.8 billion for the shares it didn't already own of Pepsi Bottling Group Inc., led by Mr. Foss, and PepsiAmericas Inc., led by Robert Pohlad.

By taking its big U.S. bottlers in house, PepsiCo has said it will be able to cut costs and deal more directly with stores, helping to strengthen its dominance over Coke in noncarbonated drinks.

Analysts praised the selection of Mr. Foss, especially since it wasn't certain he would take the job if it was offered. Mr. Foss had already served as CEO and chairman of Pepsi Bottling, a public company with $13.8 billion in annual revenue, so it was unclear whether he would want to work for someone else, particularly after the testy negotiations.

But Ms. Nooyi said that the rancorous deal negotiations "were in the past" and that Mr. Foss brings continuity and stability to the new unit, as well as a necessary attention to detail. "Eric Foss is the best of the best," she said. "He's the operator's operator."

The choice of an experienced operator will put additional pressure on Coca-Cola, which would benefit from any disruption tied to the integration. The Atlanta beverage giant relies on large, independent, publicly traded bottlers to distribute the bulk of its drinks in the U.S. Coke Chairman and Chief Executive Muhtar Kent has said he's committed to the franchise model, and he praised Coke's improved collaboration with its bottlers, especially on a joint supply chain.

Mr. Foss has a reputation for managing details, from getting displays in stores to wringing out pennies per case in savings.

"The bottom line is that with PepsiCo pouring $8 billion into this deal, it's essential they do it right," said John Sicher, editor and publisher of Beverage Digest, an industry publication. "Eric's appointment goes a long way to insuring that."

Mr. Foss, 51 years old, is a 27-year veteran of PepsiCo and its affiliates. He worked for PepsiCo before it spun off Pepsi Bottling in a 1999 public offering. He was named that company's CEO and a board member in July 2006, and its chairman in 2008.

Mr. Foss's initial task will be to guide the integration of the bottling unit. In the long run, his unit will be expected to improve delivery to big customers like Wal-Mart Stores Inc., to better incubate and deliver relatively small juice and tea lines, and to help boost once-hot Gatorade.

PepsiCo said an advisory committee will help oversee the bottlers' integration, which is awaiting regulatory approval. Committee members include Mr. Foss, Mr. Pohlad, Ms. Nooyi and Craig Weatherup, former head of Pepsi Bottling.

In another management decision disclosed Monday, PepsiCo named Frito-Lay marketing executive Jaya Kumar as president of its Quaker division.

TOLMAR Holding, Inc. is a private pharmaceutical company. TOLMAR, Inc. is a Colorado-based pharmaceutical research, development, manufacturing and commercial operations company. TOLMAR is responsible for the development and manufacturing of 18 prescription pharmaceutical products dispensed in the U.S. The company's dental division manufactures and distributes dental products designed to treat adult periodontal disease.

Abbott to Buy Solvay Drug Unit for $7 Billion

Unilever to Buy Personal Care Business of Sara Lee

Unilever said Friday that it will acquire personal-care brands from Sara Lee Corp. in a €1.28 billion (about $1.9 billion) deal, cementing its grip on the deodorant and skin-cleansing market.

The acquisition, the Anglo-Dutch company's first since its Chief Executive Paul Polman took the reins in January, adds the Sanex, Radox and Duschdas brands, among others, to Unilever's stable of products including Dove, Axe and Rexona. It also produces Ben & Jerry's ice cream, Dove soap, Lipton teas and Hellmann's mayo.

Mr. Polman said in a statement that the Sara Lee brands "enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever's existing business."

Unilever said the deal will strengthen its operations in Western Europe and Asia and added it sees "significant potential" in building the newly acquired brands in developing and emerging markets. A Unilever spokesman said the Sara Lee brands have solid market share in France, Germany, the Netherlands, the U.K. and Denmark.

The Sara Lee brands generated annual sales of more than €750 million and earnings before interest, tax, depreciation and amortization of €128 million for the year ended June 30.

Investec Securities analyst Martin Deboo said Unilever's deal looks strategically sensible because it plugs gaps in the company's portfolio at a good price.

A Unilever spokeswoman said 85% of the personal-care brands acquired offer a "perfect strategic" fit with its existing brands. "We may in the future sell some of the smaller acquired brands, but this is something that we will look at later," she said.

ING Wholesale Banking analyst Marco Gulpers forecasts annual synergies from the deal of €50 million and expects the personal-care business to lift Unilever sales in Western Europe by 5%, giving the Anglo-Dutch company a leading position in Western Europe.

Unilever said it is too early to comment on synergies and whether any factories would be closed or jobs lost.

The deal is subject to regulatory approval and consultation with European employee works councils, which is expected to take a "number of months," the Unilever spokesman said.

Separately, Sara Lee Chief Executive Brenda Barnes said Friday that selling the brands, about half of its household and body-care business, to Unilever "will have an impact" on the Downers Grover, Ill., company's tax rate in the future. But a lot of the affect on the Sara Lee's tax rate would be "driven by use of proceeds," she said.

The company also said that the board of directors authorized a plan to repurchase about $1 billion of Sara Lee shares.

The deal, which is expected to be completed next year, would have a tax rate of about 15%, Ms. Barnes said. Investors should have "no fear of us doing something that's not the right answer" and not in shareholders' best interest, she added.

Sara Lee also said it has received "significant interest" in the remainder of its household business and is continuing to pursue sale options for the unit, which includes air care, shoe care, insecticides and non-European cleaning brands.

Sara Lee announced in April said it was exploring options for its international household and body-care business, including a possible sale, after receiving interest in the division. In August, it said it was continuing to consider "all alternatives" for the segment, including a divestiture. The company has been restructuring since 2005, spinning off or selling slower-growth businesses.

Sara Lee hires new CFO

Blackstone & Lion Capital in Talks to Sell Orangina to Suntory

Japanese beverage giant Suntory Holdings Ltd. is close to a deal to acquire Orangina SAS, maker of the famed soft drink, people familiar with the matter say.

A deal for Orangina, which could be reached this week, would mark the latest ownership twist for closely held Orangina, which bottles, distributes and franchises a range of soft drinks in Europe. The precise price couldn't be learned, but these people said it is likely to exceed the $2.6 billion that private-equity owners Blackstone Group LP and Lion Capital paid for it in 2006.

The talks are at a delicate stage, and a deal isn't guaranteed. Should it be consummated, it would mark the second time this week that a substantial European consumer deal surfaced after Kraft Foods Inc. launched a $17 billion offer for Cadbury PLC of the U.K. The potential deals show that after a period of inertia, the global mergers-and-acquisitions market may be coming back to life.