KCP Income Fund, parent of KIK Custom Products, to be acquired by Caxton-Iseman Capital for C$804 million

KCP Income Fund (the "Fund" or "KCP") (TSX: KCP.UN) and Caxton-Iseman Capital, Inc. today announced that KCP has entered into a definitive agreement with an acquisition vehicle organized by Caxton-Iseman providing for the acquisition by Caxton-Iseman of all of the assets of KCP for a total acquisition cost of C$804 million. Immediately after completion of the acquisition the units of KCP will be redeemed for $10.00 per unit in cash. That value represents a 25.0% premium to the March 30, 2007 closing price, a 27.6% premium to the 10-day volume weighted average trading price, and a 35.1% premium to the trading price for KCP units immediately prior to the November 24, 2006 announcement that it would undertake a strategic process.

      The transaction is subject to the approval of the Fund unitholders (two-third approval and majority of minority), the receipt of regulatory approvals and other customary closing conditions. Closing of the transaction is scheduled to occur in June, 2007, unless extended in accordance with the agreement. A circular describing the proposed transaction will be mailed to Fund unitholders for a unitholder meeting (anticipated to be held in early June, 2007) to consider the transaction.

      KCP unitholders will continue to receive distributions for all months ending prior to the month in which closing of the transaction occurs. If closing occurs other than on a month end, KCP unitholders will also receive partial distributions for that month, provided that if closing occurs after the 15th day of the month, such partial distribution shall not exceed one half of the regular monthly distribution.

      The proposed transaction results from a strategic process initiated by KCP's board of trustees to identify and consider strategic alternatives available to the Fund to enhance unitholder value. Following the announcement of the Canadian federal government's intention to tax income trusts, KCP's board formed a special committee consisting of all independent trustees to oversee the strategic review process, and engaged TD Securities Inc. and Genuity Capital Markets to act as financial advisors. The process involved consideration of a full range of value enhancement alternatives and involved a significant number of interested parties.

      The board of trustees of KCP, on the recommendation of the special committee of independent trustees and having received fairness opinions from TD Securities Inc. and Genuity Capital Markets, has unanimously approved, and resolved to recommend that the Fund's unitholders approve, the proposed transaction.

      David Cynamon, the founder and CEO of KCP, has agreed to vote his units in favour of (and to sell such units into) the proposed transaction and will maintain a small ownership position in the Caxton-Iseman acquisition vehicle on the same basis as other Caxton-Iseman principals. Other members of KCP's management team will acquire a small stake in the Caxton-Iseman acquisition vehicle.

      James Arnett, Chairman of the special committee of the board, said: "After considering a wide variety of strategic alternatives and reviewing a range of initial transaction proposals from a number of interested parties, the special committee unanimously voted in favour of the proposed transaction. We feel that the present transaction ascribes full value to KCP's unique platform and leadership position in contract manufacturing and gives full credit for the company's growth opportunities. We believe this is an excellent outcome for unitholders."

      David Cynamon, Chief Executive Officer of KCP, said: "This transaction reflects the significant value that has been achieved through the vision, dedication and sheer hard work of KCP's extraordinary employees and executive team. This agreement is an ideal outcome for the process, as we will deliver immediate premium value to our unitholders in the form of cash."

      Frederick J. Iseman, Managing Partner of Caxton-Iseman, said: "KCP's management team has built an impressive company in two important sectors. From its roots as an acquiror of bleach manufacturers, KCP has transformed itself into North America's premier contract manufacturer, producing great products for many of the world's top consumer products companies and retailers. We look forward to working with KCP's outstanding management team to continue to build the company."

      Caxton-Iseman has received a commitment from J.P. Morgan Securities Inc., Credit Suisse and UBS to provide debt financing for the transaction.

      In connection with the transaction, KIK Acquisition Company, a wholly owned subsidiary of the Fund, anticipates commencing a consent solicitation to amend the terms of its exchangeable unsecured subordinated debentures (TSX:KCC.DB.U) to provide for an early redemption date. The acquisition agreement includes a non-solicitation covenant by KCP and related provisions customary for transactions of the nature proposed.

      TD Securities Inc. and Genuity Capital Markets are financial advisors to the KCP board in connection with the transaction. Heenan Blaikie LLP is legal advisor for the special committee, and Goodmans LLP is legal advisor for KCP. Caxton-Iseman's financial advisors with respect to the transaction are UBS Investment Bank and Atlas Strategic Advisors, LLC, and its legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Blake, Cassels and Graydon LLP.

      About KCP Income Fund

      KCP, through its operating subsidiaries KIK Holdco Company and KIK Operating Partnership, is one of North America's largest custom manufacturers of consumer products in the laundry, household cleaners, personal care, over-the-counter medicated and pharmaceutical categories, with 19 integrated manufacturing facilities and 4 Kem Krest distribution centers strategically located throughout North America. KCP's product lines include Laundry, Household Cleaners, Personal Care, OTC Medicated and Pharmaceutical, all supported by KCP's in-house technical expertise and value-added services. KCP produces leading consumer products for Fortune 500 companies including Albertsons, Colgate-Palmolive, Dial, Johnson & Johnson, Kroger, Loblaws, L'Oreal, Procter & Gamble, Safeway, SC Johnson, Sysco, Target, Unilever, Walgreens, and Wal-Mart.

      The Fund provides unitholders with monthly cash distributions. Trust units are listed on the Toronto Stock Exchange under the symbol KCP.UN.

      About Caxton-Iseman

      Caxton-Iseman Capital, Inc. is a New York-based private equity firm. Its portfolio companies include Ply Gem Industries, Inc., a manufacturer of vinyl and aluminum building products; Buffets, Inc., the largest buffet restaurant chain in the U.S.; Electrograph Systems, Inc., a leading national distributor of display technology solutions; Valley National Gases Incorporated, a leading packager and distributor of gases, welding equipment and supplies, propane and fire protection equipment; American Residential Services, LLC, a leading provider of HVAC and plumbing services; and Prodigy Health Group, Inc., a rapidly expanding health care services company. Caxton-Iseman's companies have combined revenues of approximately US$5 billion, EBITDA of approximately US$500 million and 75,000 employees. The firm's investment vehicles have available capital in excess of US$2 billion.

Schering-Plough to Acquire Organon BioSciences

Schering-Plough Corporation (NYSE: SGP) today announced that its Board of Directors has approved a transaction under which Schering-Plough will acquire Organon BioSciences N.V., the human and animal health care businesses of Akzo Nobel N.V., for approximately ¬11 billion in cash ($14.4 billion based on closing exchange rate on March 9, 2007). The transaction, which is expected to close by the end of 2007, is anticipated to be accretive to Schering-Plough's earnings per share (EPS) by about 10 cents in the first full year, excluding purchase-accounting adjustments and acquisition-related costs.

"With this transaction we take another major step in our Action Agenda to transform Schering-Plough into a global high-performance company for the long term," said Fred Hassan, chairman and chief executive officer, Schering- Plough. "It is the right deal at the right time as we accelerate into the Build the Base phase of our transformation."

"Organon BioSciences will be an excellent fit with Schering-Plough - strategically, scientifically and financially," said Hassan. "It builds on our growing strength in primary care, giving us immediate access to central nervous system (CNS) and women's health care products. The acquisition of Organon BioSciences also fills a gap in our late-stage pipeline by adding five compounds in Phase III development and a number of promising projects in Phase II development. And, we believe that the two cultures are very much in tune." Added Hassan, "In addition, the acquisition of Organon BioSciences enhances Schering-Plough's strength in human and animal biologic products, including the potential to develop human vaccines. In light of Schering-Plough's expanding early pipeline, Organon BioSciences's strong biologics manufacturing capability is a further important asset for the combined company. With this acquisition, Schering-Plough will become a leading animal health care company, with premier biologics capabilities."

Organon BioSciences provides Schering-Plough with a steadily growing base of products and businesses with top-line sales of nearly $5 billion. The pharmaceutical business, Organon, had sales of $3.4 billion in 2006 (based on closing exchange rate on March 9, 2007), including leading products such as Follistim/Puregon, a follicle-stimulating hormone for infertility; Esmeron/Zemuron, a muscle relaxant; and NuvaRing and Implanon for contraception. In addition, the animal health business, Intervet, with sales of approximately $1.5 billion in 2006, is one of the top three animal health care companies globally, with products treating a broad array of animals and disease states.

Financially, Schering-Plough expects the transaction to be accretive in the first full year, excluding purchase-accounting adjustments and acquisition-related costs. Schering-Plough expects to achieve annual synergies of $500 million; it will take three years from the closing to reach this level of synergies. Schering-Plough will finance the acquisition through a mix of cash, debt and equity.

"Given the complementary nature of our businesses and the track record of Schering-Plough's management team in executing transformational change, we expect a smooth and efficient transition that will allow us to unlock more value from the Organon BioSciences products and pipeline than would have been possible on a stand-alone basis," said Hassan. "We have great respect for the talented people of Organon BioSciences and look forward to working together as we continue on our path toward building a new kind of health care company," he added.

Commenting on today's announcement, Hans Wijers, chief executive officer, Akzo Nobel, said: "The sale of Organon BioSciences is a major milestone in the history of Akzo Nobel. It is a fundamental step towards our goal of creating a focused international industrial player. At the same time, we are convinced that we have found a good home for Organon BioSciences. While an independent future also offered potentially exciting possibilities, the partnership with Schering-Plough, one of the world's leading pharmaceutical companies, will give more scope to develop the unique capabilities of Organon BioSciences. We believe that this transaction delivers significant value for our shareholders, and also takes into account the interests of our stakeholders."

In addition to the currently marketed products, Organon BioSciences currently has five compounds in Phase III development, including:

• Asenapine, a novel psychopharmacologic agent for the treatment of patients with schizophrenia and acute mania bipolar disorder;
  
  
• Sugammadex, for the reversal of neuromuscular blockade induced during surgical procedures;
  
  
• NOMAC/E2, an oral contraceptive product containing nomegestrol acetate, a novel progesterone, and estriadiol, a natural estrogen;
  
  
• ORG36286, a long-acting recombinant follicle-stimulating hormone for infertility; and
  
  
• Esmirtazapine (ORG50081), for the treatment of insomnia and potentially for hot flashes in menopausal women.

Organon's research and manufacturing facility in Oss, the Netherlands, will be the center of Schering-Plough's global gynecology and fertility activities, while Organon's neuroscience research will continue in Newhouse, Scotland.

On the animal health side, this acquisition creates a leading animal health business based on 2006 sales. The businesses are strong and complementary. Intervet's products include Nobivac, a range of canine vaccines; Panacur, a de-wormer; Bovilis, a bovine biological for disease control and eradication; and Nobilis, a poultry vaccine to keep flocks free from infectious disease. Schering-Plough Animal Health has a strong business in treatments for cattle and companion animals, including products such as NUFLOR, an antibiotic for cattle, swine and fish; BANAMINE, an anti- inflammatory for cattle, horses and swine; and OTOMAX, a canine otic ointment. Schering-Plough Animal Health and Intervet will continue to operate at their existing locations. While maintaining the strong pharmaceutical leadership team and competencies in the United States, Boxmeer, the Netherlands, will become the headquarters of the global animal health business.

The transaction is subject to certain closing conditions, including regulatory approvals. Shareholder approval is not required for the transaction to be consummated by either Akzo Nobel or Schering-Plough. The parties have committed to execute a fully negotiated share purchase agreement upon completion of customary consultation procedures in the Netherlands, including with social partners.

Goldman Sachs & Co. acted as financial advisor to Schering-Plough, and Morgan Stanley acted as financial advisor to Akzo Nobel in this transaction.

About Schering-Plough

Schering-Plough is a global science-based health care company with leading prescription, consumer and animal health products. Through internal research and collaborations with partners, Schering-Plough discovers, develops, manufactures and markets advanced drug therapies to meet important medical needs. Schering-Plough's vision is to earn the trust of the physicians, patients and customers served by its approximately 33,500 people around the world. The company is based in Kenilworth, N.J., and its Web site is www.schering-plough.com.

About Organon BioSciences

Organon BioSciences is a globally operating biopharmaceutical company and wholly owned subsidiary of Akzo Nobel that develops, manufactures and markets products targeting selected therapeutic areas in human pharmaceuticals and covering a wide range of species in animal health. The Company's products enjoy leading positions in gynecology, infertility, selected areas of anesthesia and animal health. Organon Biosciences consists of two operating units: Organon is the human pharmaceuticals business and Intervet, the animal health business, is the third largest animal health company. Organon BioSciences markets its products on a worldwide basis in over 130 countries.

About Akzo Nobel

Akzo Nobel is a global FORTUNE 500 company and is listed on both the Euronext Amsterdam and NASDAQ stock exchanges. It is also listed on the Dow Jones Sustainability Indexes and the FTSE4Good Index. Based in the Netherlands, Akzo Nobel is a multicultural organization serving customers throughout the world with human and animal healthcare products, coatings, and chemicals. Akzo Nobel employs around 61,500 people and conducts its activities in four segments . human and animal health, coatings and chemicals . subdivided into 13 business units, with operating subsidiaries in more than 80 countries.

Kraft's Mary Kay Haben jumps to Wrigley

Wm. Wrigley Jr. Co. tapped longtime Kraft Foods Inc. executive Mary Kay Haben to serve as group vice president and managing director, North America.

The Chicago-based producer of chewing gum and candies said the 50-year-old Haben, who joins Wrigley after a 27-year-career at Kraft, "has a proven track record" for managing consumer goods businesses, and for "growing existing brands and developing new product and packaging innovations."

Haben has most recently been serving as Kraft's senior vice president of open innovation; prior to that posting she was senior vice president of global convenience meals, grocery and snacks sectors.

Under a global management plan recently spelled out by recently installed Chief Executive Officer William Perez, Wrigley has four regional managers who report directly to Perez.

Bayer Eliminating 6,100 Jobs Worldwide

 

Drug maker Bayer AG said Friday that it will cut 6,100 jobs, or 5.5 percent of its workforce, as it integrates Schering AG into its health care unit. More than half of the cuts will be in Europe, but about 1,000 positions will be eliminated in the United States.

Bayer acquired Schering last year in a 16.9 billion euro ($22.4 billion) deal and said it would have to cut thousands of jobs as the two companies combined operations. However, it left the details open until Friday.

Bayer employed about 100,200 people at the end of last year.

Bayer said the cuts would include 3,150 jobs in Europe, with 1,500 of those going in Germany. In addition to the U.S. cuts, another 1,200 jobs will be cut in Canada and Latin America, and 750 in Asia.

Bayer spokeswoman Meredith Fischer could not say how many of the job cuts would be in Pennsylvania; Bayer Corp. has its U.S. headquarters in Pittsburgh. But she expected the impact to be "very, very little."

The 1,000 jobs to be cut represent 800 announced in November, when Bayer HealthCare said it would close its research operation in West Haven, Conn., along with another 200.

All of the U.S. cuts are in Bayer's pharmaceutical division, she said.

In West Haven, Bayer is already in the process of closing its oncology research operations, where it has cut about 300 of approximately 1,000 jobs. Some of the remaining Connecticut jobs will be moved to New Jersey and New York, and others will be eliminated by 2008.

Fischer said the company hopes to reduce the effect by eliminating open positions and finding other spots within the company for displaced workers.

Bayer was West Haven's biggest taxpayer when the announcement was made last fall that the facility would be closed. The 137-acre campus, which has 1.6 million square feet of space in 17 buildings, is on the market.

Sweden to sell off Absolut vodka

Government sees sale of distiller, other ventures as a way to raise cash and lower the nation's debt

Thanks in part to its renowned advertising campaign, a vodka distilled in the southern Swedish town of Ahus has become the world's No. 3 premium spirit and one of the country's most recognizable brands.

So would the owner -- the Swedish government -- consider selling the crown jewel of Scandinavian liquor to a foreign buyer?

Absolutely.

After 90 years in state hands, Absolut vodka is about to be offered up for sale along with its parent company, V&S Vin & Sprit AB, as well as five other companies in which the state holds significant stakes. The government is to seek parliamentary approval for the V&S sale today.

With an estimated price tag of $5.7 billion, potential buyers include market leader Diageo PLC, Pernod Ricard SA and Fortune Brands, which already has a distribution deal with V&S.

"It's the best price that counts," said Financial Markets Minister Mats Odell.

The state sellout of banking group Nordea AB, telecom TeliaSonera AB, Nordic bourse operator OMX AB, real estate company Vasakronan AB and mortgage lender SBAB to help pay off the country's debt represents the biggest ideological shift since the center-right coalition government ousted the long-ruling Social Democrats in October.

The sale of V&S is especially sensitive, since the company founded in 1917 has been closely linked with the state's efforts to control alcohol consumption in Sweden. The government has held a monopoly on retail sales of alcohol since the 1850s and Sweden was able to preserve that even after joining the European Union, citing reasons of public health.

"We don't think that the state should run businesses on a competitive market," Odell said. "The state shouldn't make, sell or distribute vodka."

Critics say rushing to find buyers for V&S could leave the liquor maker in the hands of a profit-hungry company with no sense of social responsibility.

"Odell must show that another owner would be more restrictive, but I think it will be the opposite where a new owner will be more aggressive," said Thomas Ostros, industry minister in the previous Social Democratic government. "The state, as an owner, has developed one of the most successful brands that Sweden has. That's nothing to be ashamed about."

Selling V&S, however, might help dilute allegations about double standards in Sweden's nanny-state attitude on drinking. The Social Democrats were often criticized for promoting a restrictive alcohol policy at home, including bans on alcohol advertising in domestic media, while supporting multimillion dollar campaigns to market Absolut internationally since 1979.

Artists and designers such as Andy Warhol, Jean-Paul Gaultier and Gianni Versace have lent their talent to the bottle-focused ads that have appeared on billboards and magazines worldwide. Rock star Lenny Kravitz wrote a song specifically for an Absolut campaign.

With its range of flavors from peach to blackcurrant, Absolut is established as a luxury vodka -- a long journey from the first drops distilled from water and winter-wheat by Swedish entrepreneur Lars Olsson Smith in 1879.

V&S' product range includes other brands, such as Cruzan rum, Plymouth gin, a handful of Scandinavian aquavits and bitters and hundreds of wines. Absolut is believed to represent roughly half of the company's sales -- $1.48 billion in 2006.

The biggest single market is the United States, where Absolut is the top imported vodka. It's also growing quickly in Brazil, Canada, Britain and Germany.

V&S Chief Executive Officer Bengt Baron said a fair price for the company would be $5 billion to $6.4 billion. He declined to speculate on potential buyers.

"We want a long-term owner that shares our view of the future, which we are very optimistic about," Baron said.

Pierre Pringuet, chief executive of Pernod Ricard, has made no secret of his interest in V&S. But analysts say Fortune Brands is the prime candidate because of its distribution deal. V&S also holds a 10 percent stake in Jim Beam, the bourbon brand owned by Fortune Brands.

Absolut would also be an attractive addition to the company because "vodka, rum and gin categories are relatively weak for Fortune Brands," JP Morgan said in a research note.

Fortune Brands spokesman Clarkson Hine declined to comment on the V&S sale, but said the company was "extremely proud" of its partnership with V&S.

"We work very well together, our distribution joint ventures benefit both partners, and our close relationship has helped further build our respective brands," he wrote in an e-mail.

In any case, the new owner of V&S is likely to be an international liquor giant.

That did not concern bartender Daniel Lundberg as he mixed a drink with Absolut's new pear flavor in a Stockholm hotel. Lundberg, 22, predicted that a new owner would safeguard Absolut's Swedish identity.

"I don't think the brand will change just because it changes hands," he said. "It will still say 'Country of Sweden' on the bottle."

2007 Top Business Schools Ranked by US News & World Report

 

1. Harvard University (MA)
2. Stanford University (CA)
3. University of Pennsylvania (Wharton)
4. Massachusetts Institute of Technology (Sloan)

4. Northwestern University (Kellogg) (IL)

6. University of Chicago
7. Columbia University (NY)

7. University of California–Berkeley (Haas)

9. Dartmouth College (Tuck) (NH)
10. University of California–Los Angeles (Anderson)
11. Duke University (Fuqua) (NC)

11. University of Michigan–Ann Arbor (Ross)

13. New York University (Stern)

13.University of Virginia (Darden)

15. Yale University (CT)

16. Carnegie Mellon University (Tepper) (PA)

16. Cornell University (Johnson) (NY)

18. Emory University (Goizueta) (GA)

18. University of Texas–Austin (McCombs)

20. University of North Carolina–Chapel Hill (Kenan-Flagler)

21. Purdue University–West Lafayette (Krannert) (IN)

22. Ohio State University (Fisher)

23. Indiana University–Bloomington (Kelley)

23. Michigan State University (Broad)

23. University of Minnesota–Twin Cities (Carlson)

26. University of Rochester (Simon) (NY)

26. Washington University in St. Louis (Olin)

28. University of Illinois–Urbana-Champaign

29. University of Southern California (Marshall)

29. University of Washington

31. Texas A&M University–College Station (Mays)

31. University of Notre Dame (Mendoza) (IN)

31. University of Wisconsin–Madison

34. Arizona State University–Main Campus (Carey)

34. Brigham Young University (Marriott) (UT)

34. Georgetown University (McDonough) (DC)

34. Georgia Institute of Technology

38. Pennsylvania State University–University Park (Smeal)

38. University of California–Irvine (Merage)

38. University of Maryland–College Park (Smith)

41. Boston College (Carroll)

41. Southern Methodist University (Cox) (TX)

41. University of Florida (Warrington)

44. Boston University

44. Rice University (Jones) (TX)

46. University of California–Davis

46. University of Georgia (Terry)

48. University of Pittsburgh (Katz)

49. Babson College (Olin) (MA)

49. Tulane University (Freeman) (LA)

49. Vanderbilt University (Owen) (TN)

 

Blackstone to Acquire Pinnacle Foods for $2.16 Billion, Appoints Roger Deromedi as Chairman

The Blackstone Group (“Blackstone”), through its affiliates, announced that it has entered into a definitive agreement to acquire Pinnacle Foods Group Inc. (“Pinnacle Foods” or the “Company”), a leading manufacturer, marketer and distributor of branded food products in the United States and Canada, for approximately $2.16 billion in cash.

 

Roger Deromedi – former CEO of Kraft Foods Inc. – will assume the role of Chairman upon the closing of the transaction.  Mr. Deromedi will support the existing management team and brings 30 years of operating experience in the food industry, both at General Foods and Kraft. 

 

Mr. Deromedi commented, “I am pleased to be working with Blackstone and Pinnacle’s management team as they take the Company on its next phase of growth, both through internal development and selective acquisitions.”

 

“The men and women of Pinnacle Foods are extremely excited to partner with The Blackstone Group,” said Jeffrey Ansell, Chief Executive Officer of Pinnacle Foods and formerly a Corporate Officer at Procter & Gamble where he spent 25 years.  “Pinnacle’s portfolio of well-known brands has deep heritage and a strong consumer following, and we look forward to building and strengthening our iconic brands.”

 

Prakash Melwani, Senior Managing Director of The Blackstone Group, stated, “We look forward to working with Pinnacle’s outstanding management team to help them pursue their exciting growth strategy.”

 

Pinnacle Foods produces a number of leading consumer brands including Duncan Hines baking mixes, Vlasic pickles, Hungry Man and Swanson frozen dinners, Log Cabin and Mrs. Buttersworth’s syrups, Armour canned meat, Lender’s bagels, Aunt Jemima breakfast foods, Celeste pizza and Van de Kamp’s and Mrs. Paul’s seafood.  The Company employs more than 3,000 individuals, owns seven manufacturing facilities in the United States, and generates approximately $2.1 billion in annual gross sales.

 

Pinnacle Foods is jointly owned by affiliates of J.P. Morgan Partners, LLC, (CCMP Capital Advisors, LLC manages their investment in Pinnacle Foods), by J.W. Childs Associates, L.P., by CDM Group (an investment company controlled by Pinnacle Foods Board Chairman C. Dean Metropoulos), and by former bondholders of Aurora Foods Inc.

 

In addition to Mr. Deromedi and Mr. Ansell, Joe Jimenez – former Executive Vice President of H.J. Heinz Company – will join Pinnacle Foods’ Board as a Director following completion of the transaction.  Mr. Jimenez has more than twenty years of experience in the food industry at Heinz, ConAgra and The Clorox Company.

 

It is expected that a tender offer and consent solicitation will be made to repurchase Pinnacle Foods’ outstanding 8-1/4% Senior Subordinated Notes due 2013. 

 

Under the agreement and plan of merger executed today, an affiliate of The Blackstone Group is expected to merge with Crunch Holding Corp., the direct owner of Pinnacle Foods.  The owners of Crunch Equity Holding, LLC and the Boards of Directors of Pinnacle Foods and Crunch Holding Corp. have unanimously approved the transaction.

 

The transaction is subject to satisfaction of customary conditions and is expected to close in the first half of 2007.  Lehman Brothers is acting as financial advisor to Pinnacle and is providing acquisition financing for the transaction.  Centerview Partners and Blackstone Corporate Advisory are serving as financial advisors to Blackstone.  Simpson Thacher & Bartlett LLP is acting as Blackstone’s legal counsel.  Pinnacle’s legal advisor is Vinson & Elkins LLP.

 

About The Blackstone Group

The Blackstone Group, a global private investment and advisory firm, was founded in 1985.  The firm has raised approximately $75 billion for alternative asset investing since its formation of which over $30 billion has been for private equity investing.   Blackstone has recently made significant commitments to the food and beverage sector with investments in United Biscuits (leading manufacturer of biscuits in the UK) and Orangina (beverages).  Blackstone’s other core businesses include Private Real Estate Investing, Corporate Debt Investing, Hedge Funds, Mutual Fund Management, Private Placement, Marketable Alternative Asset Management and Investment Banking Advisory Services.

 

About Pinnacle Foods Corporation:

Pinnacle Foods Group, Inc. manufactures and markets branded convenience food products in the United States and Canada.  Its product range includes frozen dinners and entrees, frozen seafood, breakfasts, bagels, pickles, peppers and relish, baking mixes and frostings, and syrups and pancake mixes.  The company primarily offers its products through its broker network to traditional classes of trade, including grocery wholesalers and distributors, grocery stores and supermarkets, convenience stores, mass and drug merchandisers and warehouse clubs.  It also distributes its products through foodservice and private label channels.

The transaction is subject to satisfaction of customary conditions and is expected to close in the first half of 2007.  Lehman Brothers is acting as financial advisor to Pinnacle and is providing acquisition financing for the transaction.  Centerview Partners and Blackstone Corporate Advisory are serving as financial advisors to Blackstone.  Simpson Thacher & Bartlett LLP is acting as Blackstone’s legal counsel.  Pinnacle’s legal advisor is Vinson & Elkins LLP.

 

About The Blackstone Group

The Blackstone Group, a global private investment and advisory firm, was founded in 1985.  The firm has raised approximately $75 billion for alternative asset investing since its formation of which over $30 billion has been for private equity investing.   Blackstone has recently made significant commitments to the food and beverage sector with investments in United Biscuits (leading manufacturer of biscuits in the UK) and Orangina (beverages).  Blackstone’s other core businesses include Private Real Estate Investing, Corporate Debt Investing, Hedge Funds, Mutual Fund Management, Private Placement, Marketable Alternative Asset Management and Investment Banking Advisory Services.

 

About Pinnacle Foods Corporation:

Pinnacle Foods Group, Inc. manufactures and markets branded convenience food products in the United States and Canada.  Its product range includes frozen dinners and entrees, frozen seafood, breakfasts, bagels, pickles, peppers and relish, baking mixes and frostings, and syrups and pancake mixes.  The company primarily offers its products through its broker network to traditional classes of trade, including grocery wholesalers and distributors, grocery stores and supermarkets, convenience stores, mass and drug merchandisers and warehouse clubs.  It also distributes its products through foodservice and private label channels.

Sanofi Halts Takeover Talks With Bristol-Myers

Sanofi-Aventis SA, the Paris-based drugmaker, ended talks to take over Bristol-Myers Squibb Co. that would have given rise to the world's biggest pharmaceutical company, the London-based Times reported, without saying where it got the information.

The talks fell through because of Sanofi's objection to the market valuation of Bristol-Myers at about $28 a share, the Times said. Bristol-Myers shares, which started the year trading at about $26, have risen on reports of a possible takeover.

Another snag was legal disputes over Plavix, the world's second-best-selling drug, a blood-thinning treatment that the two companies jointly market, the Times said.

In a New York trial that began Jan. 22, Apotex Inc., a maker of generic drugs, is claiming that the Plavix patent is invalid and cannot be enforced.

Sanofi spokesman Jean-Marc Podvin declined to comment on the report in a telephone interview today because, he said, company policy prevents him from discussing the matter.

Cargill Names Its Next Chief

The agribusiness company Cargill said Tuesday that its chief executive, Warren R. Staley, would retire June 1 after reaching 65, the company’s retirement age for executives.

Mr. Staley will be succeeded by Gregory R. Page, 55, who has been Cargill’s president and chief operating officer since 2000.

The company, which is privately held, said Mr. Staley would remain chairman until its annual meeting on Sept. 11.

Mr. Page joined Cargill in 1974 as a trainee. He worked in the company’s United States animal nutrition business before transferring to Singapore in 1985 to run the animal nutrition operations in Asia. He returned to the United States in 1992. He began running Cargill’s North American and Australian beef and pork operations in 1995.

Mr. Staley became Cargill president in 1998, chief in 1999 and chairman in 2000. He has worked at Cargill since 1969.

Cargill employs 149,000 people in 63 countries.

General Electric pushes into biotechnology

G.E. Finds Strength in Its Diversity

Christoph Hergersberg stands before a wall-size diagram with far too many arrows, symbols and letters for an untutored eye to decipher. Skip to next paragraph

Christoph Hergersberg is the head of a biotechnology lab at General Electric. Mr. Hergersberg and his research team hope their imaging work will make the company a leader in the clinical diagnosis market.

It is a hodgepodge of the known biochemical pathways of the body — the way it makes DNA, for example, or turns sugar into energy. And it represents just a fraction of what goes on in living organisms. Mr. Hergersberg and his staff are trying to fill in some of the blanks, in hopes of finding genetic markers or other biochemical connections that could provide early alerts to cancer and other diseases.

Many scientists are doing that. But Mr. Hergersberg is running a biotechnology lab at General Electric, a company that people associate more with engines and finance than with genetic research. He is aiming to bring G.E. ever closer to a business in clinical diagnoses, “And that,” he said, “is a business G.E. definitely wants to be in.”

So are security, energy services, “green” products and many other areas that Jeffrey R. Immelt, G.E.’s chief since 2001, has singled out as the company’s growth platforms. He has jettisoned reinsurance and advanced materials, two slow-growth businesses, and the plastics business is on its way out.

He is also bolstering some of G.E.’s older businesses — in January, for example, G.E. spent $4.8 billion to buy the aerospace business of the Smiths Group, which adds control technology to the already thriving aerospace unit. But that same month he also spent $1.9 billion to buy the oil and gas operations of Vetco Gray, and $8.1 billion to buy a diagnostics business from Abbott Laboratories.

G.E.’s executives now face the task of integrating those mammoth acquisitions into the corporate fabric. But here at the company’s Global Research Center, the impact may be even more immediate: more acquisitions mean more technologies to tap into, for use in other businesses.

“The cross-business fertilization of research was marginal under Jack Welch, but Jeff has created an excitement and energy around the concept,” said Noel M. Tichy, a professor at the Ross School of Business at the University of Michigan, who has written extensively about G.E.

Examples abound. When G.E. decided to pursue the security business, its researchers immediately began adapting imaging technology from the health care division for use in scanning baggage. Another G.E. group is adapting lightweight carbon-and-plastic composites, originally developed for fan blades in aircraft engines, for use in windmill blades, some parts of power generators, and even for automotive parts.

Investors often favor the shares of companies that focus on one business area — “pure plays” in Wall Street parlance — over those of conglomerates. But scientists say that when it comes to research, the conglomerate structure is a strength.

Researchers at the University of California, San Francisco, are working with G.E.’s biotechnology lab to develop injectable agents that increase the sensitivity of magnetic resonance machines. They say the software and hardware expertise amassed in G.E.’s other businesses is helping immeasurably.

“G.E. brings a huge breadth of knowledge in information technology, imaging equipment and injectable agents,” said Sarah J. Nelson, a professor of bioengineering at the university, and head of the team that works with G.E. “Those interdisciplinary skills give G.E. an excellent chance of developing new biomarkers and genomic tools.”

Analysts say the diversity gives G.E. an edge in each new business. “G.E. is set up to transfer technologies from older businesses to all of their growth platforms,” said Deane M. Dray, an industrial analyst at Goldman Sachs.

That is certainly reflected in Niskayuna. A new 40-room lodge sits on the research campus, to accommodate visiting executives and customers. About 1,900 people work at Niskayuna, 19 percent more than in 2001. And another 700 are scattered through G.E.’s three offshore laboratories, in Bangalore, Shanghai, and most recently, Munich.

Until Mr. Immelt, G.E. had no biotech lab at all; today, more than 70 people work in that area. Mr. Hergersberg, like much of his research team, came on board in 2004, when G.E. acquired Amersham, which makes injectable substances that are used to improve images obtained during scans. Until that acquisition, imaging devices were G.E.’s main foray into health care.

But General Electric is not the only imaging company to see clinical diagnosis as a blockbuster market. Last year, for example, Siemens, a longtime rival in imaging, bought Bayer’s diagnostics division and a Los Angeles company called Diagnostic Products.

Now the companies are racing to make the research breakthroughs that will push them to the head of the pack. “We have billions of ‘letters’ of DNA,” Mr. Hergersberg said, “but so far, we can only read about 2 percent of the sentences those letters form.”

For now, the ability to parse those “sentences” is far too rudimentary for the biotechnology lab to worry much about applicability outside GE Healthcare.

But many of the older labs may soon face one downside of the interactive approach that Mr. Immelt has insisted on: when G.E. exits a business, it can leave a jagged hole in the company’s research network.

Once the plastics business is sold, for example, G.E. will have to join with another company to manufacture and distribute automotive plastics. It will have to go outside for the myriad plastic formulations and potential manufacturing processes that G.E.’s researchers in plastics electronics have tinkered with for several years. And, it will lose what Anil Duggal, a scientist on the plastic lighting project, calls “the market pull from the plastics side” — the easy dialogue it has had with customers who are looking to use plastics in new ways.

Still, under Mr. Immelt, G.E. has grown more amenable to joint projects with other companies. In January, it folded its security business into a joint venture with Smiths Group, whose aerospace unit it purchased. And it has formed a research collaboration with Eli Lilly to find ways to detect and treat Alzheimer’s disease.

At Niskayuna, just outside Schenectady, the emphasis is clearly on the science, not on the methods for commercializing it.

G.E. Finds Strength in Its Diversity

 

The walls of the research center’s lobby are adorned with pictures of dozens of G.E. scientists who each have more than 25 patents, with cases of medals and prizes they have won. And the anchor piece of the lobby is a desk — nothing special to look at, until you realize it was the one that Thomas Alva Edison was using when he helped found G.E. in 1892.

Skip to next paragraph The labs themselves are dealing more with the illusive future than the illustrious past, though. Almost every lab is working on some aspect of wind energy, for example. The composites lab is working on those lightweight carbon-fiber blades for windmills. The electronics specialists are seeking automatic controls to better coordinate demand and supply.

The electric power researchers are studying more efficient ways to convert the alternating current generated by windmills to a reliable source of direct energy that can move seamlessly onto utility grids, and perhaps ways to store excess energy when the wind is blowing particularly hard.

“We’re working with the Department of Energy, with the state of Hawaii, with local utilities, with everyone we can to see what technologies we can incorporate into better wind power,” said Juan de Bedout, a renewable energy specialist who manages the electric power and propulsion systems lab.

But perhaps most important for G.E., the labs are working closely with its businesses. G.E. executives rarely spent time at Niskayuna when John F. Welch Jr. was chairman; under Mr. Immelt, they visit four times a year. Joseph M. Hogan, chief executive of GE Healthcare, is a frequent visitor to the bioscience labs, while Scott C. Donnelly, the chief executive of the aviation business — and the former director of the research center — closely follows the composite work.

The frequent visits help the labs parcel out their results to many of the businesses simultaneously.

In the nanotechnology lab, for example, abracadabra moments occur often. A pool of black liquid contains tiny iron particles that jump up to a hovering magnet and form little “solid” spikes that, when touched, turn out to still be liquid.

A few feet away, researchers work to replicate on hard surfaces the water-repellent ability that nanoparticles impart to lotus leaves. Yet another experiment involves nanocameras that when positioned around a body and used in tandem, can take a much sharper picture of an organ than is yielded by the rotating single cameras in most imaging devices.

Those experiments might yield results that could lead to sharper images from M.R.I.’s, better ways to de-ice airplanes, and even to ways to detect substances that might be used by bioterrorists. In other words, they could yield products for G.E. businesses as diverse as health care, aerospace and security.

“Nanotechnology is letting us do things we never did before, in a huge number of areas,” said Margaret Blohm, who runs the nanotechnology research program.

G.E. hopes biotechnology can have a similar impact at the company. In a sense, it takes G.E. into uncharted territory. G.E. has always avoided products that enter the human body, since even small mistakes can be dire. But if Mr. Hergersberg’s crew is successful, G.E. will have an arsenal of substances for use in diagnostic imaging.

Mr. Hergersberg stops short of equating low risk to no risk. “The substances probably wouldn’t stay in the body long enough to trigger adverse reactions,” he said. It is a moot point, anyway. “Diagnoses and prevention are the future,” he said, “and that’s where we have to be.”