Zacks Analyst Blog Highlights: UBS AG, Credit Suisse Group, Sanofi-Aventis, Chattem Inc. and Marsh & McLennan Co. Inc. - Press Releases
For Immediate Release
Chicago, IL – December 23, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: UBS AG (UBS), Credit Suisse Group (CS), Sanofi-Aventis (SNY), Chattem Inc. (CHTT) and Marsh & McLennan Co. Inc. (MMC).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Tuesday’s Analyst Blog:
Swiss Banks May Raise Liquidity
Swiss banks UBS AG (UBS) and Credit Suisse Group (CS) may need to raise their liquidity levels. The two Swiss banks may need to retain 45% of their customers’ deposits as the Swiss regulator intends to increase their liquidity requirements.
The banks may need to hold 45% of their customers’ demand deposits in cash or in highly-liquid securities such as government debt. The higher liquidity level represents almost three times the cash the Swiss banks are currently required to hold for the deposits. However, the banks are meeting with the regulators so that liquidity requirements may be lowered.
The higher liquidity requirements by the Swiss regulators are intended to better position Swiss banks to survive another crisis. However, this would also restrict capital and increase the cost of capital. Indirectly, this would limit in the lending of the Swiss banks.
UBS AG received a support of 6 billion francs ($5.8 billion) from the Swiss government for its risky assets spin-off. The Swiss government also took an 8.5% stake in the bank. Both UBS AG and Credit Suisse have written down billions due to credit-related woes.
The Swiss regulators are planning to disclose new liquidity management criteria in the first quarter of 2010, which banks have to put into practice in the second quarter of 2010.
Swiss banks’ assets are bigger than the gross domestic product of any G-10 country. However, the recent dilution of the Swiss bank secrecy is resulting in massive fund outflows as worried investors eye a safer refuge. Moreover, if tighter liquidity requirements are implemented, the profitability of Swiss banks would be significantly impacted.
Sanofi Expands Presence in U.S.
Sanofi-Aventis (SNY) has decided to acquire U.S.-based Chattem Inc. (CHTT) for $93.50 per share, or approximately $1.9 billion, to create the world’s fifth-largest consumer healthcare company. The offered price represents a 34% premium over Chattem’s Dec. 18th closing price. Currently many pharma players are eyeing the over-the-counter (OTC) segment and consumer brands for portfolio diversification. The transaction, expected to be completed by the first quarter of 2010 is likely to be accretive to Sanofi's earnings from the very first year.
Although Sanofi is likely to generate around €1.4 billion globally in OTC sales in 2009, the company’s presence in the U.S. has been quite limited. We believe the Chattem acquisition serves the purpose of expanding Sanofi’s presence in this region. The U.S. market is highly lucrative, valued at about $20 billion with a 3% annual growth rate.
Chattem is an established player in the consumer healthcare segment (brands include Selsun Blue and Icy Hot, among others), with almost 130 years of experience catering to niche market segments in the U.S. Sanofi also announced its intention of converting Allegra (fexofenadine HCl) in the U.S. from a prescription medicine to an OTC product, which would be handed over to Chattem.
Sanofi has been entering into several deals in the recent past to compensate for the expected loss of sales from patent expiry of many of its lead products. Earlier this year, Sanofi acquired a majority stake in Indian vaccine maker Shantha Biotechnics for €550 million ($788.4 million) to boost the company’s vaccine business as well as expanding its presence in emerging markets.
Marsh to Buy HBSC Insurance
Expanding its insurance portfolio, Marsh & McLennan Co. Inc. (MMC) announced on Friday its decision to acquire HSBC Insurance Brokers Ltd (HIBL), a London-based wholly owned subsidiary of HSBC Bank. The deal, comprising both cash and shares, is set to be finalized for about $218 million. Subject to regulatory approvals, the transaction is expected to be sealed by the first quarter of 2010.
Marsh & McLennan has also partnered with HSBC under a Preferred Strategic Partnership (PSP), wherein the company shall have the right to provide insurance brokerage and risk management services to HSBC's corporate and private clients. Given the weakness in Marsh & McLennan’s client retention due to the ongoing economic turmoil, this partnership can provide additional revenue opportunities through HSBC’s well-built network and banking relationships.
The acquisition of the brokerage unit of HSBC Bank will bring with it about 1,400 employees in 30 offices across the U.K., Middle East and Asia, thereby widening Marsh & McLennan’s global exposure through HSBC’s already established distribution channels. Among others, HIBL also enjoys strong market positions in third party business generated in vital sectors such as health and contingency, education, marine and specie.
Additionally, the PSP will help Marsh & McLennan focus on the bancassurance model with its emphasis on life, pensions and investments, indicating strategic growth potential for the company.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
