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Warren Buffett’s Berkshire Hathaway to acquire P&G’s Duracell business

BY Antoinette Alexander

OMAHA, Neb. — Warren Buffett is snapping up Procter & Gamble’s Duracell battery business in a deal valued at $4.7 billion.

Pursuant to the agreement, in exchange for a recapitalized Duracell, which will include approximately $1.7 billion in cash at closing, P&G will receive shares of P&G’s common stock currently held by Buffet’s Berkshire Hathaway, having a current value of approximately $4.7 billion.

The transaction is expected to close in the second half of 2015 and is subject to obtaining various regulatory approvals, as well as certain other customary closing conditions.

“I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette,” said Buffett, Berkshire Hathaway CEO. “Duracell is a leading global brand with top quality products, and it will fit well within Berkshire Hathaway.”

“We thank the Duracell employees for their many contributions to the business. They’ve made Duracell the global market leader in the battery category,” added A.G. Lafley, P&G CEO. “I’m confident this new ownership structure will provide strong support for Duracell’s future growth plans.”

P&G announced in late October that it was looking to exit the Duracell business as it works to restructure its portfolio. In July, P&G divested its pet business to Mars, Inc.

As part of the exit of the battery business, P&G closed the sale of its interest in a China-based battery joint venture earlier in the week.

Based on the signing of the contract to exit the Duracell business, P&G will restate batteries results to discontinued operations effective with the reporting of October-December 2014 quarterly results. P&G expects to restate earnings per share of approximately 12 cents to 14 cents to discontinued operations for fiscal year 2014. All-in GAAP earnings per share are not affected by the restatements.

P&G will incur a non-core, non-cash charge of approximately 28 cents per share in current quarter results to adjust Duracell goodwill and intangible assets to the expected after-tax transaction value.

 

 

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MinuteClinic makes foray in Wisconsin

BY Antoinette Alexander

WOONSOCKET, R.I. — The first MinuteClinic walk-in medical clinics have opened in Wisconsin inside four CVS/pharmacy stores in Milwaukee, Menomonee Falls and Waukesha, CVS Health has announced. MinuteClinic expects to open a fifth location in Whitefish Bay in December and clinics in Fox Point and Kenosha in early 2015.

"We face a significant shortage in primary care providers, an aging Baby Boomer population and the addition of millions of newly insured patients through the Affordable Care Act," said Andrew Sussman, MinuteClinic president and CVS Health SVP/associate chief medical officer. "By increasing access to high quality, affordable care at convenient clinic locations, MinuteClinic can help support the primary care medical home in Wisconsin."

MinuteClinic launched the first retail medical clinics in the United States in 2000 and is the largest provider of retail clinics with 939 locations in 31 states and the District of Columbia. MinuteClinic also has affiliations with 47 health systems around the country, with joint clinical programs and integration of electronic medical records.
 

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Ahold USA’s third-quarter net sales up 0.4% to $5.6 billion

BY Michael Johnsen

ZAANDAM, the Netherlands — Ahold on Thursday recorded 7.5 billion euros ($9.3 billion) in third-quarter revenue, representing a 1.9% lift in sales. 
 
“This quarter we reported improved sales trends in the United States and the Netherlands while our margin was stable versus the prior quarter, excluding the impact of the SPAR acquisition," said Dick Boer, Ahold CEO. "In the United States, the rollout of our program to improve quality, service and value for our customers is progressing well. By the end of this quarter, the program was active in over half of our stores," he said. "We expect that ongoing investments in our customer proposition and further development of our formats and assortment will continue to result in improving sales trends."
 
In the United States, third-quarter net sales of $5.6 billion were 0.4% higher than last year at constant exchange rates. Identical sales growth excluding gas was 1.2%.
 
Ahold USA's market share was higher than last year, driven by the New England division, while market share at Giant Landover remained under pressure.
 
Towards the end of the quarter, Ahold accelerated the rollout of the program to improve its customer proposition, implementing it in all 168 stores in its Giant Landover division. "We launched this program to a total of 181 stores across Ahold USA this quarter, bringing the overall total to 501 stores," Boer said. "An important part of the program is to improve our Fresh offering, as well as improving the value of key items in dry groceries. The continued focus on our own-brand assortment resulted in an increased penetration of 60 basis points to 37.8%."
 
 

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