Business Roundup: Baxter Buys Swedish Company for $4 Billion

Sales drop at Walgreens during November.

Deerfield based Baxter International reached an agreement to purchase Swedish dialysis equipment maker Gambro this week in a deal worth $4 billion, according to an article published on encn.com. They have been negotiating for a year.

Some analysts claim Baxter is paying a premium price for a company it hopes will enable it to integrate its home dialysis equipment business with Gambro’s institutional products, according to a story on Istockanalyst.

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“The price tag for Gambro is lofty and does add a new layer of integration risk to the (Baxter) story,” RBC Capital Markets analyst Glenn Novarro said in a statement quoted in the Istockanalyst story. The article also called Gambro a “good strategic fit for Baxter.”

Another analyst, Matt Miksic with Piper Jaffray Cos. in New York, is more enthusiastic about the deal, according to a story in Bloomberg. He thinks it will help Baxter’s renal division attain a larger place within the company and the industry.

“We like the deal,” Miksic said in a telephone interview quoted in the Bloomberg story recommending people buy Baxter shares. “The renal division is a little bit undersized relative to some of their other businesses; this balances that a bit and gives it a little more weight.”

Baxter will pay $2.76 billion in cash and complete the balance of the transaction through debt, according to the encn.com story.

Walgreens’ Sales Drop in November

Sales at Deerfield based Walgreens fell 3.9 percent in November as same store sales dropped 2.9 percent because of a decline in flu shot sales, according to a story published on Istockanalyst. Sales for the month were $5.85 billion.

Walgreens did explain the November calendar had something to do with the performance, according to the Istockanalyst article. “This year's November had one additional Thursday and Friday and one fewer Tuesday and Wednesday compared with November 2011, negatively impacting prescriptions filled in comparable stores by 0.3 percentage points," the company said in the Istockanalyst story.

Despite the fall in sales, the company’s stock increased four percent in value Wednesday after the announcement, according to an article in The Republic., The decline was less than predictions from analysts.

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