The world’s largest drug maker said that is would be selling the Capsugel capsule-making business for $2.4 Billion.
The private equity firm Kohlber Kravis Roberts will be paying all cash for the capsule-maker.
Pfizer will be using the funds for a stock buy back and many other investments. The deal is expected to close in the third quarter, assuming regulators in the U.S., European Union and other markets approve.
As the stock market continues to move towards its highs this maybe a sign that large companies cashing in on value, seeing a slower 2011, based on the increase in energy costs. Oil is now back over $100/barrel and diesel is over $4/gallon. Distribution and manufacturing costs will have to follow. Food prices have risen steeply over the first quarter. It is only going to be a matter of time before the consumer starts to pull back and thus the businesses start slowing again.
It will be interesting to see how 2011 fairs with energy this high. The last time it was this high was 2009, in the heart of the recession.