Lockheed to split electronic systems business in two

WASHINGTON, Mon Oct 8, 2012 – The largest U.S. weapons maker, Lockheed Martin Corp., said it plans to split its electronic systems business into two separate operations focused on missiles and training, a move it said would save $50 million and eliminate 200 jobs.

The change, effective December 31, will give Lockheed five business areas: aeronautics, space systems, information systems, missiles and fire control, and mission systems and training.

Marillyn Hewson, who currently heads the electronic systems business, is scheduled to take over as president and chief operating officer of Lockheed on Jan. 1.

Chris Kubasik, who is set to succeed Bob Stevens as chief executive officer on January 1, said the restructuring would streamline Lockheed operations and strip out a layer of management at a time when the Pentagon is pushing contractors to lower overhead costs.

“This new structure will allow us to better support our customers around the world and positions our company for sustained long-term growth,” Kubasik said in a statement.

Lockheed said the new missiles and fire-control business will be based in Dallas, with 16,000 employees working on programs such as Patriot PAC-3 missiles and missile defense.

Dow Chemical stockholders reject independent chair

NEW YORK, Thu May 10, 2012 – Dow Chemical Co. shareholders declined to split the roles of chairman and chief executive at their annual meeting on Thursday, opting to keep the reins of the largest U.S. chemical maker closely held.

The proposal to split the roles, which, if approved, would have gone into effect after current Chairman and CEO Andrew Liveris retired, received only 36 percent of votes cast.

The recent trend among corporate governance experts to recommend splicing the two roles has produced results among large banks, including Bank of America and Citigroup, but industrial manufacturers, like DuPont  and General Electric mostly have kept their CEO and chair roles combined.

Dow shareholders also approved Chairman and CEO Andrew Liveris’ $19.3 million compensation package for 2011, an employee stock purchase plan and an executive stock compensation plan.

Shareholders rejected a plan that would have let them vote by written consent – without meeting in person – on various proposals. That plan received only 39 percent of votes cast.

The compensation vote, required as part of 2010’s Dodd-Frank Act in the United States, was nonbinding.

Shares of Midland, Mich.-based Dow rose 20 cents to $32.33 in morning trading.

Coca-Cola directors recommend two-for-one stock split

ATLANTA, Wed Apr 25, 2012 – Coca-Cola Co’s. board of directors recommended a two-for-one stock split on Wednesday, the first split in 16 years.

The split reflects the board’s confidence in the long-term growth and financial performance of the company, according to CEO Muhtar Kent.

“A stock split reflects our desire to share value with an ever-growing number of people and organizations around the world,” Kent said in a statement.

The split, which would double the number of outstanding shares to 11.2 billion, is subject to approval by shareholders. They will vote on it at a special meeting planned for July 10.

If approved, the new shares would be distributed on or around August 10, Coke said.

This would be the 11th split in the stock’s 92-year history. One share of stock purchased for $40 in 1919 would be worth about $9.8 million today, with all dividends reinvested annually, the company said.

In early New York Stock Exchange trading, Coca-Cola shares rose 0.5 percent to $74.49.

Kraft to cut 1,600 jobs as it splits into two companies

NORTHFIELD, Ill. ― Kraft Foods Inc. said that splitting into two companies would lead it to cut about 1,600 jobs in North America this year and that its 2011 profit should be slightly higher than it had previously forecast.

Kraft also said its 2011 net revenue would be up by about 10 percent, as it ended the year with strong momentum around the world despite a tough operating environment. It expects to report 2011 operating earnings per share of at least $2.28, including a penny per share hit from currency in the fourth quarter.

Previously Kraft had forecast operating earnings per share of at least $2.27, excluding any potential currency impact in the fourth quarter.

Analysts, on average, had expected Kraft to earn $2.27 per share this year, according to Thomson Reuters I/B/E/S.

About 40 percent of the job cuts come from the company realigning its U.S. sales division, Kraft said. About 20 percent of the jobs being cut in the United States and Canada are currently open positions, the company said. The planned job cuts do not include any cuts at manufacturing facilities.

PepsiCo directors warm to splitting company-report

PURCHASE, N.Y. ― Some members of PepsiCo. Inc’s. board want to take a closer look at splitting up the snack and beverage units, a move that its chief executive officer is against, the New York Post reported, citing a source close to the situation.

“I hear there is going to be a shake-up,” the source said, according to the newspaper report.

Another source quoted by the paper said CEO Indra Nooyi is close to announcing two big acquisitions, which are believed to be international, and which could be big and interesting enough to boost the company’s stock.

The report comes days after activist investor Nelson Peltz’s Trian Fund said it had taken a 2.36 million-share stake in PepsiCo, where Nooyi is under pressure from many on Wall Street to split up the company or make other big changes.

Since then, the shares have been rising. They were up another 3.1 percent at $66.49 in morning trading on Wednesday.

PepsiCo management said in October that it had considered breaking up the company, but did not find that to be in the best interests of shareholders.

Then, last week, PepsiCo said its board and management would extend their review of ongoing business plans for 2012 and beyond, raising hopes of more drastic measures to reignite its sagging performance.

A PepsiCo spokesman was not immediately available for comment on Wednesday morning.

The newspaper reported that another source close to the situation said that PepsiCo “might still split, despite Indra saying they will not do so.”

The New York Post also reported that an investment banker told dealReporter that one breakup scenario would involve Nooyi running PepsiCo’s international business while “internal candidates” run the U.S. beverage and snack part of the business.

Abbott Laboratories to split into two companies, shares jump

NEW YORK ― Abbott Laboratories Inc. said it will split into two publicly traded companies — one focusing on pharmaceuticals and biotech medicines and the other on medical devices, diagnostics, nutritionals and generic medicines — to better ensure growth.

Its shares jumped 7.3 percent in premarket trading on Wednesday after the announcement, which may increase pressure on other diversified healthcare companies to examine potential break ups.

The company also reported a 66 percent drop in third-quarter net profit, due to a $1.4 billion after-tax litigation charge. The charge relates to the company’s attempts to settle a U.S. federal investigation into marketing of its Depakote anticonvulsant drug. Excluding the charge, third-quarter results slightly topped Wall Street forecasts.

Chief Executive Officer Miles White, who has led the suburban Chicago company since 1998, will be in charge of the diversified medical products company, which will retain the Abbott name.

Richard Gonzalez, currently Abbott’s executive vice president of global pharmaceuticals, will lead the other company. Gonzalez, who first joined Abbott in 1977, previously served as the company’s president and chief operating officer.

The new pharmaceutical company, yet to be named, will be created from a tax-free distribution to Abbott shareholders, although the expected stock distribution ratio has yet to be set.

The new pharmaceutical company would have nearly $18 billion in annual revenue and will include Abbott’s current flagship product, the rheumatoid arthritis drug Humira, one of the world’s top-selling medicines at more than $8 billion a year.

The diversified medical products company has about $22 billion in annual revenue and includes its market-leading Xience heart stent. This company will target double-digit ongoing earnings-per-share growth, while looking to expand in emerging markets, the company said.

It is expected that the two companies will each pay a dividend that, when combined, will be equivalent the current Abbott dividend at the time of separation. The company expects to complete the split by the end of 2012.

Also on Wednesday, Abbott reported that net earnings dropped to $303 million, or 19 cents per share, dragged down by the Depakote charge. That compared with $891 million, or 57 cents per share, a year ago.

Excluding special items, Abbott earned $1.18 per share, a penny ahead of the average expectation of analysts, according to Thomson Reuters I/B/E/S.

Global sales rose 13 percent to $9.82 billion, above Wall Street expectations of $9.64 billion.

Publisher McGraw-Hill to split into two listed companies

NEW YORK ― McGraw-Hill Cos. Inc. plans to split into two public companies, with one holding its Standard & Poor’s ratings and index businesses and the other holding its textbook publishing units.

The move, announced Monday, is a major step toward the breakup and reorganization of the mini-conglomerate that was called for by activist investors last month in a meeting with McGraw-Hill directors.

The investors — Jana Partners LLC, a hedge fund, and the Ontario Teacher’s Pension Fund — argued that breaking up the company would increase its value to shareholders.

A Jana spokesman did not immediately respond to a request for comment.

The company’s shares were up 2.6 percent to $39.74 in premarket trade.

Terry McGraw, chairman and chief executive of the company and a great-grandson of the founder, will lead McGraw-Hill Markets, which will hold the Standard & Poor’s credit rating business, S&P’s market index business and S&P Capital IQ, which provides data and analytical tools on companies and markets.

The company said it has started a search for a new CEO for McGraw-Hill Education, which will contain the textbook publishing and education units. The current head of those businesses is Robert Bahash, 66, a long-time chief financial officer of the corporation who stepped into his current post last year after the top education executive left.

The break-up, which will be structured as a tax-free spinoff of the education business to McGraw-Hill shareholders, is expected to be completed by the end of 2012, the company said in a statement.

The markets businesses will have about $4 billion of revenue in 2011, and the education businesses will have about $2.4 billion in revenue, it said.

McGraw-Hill said it will make significantly cut from $1 billion of current corporate expenses and administrative and technology costs.

Evercore and Goldman Sachs are advising on the spinoff.

The company said it would speed up share repurchases to a total of $1 billion in 2011. It said it has bought back $541 million of stock so far this year.