Hillshire Farms to acquire Pinnacle foods. Craft beer boom raises hop prices. Tesla to stop producing batteries for Toyota's RAV4. London has most billionaires.
Hillshire Farms to acquire Pinnacle Foods for $4.3 billion
Bloomberg reports that Hillshire Brands, the maker of Jimmy Dean meats, has agreed to buy Pinnacle Foods for about $4.3 billion, gaining products such as Birds Eye frozen foods, Duncan Hines baking mixes and Vlasic pickles. The total amount is about 20 percent higher than Pinnacle’s closing price on May 9th, the most recent trading day. Including debt, the deal is valued at $6.6 billion. This is Hillshire’s third acquisition in less than a year. The company went public about a year ago. Blackstone Group LP had acquired Hillshire for $2.2 billion about seven years ago and Blackstone later took the company public. Shares of Hillshire rose 2.8 percent to $38 per share in early trading.
Chinese stocks outperform world markets
The Associated Press is reporting that stocks in China and Hong Kong outperformed the markets on Monday after Chinese authorities promised financial reforms. Markets elsewhere were solid after the Dow closed at record highs on Friday. China’s Shanghai Composite jumped 2.1 percent after the Chinese Cabinet promised to allow local governments to issue bonds and that the process for IPOs would be streamlined.
Hop prices soar as craft beer booms
The $14 billion craft beer industry has seen double-digit production growth over the past few years, according to CNBC. This has doubled the price of the specialist aroma and flavor hops favored by the craft brewers. Prices for hops range from $7 to $10 per pound, the highest since 2007-2008 when the market was hit by a severe drought. Craft beers use between four and ten times more hops than the average beer produced by multinational beer companies. There are approximately 2,768 US craft breweries today, a 15 percent jump from 2012. Their beer now accounts for almost 8 percent of the total US beer market. India Pale Ale is the best-selling craft beer style.
Tesla to stop supplying batteries to Toyota
Tesla Motors says it is going to stop supplying battery packs and motors for Toyota, which uses them in its electric RAV4. USA Today reports that the end of the arrangement was found within a corporate filing from Tesla last week. Toyota is expected to end production of the current RAV4 EV model this year. The RAV4 EV was a small production vehicle for Toyota and sold for about $50,000. Tesla is working on its own crossover, which is likely to cost a lot more than the RAV4.
Banks within Wal-Marts reap highest fees
The Wall Street Journal reports that the five banks with the most Wal-Mart branches ranked among the top 10 US banks in fee income as a percentage of deposits in 2013. Other banks among the top 10 serve the US military. While most US banks earn the bulk of their income via lending, these banks have higher fee income than loan income. Fee income is generally based upon fees for overdrafts. Among the banks analyzed by the Wall Street Journal, only 15 banks had fee income higher than loan income. The 15 banks included the top five banks operating within Wal-Mart. Wal-Mart has no role within bank operations, however, some of the leading banks within Wal-Mart provide services for riskier customers, often previously shut out of the banking system. One bank, for example, allows clients to overdraw their accounts up to $500, and will, of course, charge a fee. Overdraft fees totaled $32 billion among US banks in 2013.
London has more billionaires than any other city
A new study of the super-rich indicates that London has 72 residents whose fortunes exceed 1 billion pounds ($1.6 billion). USA Today indicates that Moscow has 48, New York has 43, San Francisco has 42, Los Angeles has 38 and Hong Kong has 34. Britain is believed to have more billionaires per head than any other country with 1 billionaire for every 607,000 Britons. The US has one billionaire for every 1 million or more Americans.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.