MERGERS & ACQUISITIONS

JOHNSON & JOHNSON TO BUY PFIZER UNIT TRENTON, N.J. – Johnson & Johnson said yesterday it is buying Pfizer Inc.’s consumer health care unit for $16.6 billion in a nearly all-cash deal that strongly boosts J&J’s smallest division.

The purchase would give New Brunswick, N.J.-based Johnson & Johnson products including Listerine,Visine, Neosporin, and Lubriderm to add to its stable of name brands such as Reach toothbrushes, Acuvue contact lenses, Band-Aids, and Neutrogena. J&J also would see nonprescription Pfizer drugs such as Sudafed, Zantac, and Nicorette join its Tylenol, Motrin, and Monistat, nearly doubling current over-the-counter drug revenues.

– Associated Press

AUTOMOBILES

GM SEES 4,600 BUYOUTS, 30,400 EARLY RETIREMENTS General Motors Corp. said about 35,000 of its hourly employees have agreed to participate in its accelerated attrition program.

GM said the numbers reflect 30,400 early retirements and about 4,600 buyouts.

The reductions are part of the Detroit automaker’s bid to reverse the flagging fortunes of its North American operations.

– Dow Jones Newswires

IN THE BOARDROOM

KRAFT OUSTS CHIEF DEROMEDI, HIRES PEPSICO EXECUTIVE Kraft Foods Inc., the world’s second-largest foodmaker, ousted CEO Roger Deromedi, replacing him with Irene Rosenfeld, former head of the Frito-Lay division of PepsiCo Inc.

Mr. Deromedi agreed with the board to leave the company to pursue other interests, Northfield, Ill.-based Kraft said yesterday in a statement. Rosenfeld, a former Kraft executive, was most recently chairman and CEO of Frito-Lay North America, PepsiCo’s most profitable unit last year.

– Bloomberg News

WALL STREET

PHELPS DODGE SHARES PLUNGE 8% ON DEALS Shares of Phelps Dodge Corp. fell more than 8% yesterday, their steepest drop in 20 months, after the copper miner agreed to buy Canadian nickel mining concerns Inco Ltd. and Falconbridge Ltd. for premiums that some say will be hard to justify.

Phelps Dodge, of Phoenix, agreed to acquire Inco and Falconbridge for about $37 billion in cash and stock and will assume about $3 billion in net debt. Under the deal, which carries a $925 million breakup fee, Phelps Dodge would pay premiums of about 23% and 19%, respectively, to Inco and Falconbridge’s Friday closing prices.

– Dow Jones Newswires

REAL ESTATE

SALES OF NEW HOMES UP 4.6% IN MAY Sales of new homes rose in May to the fastest pace this year, led by big gains in the South.

The Commerce Department reported yesterday that sales of new single-family homes increased by 4.6% last month to a seasonally adjusted annual rate of 1.234 million units. Wall Street had been expecting a 4% drop in sales.

Analysts cautioned against reading too much into the gain, saying the strength in new home sales over the past three months has been heavily related to better-than-normal weather.

– Associated Press