Drugs and machines do not usually mix well, but the results in the pharma and TMT sectors this week were far from disastrous. Apple continued to defy every known logic of gadgetry, even the price-killing effects of Moore’s Law. Asian companies are racing to catch up. LG Electronics turned in a solid first quarter performance after recording losses in 2011. China’s ZTE, the world’s fourth biggest mobile phone maker, announced ambitions to become number three by 2015. And chipmakers TSMC and Hynix moved in opposite directions with the former planning record investment this year. In the telecoms sector, meanwhile, Vodafone made a low-ball offer to put C&W Worldwide out of its misery. In India, regulators proposed a nonsensical plan to auction reclaimed 2G spectrum. And in the US, wireless carriers struggled to squeeze a profit out of the ultra-competitive market.
The pharma sector yielded two relatively large deals. Nestlé paid a hefty $12bn for Pfizer’s infant nutrition business to gain emerging market share, and Watson agreed a €4.5bn takeover of Actavis to create one of the world’s largest generic drugs group. AstraZeneca is not faring so well, however. The chief executive of the Anglo-Swedish drugmaker was forced to step down early amid investor unhappiness at its declining growth prospects.
Elsewhere Walmart saw $12bn wiped off its market value after allegations that it paid $24m in bribes for Mexican building permits. Meanwhile other US household names such as Pepsi, Kellogg, Colgate-Palmolive and ExxonMobil are benefiting from their powerful brands, global diversification and commitment to dividends.