Strait of Hormuz Bypassed
The Strait of Hormuz just became much less important to the transport of oil to countries that import crude. There has been much concern that if the strait was blocked by Iran’s navy in response to sanctions because of its weapon’s program, then the price of crude would soar. The price increase, in turn, would hurt the already fragile economies of some of the world’s largest nations. But Saudi Arabia and the United Arab Emirates have opened pipelines that will allow oil supplies to bypass the strait. The Financial Times reports:
The new links will more than double the total pipeline capacity bypassing the strait to 6.5m barrels a day, or about 40 per cent of the 17m b/d that transits Hormuz.
Human Genome Sciences Purchased
Several reports indicate that GlaxoSmithKline (NYSE: GSK) will buy Human Genome Sciences (NASDAQ: HGSI) for $2.8 billion. The two companies have battled over the price for several months. GSK believes it needs the latest biotech products and research to offset the slow growth a number of big pharma companies have experienced as many of their blockbuster drugs come off patent. To close the transaction, GSK increased its offer to $14 a share from $13. Reuters reports:
“It looks like a great conclusion for Glaxo. At around $14 a share, it is marginally higher than they first pitched but lower than I expected them to have to pay,” said Navid Malik, an industry analyst at Cenkos Securities.
Douglas A. McIntyre
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