Good News for the Fearful & Brave

“With $39 billion on hand from the sale of Alcon Inc., Nestle SA will be in the market for acquisitions as part of its strategy to bulk up its fast-growing nutrition business…

“It is a tough time to be running a food company. Commodity prices have been rising, the competition for shelf space at retailers is brutal, and as the economy sours, consumers pull back on their spending. So far, Nestle has been navigating well; it recently raised its 2008 sales forecast and said its cost-cutting programs and large size were helping it weather current conditions.

“Dealmaking to adjust Nestle's portfolio of brands has been a hallmark of Mr. Brabeck's decade as CEO. He has been cutting products and brands that don't meet his profit and sales expectations. He shed lower-margin staples like some frozen foods and purchased more premium brands like Dreyer's ice cream. He has also pushed Nestle aggressively to develop foods that have nutritional elements, viewing those as commanding higher prices at retail and also benefiting from demographic trends like aging consumers.

“The cash from the Alcon deal gives Nestle firepower to finance any future acquisitions at a critical time: The global financial crisis has made credit harder to come by, even for investment-grade-rated companies like Nestle. Nestle's strategy is the latest evidence that some corporations, known as strategic buyers, see opportunity in the turmoil in the mergers and acquisitions market. For companies that can ride out the financial and economic storm, there may be opportunities to pick up businesses from struggling rivals on the cheap, at a time when once-fierce competition from private-equity buyers has disappeared.”

(“Cash May Feed Deal Appetite at Nestle.” Dana Cimilluca and Jeanne Whalen. Wall Street Journal: April 8, 2008. pg. B.1)

REMEMBER WARREN THE WEALTHY: “Be brave when others are fearful, and fearful when others are brave.”

Are we prepared to move forward? Or, are we forced into retreat?

Our world is a construction of our choices.