Medco Health Solutions Inc. (NYSE: MHS) has announced it will buy PolyMedica Corporation (NASDAQ: PLMD) in an all-cash deal worth $1.5 billion.

PolyMedica is a direct supplier of diabetes testing supplies and other diabetes related products that is largely known for its Liberty brand. The purchase price values PolyMedica at $53 per share, a 17% premium over its closing price before the announcement.

Medco is explicitly making a play for the burgeoning diabetes market, as the press release announcing the deal states:

"An estimated 17 million Americans are currently treated for diabetes, with more than 1 million patients diagnosed each year; an additional 7 million are estimated as undiagnosed. Diabetes care represents one of the fastest-growing segments of health care in a market estimated at more than $25 billion a year. These patients represent 5 percent of the population but account for more than 15 percent of total drug spending..."

Medco is a pharmacy benefit manager that mainly provides prescription drug programs, with clients including Blue Cross/Blue Shield. Last year, Medco had net income of more than $600 million on revenue of more than $40 billion. The purchase of PolyMedica is seen positively by analysts as complimenting Medco's existing services, which include giving prescriptions to 2.8 million diabetes patients.

Both Medco shares and PolyMedica shares are trading near all-time highs on news of the deal, but the possible synergies from this purchase still makes MHS a stock worth watching!

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Altria Group, Inc. (NYSE: MO) said in a statement that it plans on to spin-off Philip Morris International, though final approval would depend on a January 30th board meeting as well as a favorable ruling from the IRS on tax consequences of any such move.

The spin-off is a logical, if not necessary, move as it would separate the  fast growing international cigarette division, which accounts for two-thirds of Altria profit, from the declining consumption and legal liability of the U.S. cigarette market.

Altria is currently the world's largest cigarette company but the international division has been a particular bright spot with dominant market share in France, Germany, Italy and Spain. Cigarette sales by volume increased 3.3% last quarter compared to a year ago for the international division, while declining by the same amount for the domestic unit.

Earlier this year, Altria spun-off the world's second biggest food company Kraft Foods, Inc. (NYSE: KFT), though for much different reasons - its shrinking profits were hurting Altria's other divisions.

After the proposed spin-off, current Altria Chairman and CEO Louis Camilleri would assume that position at Philip Morris International while current Philip Morris USA head Michael Symanczyk would become the new Chairman and CEO of Altria.

Regardless if the board approves any proposed spin-off, the fact that the company is recognizing the increasing opportunity in the international cigarette market definitely makes MO a stock worth watching in the coming months!

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Wendy's International (NYSE:WEN) has agreed to let a major shareholders have access to confidential financial information about the third-largest hamburger chain so he can decide whether or not to bid for the company, according to a Schedule 13D/A filing made today with the SEC.

Billionaire investor Nelson Peltz, who owns 9.8 percent of Wendy's, has been lobbying for a sale of the company to his own Triac which owns fast-food chain Arby's. In the past, he has indicated a willingness to pay between $37 and $41 per share in a deal worth $3.2 billion to $3.6 billion.

Wendy's agreed today to provide Peltz and Triarc with critical financial information that will enable them to evaluate a potential bid on the condition that they do not acquire any more shares in the company before December 1, 2007. Shares in the company moved up over 3 percent today on the news.

Shareholders - disappointed with the stalling share price recently - are hoping that the company can reach an agreement to be sold. Whether or not we will see an offer for the company remains to be seen, but this is definitely a stock to watch during the next few months!

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