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Merck CEO Kenneth Frazier to retire at the end of June

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Merck CEO Kenneth Frazier to retire at the end of June

Kenneth Frazier, one of only a handful of black executives leading major US companies, will step down as chief executive officer at the end of June and be replaced by Chief Financial Officer Robert Davis, Merck said on Thursday.

Frazier, 66, will not be handing over the reins completely, at least for now. He will remain with the drugmaker as executive chairman for a transition period.

Frazier was one of only five black CEOs in last year’s Fortune 500 list, released in June 2020. That number has dropped even lower since then, as TIAA CEO Roger Ferguson, Jr. will retire in March.

However, joining the ranks, Roz Brewer, who was previously Starbucks’ chief operating officer, is set to become CEO of Walgreens in March.

The dearth of black CEOs at top American companies comes as corporate boards are being pressured to focus on improve their diversity, particularly among their companies’ leadership.

He was set to retire in 2019, but the company scrapped a policy requiring its CEO to retire at the age of 65.

Davis will inherit a company with one of the world’s best selling drugs in its cancer immunotherapy Keytruda and a tightened focus after it completes the spinoff of its slower growing women’s health, biosimilar drugs and older products later this year.

Frazier joined Merck nearly 30 years ago and climbed the ranks, becoming CEO of the Fortune 500 company in 2011. He made his name at Merck as general counsel by steering the company safely through daunting litigation over Vioxx. He also played a significant role in Merck’s 2009 acquisition of NJ drugmaker Schering-Plough, which then held Keytruda, or pembrolizumab, as a pipeline asset.

“That deal was done at a time where, frankly, we saw an opportunity in the market based on where the valuations of companies were,” he said. “None of us were really smart enough to know that among the assets we were acquiring was pembrolizumab.”

Under Frazier’s leadership, Keytruda has eclipsed Bristol Myers Squibb’s cancer immunotherapies, which hit the market first. Keytruda’s sales topped $14 billion last year.

Shares of the company more than doubled over his tenure.

Frazier, the grandson of a sharecropper, made headlines in 2017 when he became the first business leader to leave former President Donald Trump’s manufacturing council following Trump’s comments on a white nationalist rally held in Charlottesville, Virginia. He also spoke out last year after the killing of George Floyd by a white police officer, saying that he felt Floyd “could be me.”

“His shoes won’t be easy to fill in so many ways, both within Merck but also including his many principled and valuable contributions to important issues facing society today,” Davis said on a post-earnings conference call.

Frazier’s transition follows the recent retirement of Roger Perlmutter, who ran the company’s research and development division for much of Frazier’s tenure and was also considered a major force behind the success of Keytruda. Dean Li took over for Perlmutter on Jan. 1.

Davis has been CFO since 2014 and in charge of the company’s business development, real estate and other corporate strategic functions since 2016.

A career healthcare executive, he was the president of Baxter International’s medical products business before joining Merck, and also spent 14 years at Eli Lilly.

Citi analyst Andrew Baum said the elevation of Davis suggests the company will work to reduce its dependency on Keytruda.

Merck also reported fourth-quarter earnings of $1.32 per share that missed analysts’ estimates of $1.38 per share on lower-than-expected sales of diabetes drugs Januvia and Janumet.

It forecast a better-than-expected profit in 2021, although it said the COVID-19 pandemic would hurt sales of certain drugs, especially vaccines.

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Michaels to be acquired by Apollo for $3.3 billion

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Michaels to be acquired by Apollo for $3.3 billion

Arts-and-crafts retailer Michaels said it has agreed to be acquired by private equity giant Apollo Global Management in a deal that values the company at $3.3 billion.

The going-private transaction values Michaels’ outstanding stock at $22 a share, a 47 percent premium to the closing price on Feb. 26, the last trading day before the media reported that Michaels was in play, the companies said.

The deal with Apollo — controlled by billionaire Leon Black, who has been weathering a scandal over his ties to dead pedophile Jeffrey Epstein — is valued at a total of $5 billion including debt.

Michaels shares on Wednesday rose $4.08, or 23 percent, to $22.10 in early trading.

The arts-and-crafts retailer has more than 1,200 stores in North America and it had been a go-to stop for consumers looking for something to do during quarantine.

In the fourth quarter, its comparable sales increased by 16.3 percent compared to a year ago.

“Our Michaels strategy and the work that we have done in the past year have led to phenomenal business results, strengthened our core business and positioned Michaels for long-term sustainable growth,” Michaels chief executive Ashley Buchanan said in a statement.

“As a private company, we will have financial flexibility to invest in, expand, and improve our retail and digital platforms.”

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Olbermann slammed for saying Texas shouldn’t get COVID vaccine

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Olbermann slammed for saying Texas shouldn't get COVID vaccine

Left-wing political pundit Keith Olbermann is drawing heat again, this time after he said that Texas shouldn’t get the COVID-19 vaccine.

In response to a tweet from Texas Gov. Greg Abbott who announced the end of the state’s mask mandate, Olbermann tweeted: “Why are we wasting vaccinations on Texas if Texas has decided to join the side of the virus?”

The tweet sparked a pile on across the Twittersphere with people from both sides of the aisle chastising the former ESPN and MSNBC talking head.

“Ah yes millions should be left to suffer and die because their Governor (who they are already trying to oust) is a festering pile of feces…or…or hear me out…we could support the communities he plans to sacrifice,” tweeted writer Mikki Kendall.

“I just think it’s wrong to make gross generalizations about the lives and potential deaths of an entire population. It is mean-spirited and unhelpful on every front,” wrote a Dallas Morning News reporter, Evan Grant.

Brandon Friedman, a former Obama administration official kept it short, writing: “Delete this, Keith,” while Daily Beast editor-at-large Molly Jong-Fast tweeted: “People deserve to stay safe and healthy no matter who they voted for.”

This isn’t the first — and likely won’t be the last — time the bombastic Olbermann has been in hot water after voicing his opinions.

Last November, he was slammed on Twitter for calling President Trump “a whiny little Kunta Kinte,” in a ham-fisted attempt to twist the name of the “Roots” character into a crude insult.

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Magic Johnson joins board of Fanatics

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Magic Johnson joins board of Fanatics

Basketball legend Earvin “Magic” Johnson joined the board of Fanatics, the sports licensing company said Wednesday.

The former Los Angeles Laker — who led his team five times to the NBA championship — has agreed to join the board as one of three independent directors, including Mindy Grossman, chief executive of WW (formerly Weight Watchers) and Gerald Storch, a former CEO of Toys R Us and Hudson’s Bay Company, which owns Saks Fifth Avenue.

The high-profile appointment comes as the privately held Fanatics, which makes jerseys and other gear for professional sports leagues and teams as well as universities, has been reportedly working toward plans to file for an initial public offering.

While an IPO is clearly an available path to us, there is no update on any timeline,” the company said in a statement. “Our focus remains on building a great global company and strengthening our vertical commerce business model.”

Led by founder Michael Rubin, Fanatics has been on a fundraising tear, securing $350 million in August, which values the company at $6.2 billion. The National Football League and Major League Baseball are also investors in the company, which sells licensed apparel mostly online.

In a statement, Rubin said of Johnson, “He’s an NBA legend and a titan in the business world, but more importantly he recognizes and leverages his platform to advance diversity and inclusion across all business sectors.”

The hoopster heads up Magic Johnson Enterprises, an investment company that focuses on ethnically diverse and underserved urban communities. In 2012, he became co-owner of the Los Angeles Dodgers and holds ownership stakes in the WNBA’s Los Angeles Sparks, Major League Soccer’s Los Angeles Football Club, and eSports franchise Team Liquid. His company also owned more than 100 Starbucks stores until 2010.

“It’s an honor to be invited to join the Fanatics board of directors,” Johnson said in a statement. “I’ve been impressed with the evolution of the company and its ability to transform the industry over the past several years.”

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