AbbVie said on Tuesday it would buy Botox-maker Allergan in a cash-and-stock deal for about $63 billion to add fast-growing therapeutic businesses such as medical aesthetics and eye care.
Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each share held, for a total consideration of $188.24 per Allergan share, a premium of 45% to Allergan's Monday close.
The deal is expected to add 10% to adjusted earnings per share over the first full year following the close, the companies said.
AbbVie will continue to be incorporated in Delaware as AbbVie and will be led by Richard Gonzalez as chairman and chief executive officer.
Two members of Allergan's board, including Chief Executive Officer Brent Saunders, will join AbbVie's board upon completion of the transaction.
Allergan's shares soared nearly 30% in premarket trading. Shares of AbbVie were down more than 10%.
Outside Nissan’s shareholders meeting in Yokohama, Japan, June 25, 2019. Shareholders shouted at current board members, Nissan management and each other during the meeting.
Photo:
kyodo/Reuters
TOKYO—
Nissan Motor Co.
NSANY -0.42%
shareholders voted to overhaul the company’s board structure, a key goal of Chief Executive Hiroto Saikawa.
Following a rowdy meeting where shareholders shouted at current board members, Nissan management and each other, the measure passed in large part due to the support of alliance partner
Renault SA,
RNO -1.04%
which owns 43.4% of the Japanese company.
Shareholders approved the creation of new board committees for executive compensation, audit matters and director nominations. They also appointed a new crop of directors, increasing the number of directors to 11.
During the nearly three-and-a-half-hour meeting, shareholders took aim at Mr. Saikawa for the state of Nissan’s business, where sales and profits have imploded in the U.S. and Europe. Some asked him to step down.
Mr. Saikawa said he would work with the new nomination committee on a succession plan.
Some of the harshest questions were directed at Renault Chairman Jean-Dominique Senard, who joined the board in April.
A visibly angry Mr. Senard rebutted those comments, saying he had only sought to do deals that would have been to the benefit of Nissan.
Mr. Saikawa said he was focused on rebuilding Nissan’s struggling car business, but that he would continue to talk to Mr. Senard about the future structure of the Renault-Nissan alliance.
LONDON/LOS ANGELES (Reuters) - U.S. furniture company RC Willey Home Furnishings is so concerned that new global clean air rules will cause transport disruption that it brought forward the shipment of arm chairs and sofas from China by two months.
FILE PHOTO: Shipping containers are pictured at Yusen Terminals (YTI) on Terminal Island at the Port of Los Angeles in Los Angeles, California, U.S., January 30, 2019. REUTERS/Mike Blake/File Photo
The tougher regulations, set by the United Nations shipping agency, the International Maritime Organization (IMO), come into force on Jan 1. Costs will rise for ships towards the end of this year and there will be a knock on effect for trucks and other transporters that move goods around the world.
For shipping companies it is the biggest shakeup in decades and adds to the pressures of an economic slowdown and the threat of an escalating trade war between the United States and China.
While consumers are not expected to pay more for goods, higher transport bills and disruption to company deliveries could further dent economic growth.
Ship owners must cut sulphur emissions to 0.5% from 3.5%. They can do this by using low-sulphur fuel, installing exhaust gas cleaning systems or opting for other, more expensive, clean fuels such as liquefied natural gas or traveling more slowly.
Jeff Child, president of Berkshire Hathaway’s RC Willey Home Furnishings, moved the delivery of about 450 containers from September and October to July and August. He wants to avoid any disruption in the peak fourth quarter as ships prepare for the changes, including refitting equipment.
“We just don’t want to get caught in a situation where it affects our inventory,” he told Reuters.
Analysts say the container industry, which transports consumer goods such as sofas, designer clothes and bananas, will be one of the worst hit with extra costs of about $10 billion.
The world’s two biggest container shipping lines - Denmark’s Maersk and Swiss headquartered MSC - say they face annual extra costs of over $2 billion each. Twenty-five logistics company executives told Reuters they would pass along any IMO-related costs, such as ship upgrades or more expensive fuel, to customers.
“The sulphur cap will further put pressure on ocean freight rates and we... will have to pass those costs on to remain competitive,” Peder Winther, global head of ocean freight with Swiss transportation company Panalpina Group said.
TRUCKERS WORRIED
Economists say manufacturers are expected to absorb their part of the cost and are unlikely to raise the price of consumer goods, but the hit to companies could be a drag on the world economy.
A Nestle S.A. spokesperson said the food group was talking to transport companies about “fuel adjustment methodology” to reflect the impact of the new rules.
“Higher fuel prices would result in higher transport costs,” said Peter Nagle, an economist with the World Bank’s Development Prospects Group. “This would have the potential to lead to slower economic growth and trade.”
Trucking companies will also suffer. The IMO rules do not apply to them but they will face new competition from ships for lower sulfur fuel. This is expected to push up the price of diesel fuel for trucks by as much as 100 percent.
Small to mid-sized truckers may find it tough as they lack the clout to negotiate fuel deals or to recoup the costs.
“I’m at the whim of the market. All I can do is let the customers know what’s going on,” said Mike Baicher, president and chief executive of New Jersey based West End Express, which runs 90 trucks in New York, New Jersey and along the East Coast.
“There is only so much that the trucking company can absorb.”
In a letter sent to top U.S. government officials including National Security Advisor John Bolton, transport associations including trucking groups said there was consensus that U.S. transport industries would be “negatively affected by IMO 2020 pricing pressure”. It said there could be market disruptions.
“There’s a storm approaching but we don’t know how bad the storm is going to be,” said Glen Kedzie, energy and environmental counsel for the American Trucking Associations.
“YOU’RE GOING TO PAY”
Shipping and freight forwarding companies, who offer a service overseeing the delivery of goods from beginning to end, expect to feel more cost pressure.
Bart de Vries, chief operating officer for air & sea with U.S. headquartered Hellmann Worldwide Logistics, expects to pay more for services as shipping companies pass along the costs.
Some companies may overhaul their business plans.
“It will undoubtedly force many exporters and importers to review their sourcing strategies and vendors,” said Cas Pouderoyen, senior vice president of ocean freight with global logistics company Agility
Slideshow (2 Images)
Richard Fattal, co-founder of digital freight forwarder and logistics provider Zencargo, said there could be as much as a 10 to 20% rise in overall operating costs next year.
Allen Clifford, a U.S.-based executive vice president with MSC, said at a recent forum in California that his company was facing huge expenses.
“Who’s going to pay for it? You’re going to pay for it. Because I’m tired of paying for it,” he told industry executives, and port and customs officials.
Additional reporting by Richa Naidu and Karl Plume in Chicago; editing by Anna Willard
Eldorado Resorts is buying Caesars in a cash-and-stock deal valued at $17.3 billion, creating a casino giant.
Monday, June 24th 2019, 5:06 AM PDT
Updated:
Monday, June 24th 2019, 7:33 AM PDT
Eldorado Resorts is buying Caesars in a cash-and-stock deal valued at $17.3 billion, creating a casino giant.
The deal Monday puts about 60 casinos and resorts in 16 states under a single name.
Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or $12.75 per share.
The combined business will be called Caesars and its shares will be traded on the Nasdaq stock market.
Shareholders of Eldorado Resorts Inc. will hold about 51% of the company's outstanding stock, with Caesars Entertainment Inc. shareholders holding the remaining and 49%.
The deal is targeted to close in the first half of next year if approved by gaming regulators and shareholders.
(Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
And, the S&P 500
SPX, +0.07%
, as of Friday’s intraday high, was up 7.7%, putting the broad-market gauge on track to be the sixth best June ever.
What could possibly go wrong?
The OddStats Twitter
TWTR, +0.48%
account, in our stat of the day, points to the S&P’s action and asks the question: “Do you really want to join this list?”
Here’s what happened the other five times June’s been this strong:
This time it’s different? Well, in the time-honored tradition of selecting timelines to suit one’s narrative, here’s a follow-up tweet:
But, on the other hand, what would happen if $SPX manages to close up at least +20% before the end of July?
In the past, hitting +20% before August has been bullish for the rest of the year as well.
In cryptocurrencies, bitcoin
BTCUSD, -1.32%
broke through $11,000 level and notched its highest level since March 2018.
The chart
At a recent interview at the Economic Club of New York, investing legend Stanley Druckenmiller said “the best economic predictor I’ve ever met is the inside of the stock market.” And by that, he meant cyclical companies within the market — “trucking, retail, that kind of stuff, the Russell 2000
RUT, -0.31%
.” He determined that the inside of THIS market is telling us to exercise caution.
Jesse Felder of the Felder Report agrees, and he made this visual representation of what Druckenmiller was talking about to back his point:
“‘You better be careful and keep your eyes open,’ indeed,” Felder wrote in his most recent blog post, quoting Druckenmiller.
The call
The Fed is going to cut rates. We know that. But will it cut rates twice this year? How about three times? James Bianco of Bianco Research says four — FOUR! — cuts this year alone. And he believes the stock market will eat it up. “Trust the market. It wants a lot of rate cuts. It’s been saying that for months,” Bianco told CNBC. “They’re saying, ‘Look, you’ve got room to lower rates. Lower the cost of capital and maybe provide more stimulus without the fear of inflation. So, do it.’”
Watch the full interview:
The buzz
Merger Monday: Shares of Caesars Entertainment
CZR, +16.12%
are climbing on news of a buyout by Eldorado Resorts
ERI, -9.00%
in a deal that values the rival casino operator at $8.6 billion.
It might seem like there’s absolutely no way the TV version of Fox News host Sean Hannity is an actual real person, but one look at his cozy text conversations with Paul Manafort reveals, well, he IS the same guy in real life.
Disney’s
DIS, -1.50%
“Toy Story 4” opened to a solid $118 million in the U.S. and Canada to lead the weekend’s box offices, but it was a bit of a letdown.
Nike
NKE, -0.08%
will give some insight later in the week into how tariffs are affecting the bottom line — analysts say Nike’s doing just fine. Nevertheless, the U.S./China trade war has been a cause for concern for retailers.
The quote
Reuters
John Bolton speaks
“Neither Iran nor any other hostile actor should mistake U.S. prudence and discretion for weakness. No one has granted them a hunting license in the Middle East” — U.S. national security adviser John Bolton, as quoted by CNN.
The tweet
There are 4 types of wealth:
1. Financial wealth (money) 2. Social wealth (status) 3. Time wealth (freedom) 4. Physical wealth (health)
Be wary of jobs that lure you in with 1 and 2, but rob you of 3 and 4.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.
Last year, the burger chain switched to fresh beef quarter-pound burgers from frozen at most of its stores in the contiguous United States. That change has led to a 30% spike in sales of quarter pounders on average over the past 12 months, the company said Monday. It also helped McDonald's(MCD) burgers gain market share in what the industry calls the "informal eating out" category for the first time in five years, the company said.
McDonald's made the change to appeal to consumers' growing interest in ingredient transparency. Buyers today want to know where their food comes from, Marion Gross, the company's chief supply chain officer for North America, told CNN Business.
McDonald's said sales of the fresh quarter-pound burger were especially strong in May 2018, when it was first introduced, thanks in part to marketing efforts. More recently, the company included the fresh beef burger in its 2 for $5 deal for the first time. The promotion performed well, CFO Kevin Ozan noted in an analyst call discussing first-quarter earnings.
Going from frozen to fresh beef was a challenge.
"There was a huge transformation that was required" to make the shift, Gross said. Suppliers needed new packaging equipment and more refrigerators, among other things, to make sure the fresh beef was handled safely, she said. Distribution trucks needed the right temperature monitoring systems to transport the beef correctly. And in McDonald's kitchens, employees had to implement new food safety practices.
Overall, the shift was one of the "biggest, boldest moves that we've made in a long time," said Gross. It's the biggest supply chain change the company has made since it started serving all-day breakfast in 2015, she noted.
It also put a strain on the company's franchisees, who had to pay for some of the changes, like different refrigeration and storage systems.
Last year, the company encountered some friction with its franchisees. In October, the National Owners Association — a self-funded advocacy group of McDonald's franchisees — met for the first time to discuss ways to work with McDonald's to improve their livelihoods. The company's aggressive remodeling plan, which includes modernizing stores with digital menu boards and self-order kiosks, has put pressure on franchisees, which also struggle when McDonald's adds new menu items or makes other big changes.
Gross noted that the shift was "not easy," but that franchisees ultimately came on board because fresh beef burgers are just better. "The franchisees became believers very quickly," she said.
McDonald's shared news of the improved fresh beef sales as it fields questions about whether it will introduce a plant-based protein burger to its US menu.
Several fast food chains, including Burger King, have added menu items featuring meatless meat as consumers show interest in the product. McDonald's serves a vegan burger in Europe.
American courier FedEx has apologized for failing to deliver a package to the US which contained a Huawei smartphone. The incident, which is not the first of its kind to affect Huawei, was explained as an “operational mistake.”
The parcel belonged to PC Magazine which reportedly tried to send a Huawei P30 smartphone from Britain to the United States. Tracking services revealed the shipment was returned to London after it spent several hours in Indianapolis.
“The package in question was mistakenly returned to the shipper, and we apologize for this operational error,” a FedEx spokeswoman told Reuters.
The company also said it “can accept and transport all Huawei products except for any shipments to listed Huawei entities on the US Entity List.”
Following the incident, China’s technology giant Huawei tweeted it was not within FedEx’s right to prevent the delivery. It added that the courier had a “vendetta.”
China’s foreign ministry said on Monday that FedEx should offer a proper explanation.
The so-called ‘operational error’ comes less than a month after FedEx apologized for rerouting packages sent between offices of Huawei. Two packages containing “urgent documents” which were sent from Japan ended up being sent to the US. Huawei’s shipping agent blocked two more from Vietnam, which FedEx had also attempted to reroute. Huawei’s spokesman then said the incident had “undermined their confidence” in the US-based shipping company.
The latest incident has sparked renewed criticism of FedEx on Chinese social media. The topic ‘FedEx apologizes again’ was trending on China’s microblog platform Weibo.
China’s state-run newspaper the Global Times tweeted on Sunday that FedEx is likely to be added to the Chinese government’s upcoming ‘unreliable entities’ list of foreign firms, groups and individuals that harm the interests of Chinese companies.
Huawei has become an important point of conflict between the US and China as a part of the ongoing trade war. In May, the Trump administration added Huawei to the entity list effectively barring it from doing business with American companies which supply Huawei with necessary parts and technology. Google and Microsoft have suspended business with Huawei in order to conform to the US trade ban.
The US alleges that Huawei could be spying for the Chinese government, a claim which the company, along with the Chinese government, has repeatedly denied.
Reuters
