U.S. Indexes Lower; PNC Financial, RBC Bank in $3.45 B Deal

Arthi Gupta
20 Jun, 2011
New York City

U.S. indexes declined on the ongoing worries related to the euro-zone. PNC Financial agreed to buy RBC Bank for $3.45 billion. Boeing won $1.7 billion order from Qatar Airways. Colgate purchased Sanex personal care brand from Unilever for $952 million.

[R]9:35 AM New York – U.S. indexes declined on the ongoing worries related to the euro-zone. PNC Financial agreed to buy RBC Bank for $3.45 billion. Boeing won $1.7 billion order from Qatar Airways. Colgate purchased Sanex personal care brand from Unilever for $952 million.[/R]

World markets edged lower after the euro-zone finance ministers delayed the decision on bailout conditions till early July. The uncertainty hobbled world markets and the euro. In addition G-7 finance ministers also conducted emergency conference call before the Asian markets opened.

The ongoing Greek troubles have been at the centre stage for the third week in a row as Greece struggles with the implementation of new austerity measures and ramp up asset sale to meet the demands of the European regulators.

The finance ministers rejected a proposal to approve a further €12 billion to Greece on the grounds that the country needs to implement the planned €28 billion spending cuts and rapid privatization.

The deeply unpopular austerity measures have divided the Greek government and people have rioted on the streets for more than one week. Greek Prime Minister George Papandreou will seek a vote of confidence in the Parliament on Tuesday.

The European markets declined nearly 1% and indexes in Hong Kong, Mumbai and Shanghai fell. The inflation worries dragged markets in China region and worries of capital gains taxes on investment routed through Mauritius dragged Mumbai lower by 2%.

PNC Financial Buys RBC Bank

The PNC Financial Services Group, Inc. and Royal Bank of Canada today announced that they have signed an agreement for PNC to acquire RBC Bank (USA), the U.S. retail banking subsidiary of Royal Bank of Canada, for $3.45 billion, or $112 million discount to tangible book value.

Colgate Purchases Sanex Personal Care Brand

Colgate-Palmolive Company completed the purchase of the Sanex personal care brand from Unilever PLC for €672 million or approximately $952 million.

Sanex is a premium-priced personal care brand with a distinct positioning around healthy skin and strong market share positions in Europe.

Boeing Wins Order from Qatar Airways

Boeing said it received an order from Qatar Airways Ltd. for six Boeing 777-300ERs airplanes. The order is valued at $ 1.7 billion at list prices. Qatar Airways currently operates 25 777s, with 15 more pending for delivery.

Ford Invests on Lincoln Overhaul

Ford Motor Co. is spending $1 billion to develop seven all-new or significantly upgraded vehicles that its Lincoln brand will roll out over the next four years, the Wall Street Journal reported, citing dealers who were briefed by the company.

Rexam Sells Closures

Rexam PLC, the global consumer packaging company agreed to sell its beverage and specialty closures business to Berry Plastics for $360 million in cash, subject to certain asset adjustments. The net proceeds will be used to reduce net debt.

ING Proposes Selling Car Lease Unit

ING Group NV, the Dutch financial services company confirmed recent market speculation and said it is looking to sell ING Car Lease, the European car-leasing unit in a deal worth €4 billion or about $5.7 billion to free up more capital.

Earnings Review

Agrium Inc. ((AGU)), the Canadian fertilizer giant forecasted earnings per share from continuing operations for the second quarter in a range of $4.10 to $4.40 per share, up from the prior range of $3.38 to $3.88 per share.

Nabors Industries Ltd. ((NBR)), the land drilling contractor stated that its second quarter operating income is expected to be $165 million to $170 million, mainly due to lower-than-expected results from its Pressure Pumping, U.S. Offshore, and International businesses.

Panasonic Corporation ((PC)), the Japanese multinational consumer electronics corporation said it estimates net income of 30 billion yen or 12.97 yen per share for fiscal year ending March 31, 2012. Also, net sales for the full year are estimated to be 8.70 trillion yen.

PetSmart, Inc. ((PETM)), the specialty provider of products, services and solutions for the lifetime needs of pets announced a 12% increase in its quarterly dividend to $0.125 cents beginning in the second quarter of 2011.

The company''s board also authorized a new $450 million stock buyback program, which is to be implemented from August 1st, 2011.