Deals for Allergan and Baker Hughes Dominated Monday Trading

Nichole Harper
17 Nov, 2014
New York City

Stocks on Wall Street lacked direction and two large deals dominated news. Baker Hughes agreed to a merger proposal from Halliburton Co for $34.6 billion and Allergan In accepted $66 billion offer from Actavis Plc. Japan entered a technical recession after the second quarter growth faltered.

[R]4:05 PM New York – Stocks on Wall Street lacked direction and two large deals dominated news. Baker Hughes agreed to a merger proposal from Halliburton Co for $34.6 billion and Allergan In accepted $66 billion offer from Actavis Plc. Japan entered a technical recession after the second quarter growth faltered.[/R]

Stocks struggled on Monday morning after two large deals dominated news and investors were focused on unexpected economic growth decline in Japan.

Japan reported September quarter GDP shrank at 1.6% annual rate after the previous quarter decline was revised higher on the increase in sales tax. The decline was larger than expected and investors worried that the U.S. exports may struggle.

Japan and the euro zone has struggled in the last one year to revive the growth and the U.S. has regained the broader economic growth but the advances in the economy are patchy and uneven.

In addition, the sharp fall in the crude oil prices drove the consolidation in the oil services industry after Baker Hughes agreed to sell itself to Halliburton Co for $34.6 billion.

Separately, Allergan Inc agreed to be acquired by Actavis Plc for $66 billion trumping the takeover overtures from Valeant Pharmaceuticals International Inc.

In stock market trading, Tollbooth Index fell 0.3% or 30.74 to 9,812.08.

S&P 500 index increased 1.30 to 2,041.11 and the Nasdaq Composite Index slipped 17.27 or 0.4% to 4,671.24.

U.S. Movers

Actavis Plc, the Ireland-based specialty pharmaceutical company closes a deal to acquire Allergan Inc, the Botox maker to shield from hostile takeover offer from Valeant Pharmaceuticals International Inc.

Actavis likely to offered between $215 and $220 per share to Allergan, the buyout deal worth up to $65.5 billion.

Shares of Allergan, Inc surged 7.3% to $213.09.

Halliburton Company ((HAL)), the oilfield service provider become hostile with its rival Baker Hughes, Inc and offer in a cash-and-stock deal worth $34.6 billion.

On Friday, Baker Hughes confirmed the receipt of intention from Halliburton.

Shares of Baker Hughes soared 12.7% to $67.51.

European Markets

In London trading, FTSE 100 index edged up 0.07% or 4.95 to 6,659.32 and in Frankfurt the DAX index rose 0.09% or 8.52 to 9,261.46.

In Paris, CAC 40 index gained 0.1% or 5.10 to 4,207.56.

In the European corporate news, Hennes & Mauritz October sales soared 14%. Keller plunged despite positive outlook.

Mitie Group net swung to a loss to £3.3 million after revenues in the first-half edged up. Sonova profit jumped 6% to 173.6 million francs on 8% increase in revenues.

H & M Hennes & Mauritz AB, the Sweden-based clothing company said sales including value added tax in October soared 14% compared to the same month last year.

Sonova Holding AG, the Switzerland-based healthcare company reported group revenues in the first-half ending in September climbed 7.7% to 990.2 million francs from 947.8 million francs a year ago period.

Net profit in the period jumped 6% from a year ago to 173.6 million francs compared to 163.7 million francs and diluted earnings per share rose to 2.52 francs from 2.39 francs.

Asian Markets

Stocks in Tokyo dropped sharply after the economy shrank in the latest quarter unexpectedly.

On the economic front, in a preliminary report the Cabinet Office said gross domestic product in the third-quarter ending in September unexpectedly shrank by annualized 1.6% followed after revised 7.3% decrease in the second-quarter quarter ending in June.

The economy in the third-quarter dropped 0.4% from the previous quarter after a revised 1.9% decrease in April-June. Private consumption accounting for about 60% of the economy rose 0.4% from the previous quarter.

The Nikkei 225 Stock Average declined 517.03 or 2.9% to 16,973.80 and the broader Topix index dropped 34.28 or 2.5% to 1,366.13.

The yen closed at 116.29 against one dollar.

In Mumbai trading, the Sensex Index gained 131.22 or 0.5% to close at 28,177.88. The CNX Nifty added 40.85 or 0.5% to 8,430.75.

GMR Infrastructure, Ltd., the infrastructure service provider net loss in the second-quarter widened to Rs 610 crore compared to Rs 393 crore a same period last year.

Net revenues advanced 11% to Rs 2,682 crore.

Tata Motors Limited, the truck and motor vehicle maker net in the second-quarter slipped 7.1% to Rs 3,291 crore.

Revenues rose 6.5% to Rs 60,564 crore.