Omnicom, Publicis to merge in $35B mega deal. Omnicom Group (NYSE:OMC) and Publicis Groupe (OTCQX:PGPEF) have agreed to a 50:50 merger that will create the world's largest advertising firm with a stock market value of $35.1B and combined 2012 revenues of $22.7B, well above WPP's (NASDAQ:WPPGY) $16B. With about 22% of global ad spending digital, the deal is aimed at regaining some of the companies' power back from Silicon Valley giants such as Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB).
Perrigo to buy Elan for $8.6B. Pharmaceuticals company Perrigo (NASDAQ:PRGO) has agreed to acquire Irish peer Elan (NYSE:ELN) for $8.6B in cash and stock, with the $16.50-a-share bid representing a 10.5% premium to the latter's closing price of $14.93 on Friday. The combined firm will be incorporated in Ireland, where the tax base is 12.5%, a move that should reduce Perrigo's tax costs to the high teens from 30%. Elan's shares were +10.65% pre-market, while those of Perrigo were +0.7%.
Siemens poised to replace CEO Peter Loescher. Siemens (SI) is set to fire CEO Peter Loescher at a supervisory board meeting on Wednesday after the conglomerate issued the latest in a series of profit warnings last week. Loescher will reportedly try to fight for his job, although his prospects for success are low. If he does go down, he'll try to take Chairman Gerhard Cromme with him. Finance chief Joe Kaeser is the most likely candidate to replace Loescher. Siemens' shares were -0.1% pre-market.
Top Stock News
Tokyo leads Asian stocks into the red. Japanese shares (NYSEARCA:DXJ) led Asian stocks lower, pulled down by a possible delay or scaling back of a proposed increase in sales tax, as well as by yen (NYSEARCA:FXY) strength ahead of the Fed's monetary policy meetings this week. The yen has also been boosted by fears about China's (NYSEARCA:FXI) slowing growth and rising credit, factors that weighed on sentiment in Shanghai as well. U.S. stock futures were lower at the time of writing, although European shares were mostly higher, buoyed by mergers and earnings.
America Movil signals possible offer for KPN. America Movil (NYSE:AMX) has terminated an agreement to limit its holding in KPN (OTC:KKPNF) to below 30%, signaling that Carlos Slim's company could bid for the whole of the Dutch telecom group. America Movil, which owns 29.8% in KPN, was entitled to end the deal following Telefonica's (NYSE:TEF) €8.1B offer for E-Plus, KPN's German mobile unit. America Movil hasn't yet said what its plans are.
Michael Dell vows to fight on if he loses bid. Michael Dell plans to stay at Dell (NASDAQ:DELL) if his and Silver Lake's bid to take the company private is rejected. In a round of interviews, he reiterated that their increased proposal of $13.75 a share is their "best and final offer." If Carl Icahn's plan for a leveraged recapitalization were to go through, Michael Dell could refrain from tendering his shares, which would give him 42% of the company.
Amazon to add 7,000 workers. Amazon (NASDAQ:AMZN) plans to hire 5,000 more workers for 17 of its fulfillment centers in the U.S., adding to the 20,000 who already work at the company's warehouses across the country. Amazon also intends to recruit 2,000 customer-service staff, including part-time and seasonal workers. The hiring will help the company meet growing demand and make good on its two-day shipping pledge to Amazon Prime members.
Barclays to reveal capital-raising details tomorrow. Barclays (NYSE:BCS) intends to provide an update about its capital-raising plans when it presents its first-half results tomorrow, the bank said today. The company was reacting to a weekend report that it is exploring a £4B rights issue to meet regulatory requirements, and said it is in talks with the Prudential Regulatory Authority (NYSE:PRA) over its "financial and capital management plans." The regulator has said that at the end of 2012, Barclays' shortfall was £3B. Shares were -3.2% pre-market.
U.K. Serious Fraud Office to get £2M for Barclays probe. The U.K. Treasury is reportedly set to provide £2M to the country's Serious Fraud Office to enable the latter to broaden its investigation into Barclays' (BCS) 2008 fundraising activities. Investigators are looking into £66M in fees that Barclays supposedly paid Qatar, which invested in the bank and helped it avoid a bailout, and allegations the company loaned the Gulf state the money that it invested in Barclays.
Top Economic & Other News
Obama remarks don't look good for Keystone. President Obama has played down claims that TransCanada's (NYSE:TRP) Keystone pipeline would generate large numbers of jobs. "The most realistic estimates are this might create maybe 2,000 jobs during the construction...and then after that we're talking about somewhere between 50 and 100 jobs," Obama said. He will decide whether to approve Keystone based on its pollutive impact, but he isn't certain Canada is doing enough to resolve concerns about this issue.
Profit growth at Chinese industrial firms slows. Net income at Chinese industrial companies rose 6.3% on year to 502.4B yuan ($82B), but the growth fell sharply from 15.5% in May amid a cooling economy, increasing costs, moderating demand and overcapacity. Income from main business operations slipped 2.3% after climbing 8.8% a month earlier. In January-June, net earnings rose 11.1% to 2.58T yuan vs growth of 12.3% in January-May.
Lew plays down thoughts of Detroit bailout. Treasury Secretary Jacob Lew appears to have dismissed union calls to provide bankrupt Detroit with financial assistance. "Detroit's economic problems have been a long time in developing," Lew said. "I think Detroit's going to have to work with its creditors on this." In the Senate, Texas' John Cornyn has filed an amendment that would ban the federal government from bailing out financially troubled cities, while Lindsey Graham is also opposed to such rescues.
China to audit all government debt. China's National Audit Office will carry out an audit of all government debt following a request from the country's State Council. The study could indicate growing concern about the possible systemic risk of rising debt, especially at the local-government level, which has been estimated at 15-36% of GDP, or $3T. Earlier this month, Vice Finance Minister Zhu Guangyao said the government didn't precisely know the extent of the loans municipalities had taken out.
ECB may publish meeting minutes. The ECB is considering publishing minutes from Executive Board meetings, policy makers Joerg Asmussen and Benoit Coeure have said. Asmussen believes the minutes "should include who voted for what and why," a move some fear will lead lobbyists and political parties to hassle certain board members. Coeure reckons that publishing the minutes is "important for the effectiveness of monetary policy and for trust in the central bank."
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In Asia, Japan -3.3% to 13661. Hong Kong -0.5% to 21850. China -1.7% to 1976. India -0.8% to 19,593.
In Europe, at midday, London -0.2%. Paris +0.3%. Frankfurt +0.3%.
Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude -0.2% to $104.53. Gold +0.4% to $1328.70.
Notable earnings after today's close: AGNC, AMKR, ANH, APC, CMP, CYH, CZR, DENN , EAC, EEP, EMN, ESRX, FIRE, FMC,FVE, GGP, GIMO, HIG, HLF, JEC, LMNX, MAS , MTW, NATI, NTRI, OMI, PCL, PMCS,PRE, PSMI, SIMO, SONS, SPN, SSW, TXRH, VRTX , XL
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