- Debtholders disappointed by opaque Dubai. Dubai World made no specific proposals on a debt standstill at an "expectation management exercise" with its creditors this morning, the first meeting since it requested a standstill on $59B in debt on Nov. 25. The lack of any concrete plan dismayed investors, who have been left in the dark for weeks. Dubai's flagship company had been expected to formalize a request for a payment standstill at the meeting, until it tempered expectations in an email to debtholders, saying its two-hour presentation would offer only a glance at its financial situation.
- GE, Safran snag lucrative plane deal. GE (NYSE:GE) and French aerospace group Safran won a contract to manufacture engines for China's future C919 aircraft worth an initial $5B for each company, and potentially many times that over coming decades if China succeeds in its plan to become a player in the passenger plane market dominated by Boeing (NYSE:BA) and Airbus. The Chinese aircraft will be equipped with Leap X turbofan engines, the latest developed by Safran in concert with GE. United Technologies' (NYSE:UTX) Pratt & Whitney and Goodrich (NYSE:GR) were also in the running.
- Sanofi buys Chattem for $1.9B. Sanofi-Aventis (NYSE:SNY) will acquire consumer healthcare firm Chattem (CHTT) for $1.9B, or $93.50/share in cash - a 34% premium to Friday's close. The transaction creates the world's No. 5 consumer healthcare company by revenues, combining Chattem's leading U.S. with Sanofi-Aventis' strong international presence in the sector. Chattem has over two-dozen branded products, including dental analgesic Benzodent, topical analgesic Aspercreme, Icy Hot joint and muscle pain reliever, and Pamprin menstrual symptom reliever.
- Bucyrus pays $1.3B for Terex's mining division. Bucyrus International (NASDAQ:BUCY) will acquire Terex's (NYSE:TEX) mining equipment division, with about $1B in annual sales, for $1.3B. Terex's wares are generally smaller than the heavy-duty mining equipment made by Bucyrus for global mining giants such as Rio Tinto (RTP) and BHP Billiton (NYSE:BHP). The deal is structured in cash, but Terex has the option over the next few days to accept $300M in Bucyrus stock. Bucyrus said the acquisition will create a "premier supplier of mining equipment," and double its addressable market to $30B from $15B. Greenhill (NYSE:GHL) advised Bucyrus, Goldman Sachs (NYSE:GS) advised Terex, and JPMorgan (NYSE:JPM) is leading a $1.2B term loan to finance the deal. TEX +5.5% premarket.
- Strong China sales bolster Japan. Japan posted a bigger-than-expected ¥374B trade surplus in November after exports to Asia rose for the first time in more than a year - surging 4.7% on a 7.8% gain on shipments to China - helping to ease concerns about the fragility of Japan's economic recovery. Separately, the Bank of Japan kept its economic outlook unchanged in December, suggesting the central bank is still monitoring the effects of previous policy measures. Conditions are "picking up mainly due to various policy measures taken at home and abroad," BOJ said, but added, "there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand."
- Shell to shrink Nigeria stake. Sources say Royal Dutch Shell (NYSE:RDS.A) plans to auction off $5B worth of oilfields in Nigeria as the country prepares to impose harsher terms on foreign operators. Shell's decision to reduce its reliance on Nigeria - once its primary growth engine - signals a huge shift. For decades, Shell persisted despite rampant piracy and a long-running campaign of militant violence. But with new projects in the Gulf of Mexico and Qatar near completion, CEO Peter Voser appears ready to reduce Shell's exposure to Nigeria. Two state-owned Chinese firms - Sinopec (NYSE:SNP) and CNOOC (NYSE:CEO) - are seen as frontrunners for the stake.
- Saab's admirers won't let it die. GM said it received inquiries from "several parties" after throwing in the towel on Friday and saying it would shutter its Saab unit. One of the approaches was from Spyker, which submitted a revised bid which it believes deals with all the issues uncovered during due diligence - over which talks fell apart last week.
- Yelp walks away from Google. Yelp reportedly shunned an all-but-signed deal to be acquired by Google (NASDAQ:GOOG) for about $550M plus earnouts over the weekend, indicating it plans to stay independent. TechCrunch, which broke both the sale story and its subsequent collapse, believes it's likely a large player (AAPL, MSFT...) offered Yelp a strategic partnership that gave the local business review website the confidence to say no.
- Healthcare bill passes crucial test. The Senate voted 60-40 to advance healthcare legislation in an initial procedural vote early Monday, putting the blockbuster bill on track for passage by Christmas Eve. The Senate bill, which is likely to form the core of any final bill, leaves existing employer-based health-insurance benefits largely intact. Last-minute additions toughened restrictions on insurers, including barring them from denying coverage to children with pre-existing conditions. The House is likely to forfeit its planned government-run insurance plan, and a surtax on the wealthy - taxing instead high-value insurance plans. Insurers say the bill will increase costs, but note modest improvements.
- Citadel files for Ch. 11. Citadel Broadcasting (OTC:CTDB) the No. 3 U.S. radio broadcaster, filed for bankruptcy protection Sunday, hoping to convert a $2.1B credit facility into a new term loan of $762.5M, and extinguish $1.4B in debt. Senior lenders would receive a portion of the new loan and 90% of the new common stock in reorganized Citadel. CEO Farid Suleman said business will continue as usual, and that Citadel would seek to emerge from restructuring as quickly as possible.
- Alcoa, Saudi's Maaden in $10.8B aluminum JV. Alcoa (NYSE:AA) inked a 40/60 joint venture with Saudi state-run Maaden to develop a $10.8B aluminum complex, though both companies said they were still considering how to raise money for the deal. Asked whether Alcoa would conduct a capital raise or seek debt financing, CEO Klaus Kleinfeld said only that a variety of funding options were being considered.
- Duke may partner with China on U.S. power grid. Duke Energy (NYSE:DUK) is reportedly in talks with State Grid, China's biggest electricity distributor, over a JV that may involve installing power transmission lines in the U.S. American utilities are keen to tap China's low-cost equipment and access to cheap credit to pursue capital-intensive projects. Duke spokesman Tom Williams said the company is interested in partnering with Chinese companies on transmission line projects in the U.S., but added the talks are in their early stages.
- Swiss banks face massive increase in cash reserves. Sources say UBS (NYSE:UBS) and Credit Suisse (NYSE:CS) may have to almost triple their cash holdings relative to customer deposits (to 45%) under new proposals being considered by Swiss regulators. The banks, not surprisingly, are said to be in talks to soften the requirements.
- No Nook? Here's $100! Barnes & Noble (NYSE:BKS) told customers who pre-ordered its Nook ebook reader that if their $259 devices don't arrive by Dec. 24, they will be given a $100 online gift certificate. A spokesman says the majority of orders promised for delivery by Dec. 24 will arrive on time. There's also speculation B&N is planning a "major upgrade" to address some of Nook's shortcomings as soon as this week.
Asia markets were mixed Monday. Europe stocks opened higher, and U.S. futures are up a drop in an extremely light overnight session.
- Asia: Nikkei +0.4% to 10183. Hang Seng -1.1% to 20948. Shanghai +0.3% to 3123. BSE -0.7% to 16601.
- Europe at midday: FTSE +1% to 5249. CAC +0.7% to 3823. DAX +0.7% to 5870.
Futures: Dow +0.3% to 10301. S&P +0.4% to 1102. Nasdaq +0.4%.
Crude +0.7% to $74.95. Gold +0.3% to $1,114.70.
30-year Tsy -0.48% to 117-22. 10-year -0.21%. 5-year -0.11%.
Euro flat vs. dollar. Yen flat. Pound -0.1%.
Monday's Economic Calendar
8:30 Chicago Fed National Activity Index
10:00 Fed's Evans on CNBC live
- Notable pre-market earnings: CAG
- Notable post-market earnings: JBL
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