- Kraft seals Cadbury deal. This morning Kraft (KFT) announced a recommended deal to buy Cadbury (CBY) for £11.9B ($19.4B), or 840 pence per share, in addition to a 10 pence dividend. The new terms followed friendly talks late last night between the two companies, and Cadbury board members have unanimously recommended to shareholders to accept the offer. Premarket: KFT -1%, CBY +5.7% (7:00 ET).
- Tyco on the brink of U.S. expansion. Tyco International (NYSE:TYC) announced it will buy Brink’s Home Security Holdings (CFL) for around $2B in cash and stock, approximately a 35% premium over Brink's Friday closing price. The deal is the latest in the sector's gradual consolidation, and combines two of the top companies in the North American security industry. Premarket: TYC +1.2%, CFL +32.1% (7:00 ET).
- Berkshire heads for share split. Berkshire Hathaway (BRK.A, BRK.B) is widely expected to approve a 50-to-1 share split of its Class B shares tomorrow, in one of the biggest structural shakeups the company has seen in years. The move will bring the share price down to around $65 from Friday's $3,247, making it likely that trading volume will increase and potentially opening up the stock for inclusion in the S&P 500. Separately, Berkshire announced a 1.3B Swiss franc ($1.26B) deal on Monday to buy a block of life insurance business from Swiss Re (OTC:SWCEY).
- JAL falls to bankruptcy. As expected, Japan Airlines filed for the country's fourth-largest bankruptcy today. The airline will be delisted, wiping out shareholders. As part of its ¥900B ($10B) turnaround plan, JAL will slash 15,700 jobs, cut unprofitable routes and retire older planes.
- E-book talks for Apple's tablet. Publisher HarperCollins (NASDAQ:NWS) is reportedly negotiating with Apple (NASDAQ:AAPL) to make e-books available for an Apple tablet. Details are still up in the air, but HarperCollins would likely set the price of the books, which would come with bonus features, and Apple would take a cut of the sales. Apple is widely expected to unveil a tablet device at its Jan. 27 media event.
- Sinopec, BP talk about tie-up. Sinopec (NYSE:SNP) said it's in talks with BP (NYSE:BP) over a potential collaboration in the exploration and development of shale gas. The discussions, which Sinopec said were going "smoothly," reflect the growing international interest in China's shale gas fields.
- European countries warn against MSFT browser. German and French agencies made the unusual move of warning users against Microsoft's (NASDAQ:MSFT) Internet Explorer browser, suggesting users switch to alternatives. The warning stemmed from the security hole in IE that hackers recently exploited to attack Google (NASDAQ:GOOG) and other companies. Microsoft challenged the recommendations, and said users should instead upgrade to the latest version of its browser.
- China blamed for Indian hack attack. Indian officials said there was an attempted cyber-attack on Indian government computers, and that Chinese hackers are likely to blame. Chinese officials said such claims "are entirely without basis," and noted that China itself is one of the biggest victims of cyber-attacks.
- Google delays China phone launch. Google (GOOG) postponed the planned launch of its mobile phone in China today, without specifying why the launch was delayed or when it might be rescheduled. The move comes as Google and China face off over internet censorship and a recent cyber-attack.
- Williams Cos. creates major nat-gas partnership. Williams Cos. (NYSE:WMB) is reportedly planning to restructure by merging Williams Partners and Williams Pipeline Partners, creating in the process one of the largest natural-gas partnerships in the country. Williams Cos. will receive 80% ownership in the combined entity, valuing its stake at $6.2B, and will receive $3.5B in cash to pay down debt. A merger announcement is expected today.
- Unisys sells health unit. Unisys (NYSE:UIS) agreed to sell its health information management business to Molina Healthcare (NYSE:MOH) for $135M in cash.
- U.K. faces rating risk. The U.K.'s triple-A rating is "extremely vulnerable" and the economic and political situation is "highly toxic," warned Standard Life, one of the U.K.'s largest money-management firms. Earlier this month, Pimco said there's an 80% chance of a U.K. downgrade unless the government changes its deficit reduction plans. Separately, data released this morning showed U.K. prices rose a higher-than-expected 0.6% in December, bringing the annual rate up to 2.9% and raising speculation that interest rates may be increased faster than expected. The news sent the pound to a four-month high against the euro.
Earnings: Tuesday Before Open
- New Oriental Education & Tech. Group (NYSE:EDU): FQ2 EPS of $0.03 misses by $0.02. Revenue of $61.2M (+24%) vs. $61.8M. (PR)
- In Asia, Nikkei -0.8% to 10,765. Hang Seng +1% to 21,678. Shanghai +0.3% to 3,247. BSE -0.9% to 17,486.
- In Europe at midday, London -1%. Paris -0.9%. Frankfurt -1%.
- Futures: Dow -0.2%. S&P flat. Nasdaq flat. Crude +0.2% to $78.15. Gold +0.7% to $1,138.40.
Tuesday's Economic Calendar
9:00 Bank of Canada Announcement
9:00 International Capital Flow
10:00 State Street Investor Confidence Index
1:00 PM NAHB Housing Market Index
5:00 PM ABC Consumer Confidence Index
- Notable earnings before Tuesday's open: AMTD, C, EDU, FAST, FHN, FRX, MMR, PH
- Notable earnings after Tuesday's close: CREE, CSX, FULT, IBM, WIT
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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