- Unilever aims for good hair day with Alberto buy. Unilever (UL, UN) will buy Alberto-Culver (ACV) for $3.7B ($37.50/share), a 33% premium to its 12-month average. ACV's portfolio includes TRESemme and Nexxus, Alberto VO5, St. Ives and Noxzema. Unilever, headquartered in London and Rotterdam, is the world's No.3 consumer products company behind Procter & Gamble (PG) and Nestle (NSRGY.PK). The acquisition "further skews Unilever to high growth, high margin personal care categories, gives a more rounded category presence in hair care and makes it global leader in hair conditioning, No.2 in shampoo and No.3 in styling," analyst Graham Jones said.
- Southwest to buy AirTran for $1.4B. Southwest Airlines (LUV) will buy AirTran (AAI) for $1.4B ($7.69/share) in cash and shares - a 69% premium to Friday's close. Each share of AirTran will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines' common stock. The purchase opens up Atlanta, the largest domestic market Southwest doesn't already serve, as well as Washington D.C., and allows LUV to boost its presence in key markets like New York and Boston. AAI +65% premarket. LUV -0.7%.
- Wal-Mart makes a move on Massmart. Wal-Mart (WMT) is in negotiations to buy South Africa's Massmart for $4.2B. The move would bolster Wal-Mart's emerging markets strategy as it seeks to reduce its dependency on U.S. sales. "By Wal-Mart standards this is a pretty chunky deal, and shows our commitment to the market," a Wal-Mart executive said.
- Europe's central banks halt gold sales. European central banks have all but stopped selling gold. Through September, eurozone banks (plus Sweden and Switzerland) sold just 6.2 tons from their reserves, down 96%. Until recently, central banks had been swapping bullion for sovereign debt, which yields a steady annual return. But now, they seem to be happier with the security of gold.
- QE 2.0 to arrive before year-end - economists. The Fed will boost its balance sheet by half a trillion dollars over the next half year, and keep it inflated for up to a year, economists say. In a new survey crafted to gauge sentiment on the Fed's QE policies, 70% of the respondents believed the Fed will restart quantitative easing; of those 80% think it will happen before year-end. "The trigger for the resumption of quantitative easing late this year will be an increase in unemployment back into double-digits," Moody's Mark Zandi said.
- AIG, gov't talk exit. Sources say AIG (AIG) is in talks with the Treasury on how the government will exit its position in the insurer. Plans, which could emerge as early as this week, will likely see the Treasury convert its $49B preferred stake into common shares - which could raise its stake in AIG to more than 90% from nearly 80% currently. The Treasury would then sell its shares to investors over time. AIG also owes the Fed $21B in loans, and the Fed also owns $25B in preferred shares in two of AIG's foreign life insurance units.
- Euro area growth slows, rocky waters ahead. The Conference Board's leading indicator for the euro area rose another 0.4% in August to 112.5 (2004 = 100), weaker than July's 0.8% increase and June's 0.5% increase. "The initial impetus of the recovery has been fading and the broad based cooling down of leading indicators is a reminder of the fragility of the recovery," the report said, predicting greater volatility in 2011 as governments phase in deficit reduction measures. The euro area LEI is now 17.8% above its March 2009 trough.
- Japan moves closer to double dip. Japan export growth slowed for the sixth straight month in August, underscoring Japan's recent moves to weaken the yen, and prompting speculation that the BOJ will ease already ultra-loose monetary policy next week. Exports rose 15.8% Y/Y, short of the 19% gain economists expected, and well below 2010's peak of 45.3% in February. Japan's GDP growth fell to just 0.4% in Q2 following a 4.4% rise in Q1.
- China shrugs off threat of duties. China called the House's approval of a bill that would allow the U.S. to apply import duties on goods from countries with undervalued currencies "redundant," saying it will allow the yuan to rise according to its own economic assessment and not due to U.S. pressure. The bill, which is to be voted on this week, is a first step to fulfilling threats to penalize Beijing for keeping its currency artificially weak. Meanwhile, on Sunday, China said it would impose import tariffs of up to 105% on U.S. poultry.
- Sanofi coy on higher Genzyme bid. Sanofi-Aventis (SNY) says it has not changed its $69/share offer for Genzyme (GENZ), but wouldn't comment on a report that it has lined up additional financing from Citigroup (C) and Bank of America (BAC). The French drugmaker wants to reach a friendly agreement but has not ruled out a hostile offer; Genzyme rejected Sanofi's offer in August, saying it dramatically undervalued the company.
- Talks between Santander, M&T stall. M&T Bank's (MTB) bid to buy Santander (STD) unit Sovereign Bank have died after they were unable to settle who would control the combined business, sources say.
- New Citi trader snags big payday. Sources say Citigroup's (C) new energy trader - UBS (UBS) defect Stephen Trauber - will earn about $30M over the next three years. The deal with Trauber comes months after pay czar Kenneth Feinberg ended his oversight of Citigroup's pay practices. For Citigroup, beset by ongoing concerns over banker defections, the hire was considered a coup. It's also a sign Citi believes it can pay employees without fear of government meddling.
- Asia: Japan +1.4%. Hong Kong +1%. China +1.4%. India +0.4%.
- Europe at midday:0 London flat. Paris +0.1%. Frankfurt +0.1%.
- Futures at 7:00: S&P +0.11%. 10-yr +0.17%. Euro -0.16% vs. dollar. Crude +0.43% to $76.82. Gold +0.13% to $1299.80.
Monday's Economic Calendar
- 8:30 Chicago Fed National Activity Index
10:30 Dallas Fed Manufacturing Outlook
12:00 PM Chicago Fed Midwest Manufacturing Index
- Notable earnings after Monday's close: JBL, PAYX
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