- ABB to buy Baldor. ABB Ltd. (ABB) announced it will buy Baldor Electric (BEZ), a maker of factory robots and electrical equipment, for $3.1B, and will also assume $1.1B of net debt. The $63.50/share deal, a 41% premium to Baldor's closing price yesterday, will "substantially improve ABB’s access to the industrial customer base in North America." The energy and power sector has been the most active for M&A this year, with $422B of deals to date.
- Google nears Groupon deal. Google (GOOG) is said to be nearing a deal to buy e-commerce coupon website Groupon for as much as $5B-6B, with an announcement possible as soon as this week. A deal valuation that high would make this Google's largest acquisition to date, and some say a foolish one, as Groupon's business model is seen as fairly easy to duplicate. The valuation is also twice as high as previous whispers about the deal had suggested. Google is undoubtedly betting that becoming the market leader in the fast-growing market of locally-tailored discounts will ultimately prove lucrative. Yahoo (YHOO) had also been interested in Groupon, sources said, but its bid range of around $2B was deemed too low. Premarket: GOOG -0.9% (7:00 ET).
- Google faces EU antitrust probe. The European Commission is launching a formal antitrust investigation into whether Google (GOOG) has abused its position as the dominant player in online search. The probe was prompted by complaints from other online search providers that Google had put them at an unfair disadvantage.
- Seagate ends bid to go private. Seagate Technology (STX) called off discussions with private-equity firms over possibly selling itself, telling shareholders the valuations didn't appear to be sufficiently attractive. Instead, Seagate will begin a $2B share repurchase. The company also released some projections for the December 2010 quarter, and expects revenue of $2.7B and a gross margin of at least 19.5% vs. analysts' expectations of 19.12%. Shares closed -6% in after-hours trading.
- Insider-trading probe expands, but targets still unclear. Diamondback Capital Management, among the hedge funds searched by the FBI last week, said the raid was focused on one of its employees, who was put on leave. Diamondback also disclosed that it received a federal grand jury subpoena and is cooperating with a probe that includes research consultants but was told by the government it isn’t the target of the probe. Attorney General Eric Holder confirmed a criminal investigation into Wall Street insider trading is 'ongoing' and 'very serious,' but declined to provide details. Sources also said Gerson Lehrman Group, the nation's largest 'expert-network firm,' could be drawn into the probe as well.
- Level 3 slams Comcast. Level 3 (LVLT) issued a strongly-worded statement late yesterday accusing Comcast (CMCSA) of threatening the open internet and abusing its market dominance. Comcast informed the company last week that it would begin collecting a recurring fee for the transmission of certain web content, and Level 3 said it felt it has no choice but to comply despite the 'violation in spirit' of net neutrality. Comcast's decision could cause damage to Level 3, which recently won a deal to help Netflix (NFLX) deliver its shows, and could impact Comcast's proposed takeover of NBC Universal (GE).
- Morgan Stanley's CICC stake to change hands. China International Capital Corp (CICC), China's top investment bank, won regulatory approval for a shareholding change involving a stake of more than 5%. The statement by Chinese regulators didn't specify which shareholder was involved, but a CICC spokeswoman said "we do not deny that it has to do with Morgan Stanley." Sources said private-equity firms KKR (KKR) and TPG Capital plan to buy stakes of around 11% each from Morgan Stanley (MS) for a total value of around $1B. Morgan Stanley has been working to dispose of its 34.3% stake.
- BP commits to oil sands project. BP (BP) is pushing ahead with a controversial plan to extract oil from Canadian sands, calling it a 'significant milestone' as JV partner Husky Energy (OTCQB:HUSKF) gave the green light for the project's first phase. Environmentalists are likely to protest, as are some shareholders since BP owns 50% of the venture but will completely fund the first $2.5B spent on the project. This is BP's first large new commitment since the Deepwater Horizon disaster in April. Premarket: BP -1.55% (7:00 ET).
- Toyota to fix Prius flaw. Toyota (TM) will pay to fix around 650,000 Prius hybrids worldwide because of a glitch that could cause the car to overheat and lose power. The repair campaign is not a formal recall, and Toyota said the flaw poses no safety risk. Premarket: TM -1.6% (7:00 ET).
- Obama calls for federal pay freeze. Federal workers are less than thrilled with President Obama this morning, after his call yesterday for a two-year pay freeze for federal civilian employees. The White House said the action is expected to save $2B for the rest of fiscal 2011; a nice number on paper, perhaps, but just a drop in the bucket next to this year's estimated $3.8T budget. (More: Deficit panel divided on next step)
Earnings: Tuesday Before Open
- Seadrill Ltd (SDRL): Q3 EPS of $0.85 beats by $0.06. Revenue of $1.08B (+15.2%) in-line. Shares -4.2% premarket. (PR)
- Trina Solar (TSL): Q3 EPS of $1.08 beats by $0.21. Revenue of $508.3M (+103.5%) vs. $420.6M. (PR)
- In Asia, Japan -1.9% to 9937. Hong Kong -0.7% to 23008. China -1.6% to 2820. India +0.6% to 19521.
- In Europe, at midday, London +0.2%. Paris -0.1%. Frankfurt +0.6%.
- Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -0.5% to $85.32. Gold +0.6% to $1373.60.
Tuesday's Economic Calendar
- 7:45 ICSC Retail Store Sales
8:30 ISM New York Business Index
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
9:45 Chicago PMI
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
12:30 PM Fed's Kocherlakota: Monetary and Fiscal Policy
3:00 PM Bernanke: Conversation on the Economy
3:00 PM USDA Ag. Prices
6:00 PM Fed's Lacker: The Future of Finance
- Notable earnings before Tuesday's open: SDRL, TSL
- Notable earnings after Tuesday's close: OVTI
Seeking Alpha's Market Currents team contributed to this post.
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