- AT&T buys T-Mobile USA. AT&T (NYSE:T) announced yesterday it would buy T-Mobile USA from Deutsche Telekom (OTCQX:DTEGY) for $39B in cash and stock, creating America's largest mobile-phone company and pushing Verizon Wireless (NYSE:VZ) to second place in the market. JPMorgan (NYSE:JPM) will lend AT&T $20B for 18 months to fund the $25B cash portion of the bid, and Deutsche Telekom will get an 8% stake in the U.S. carrier. AT&T, which is looking for growth after losing its exclusive hold on the iPhone (NASDAQ:AAPL), said the deal "quickly provides the spectrum and network efficiencies necessary for AT&T to address impending spectrum exhaust in key markets driven by the exponential growth in mobile broadband traffic on its network." While the combination of two of the country's largest wireless providers will likely draw significant antitrust scrutiny, AT&T executives expressed confidence that the market will remain sufficiently competitive to allay any regulatory concerns. In German trading, Deutsche Telekom +13.8%. In U.S. premarket, T +1.9%, VOD +4%, S -5% (7:00 ET).
- Oil climbs as coalition attacks Libya. A no-fly zone has effectively been established over Libya, said Vice Admiral Bill Gortney from the Pentagon, and the coalition's aerial attacks have driven back Gaddafi's offensive against the rebel stronghold at Benghazi. Gaddafi vowed to repel 'enemy Christian states.' The coalition, which includes the U.S., U.K., France, Canada, Qatar and several other nations, has amassed at least 25 ships off the coast of Libya. Growing concerns about oil supply disruptions in Libya and in the broader region sent crude futures +2.1% to $103.17 (7:00 ET). Over the weekend, Shokri Ghanem, chairman of Libya’s National Oil Co., said the country's oil production has fallen to less than 400K barrels per day, down from 1.6M barrels per day in January. Ghanem warned that unless foreign firms restart their operations, Libya may be forced to award new oil and gas concessions directly to companies in countries like China, India and Brazil in order to boost production.
- China blocks Gmail access. Google (NASDAQ:GOOG) said this morning that the Chinese government is interfering with its Gmail service, making it difficult for users in China to access their email. "There is no technical issue on our side; we have checked extensively," Google said in a brief statement. "This is a government blockage carefully designed to look like the problem is with Gmail." China's Foreign Ministry declined to comment. Premarket: GOOG +0.7% (7:00 ET).
- Rio extends Riversdale bid, eyes diamonds. Rio Tinto (NYSE:RIO) extended its sweetened $3.9B bid for Riversdale Mining (OTC:RFLMF) by another three days, as it tries to woo reluctant shareholders. Rio needs to get 50% of shareholders to accept its A$16.50/share offer by March 28, and as of this morning had received acceptances on 34.94% of Riversdale shares. If Rio doesn't get its 50% acceptance by March 28, the offer will revert to A$16/share and remain open until April 6. Separately, sources said Rio, which makes most of its money from iron ore but also has a sizeable diamond business, is planning a push into Russian diamond mining and considering a tie-up with state-owned miner Alrosa. Premarket: RIO +2.7% (7:00 ET).
- Barclays sells property assets. Barclays (NYSE:BCS) is selling a portfolio of real estate loans to CreXus (NYSE:CXS), a property investment trust, for $586M. The sale is part of Barclays' efforts to shed non-core assets. Premarket: BCS +2.9% (7:00 ET).
- Insurers guess at Japan costs. Swiss Re (OTC:SWCEY) said it expects claims costs of $1.2B as a result of Japan's earthquake and tsunami, but warned there is a higher than usual degree of uncertainty attached to that estimate and it may be revised accordingly. Separately, AIG (NYSE:AIG) said late Friday that it expects to post around $1B in pre-tax catastrophe losses in the first quarter. Around 70% of that sum stems from Japan's earthquake and tsunami. The rest comes from flooding in Australia, U.S. winter storms, an earthquake in New Zealand, and a cyclone and flooding in Brazil. Premarket: AIG +1.6% (7:00 ET).
- Lundin board spurns Equinox offer. Lundin Mining's (OTCPK:LUNMF) board recommended shareholders reject a C$4.7B ($4.8B) unsolicited takeover bid from Equinox Minerals (OTC:EQXMF), saying the bid undervalued the company and carried too much uncertainty. The rejection was widely expected; Lundin shareholders are getting ready to vote on a planned C$9B merger of equals with Inmet Mining (OTC:IEMMF).
- Boeing successfully tests 747. Boeing's (NYSE:BA) newest 747 passenger jet had a successful maiden test flight yesterday; assuming flight-test certification goes smoothly, Boeing expects to deliver the first of the jets by the end of the year. It's a much-needed victory for Boeing, whose Dreamliner and 747 Freighter program are both years behind schedule.
- Nissan to resume Japan production. Nissan (OTCPK:NSANY) will become the first automaker to resume regular parts production and vehicle assembly in Japan following the country's devastating earthquake. Other automakers are still trying to assess the potential damage to their plants and supply chains, while GM (NYSE:GM) went so far as to halt all nonessential spending while it assesses the situation. A Nissan spokesman noted that the company isn't better-positioned to procure parts under the current circumstances than any of its rivals, suggesting if Nissan is ready to restart production, other automakers should be as well.
- Gulf slick is likely from dredging. The Coast Guard investigated reports that a three-mile-long oil sheen had been spotted in the Gulf of Mexico, and confirmed that there was indeed a substance on the water, but said it is most likely a plume of silt from a dredging operation on the Mississippi River. The Coast Guard is continuing to test the substance and will have a more definitive report soon.
Earnings: Monday Before Open
- Tiffany (NYSE:TIF): Q4 EPS of $1.44 beats by $0.05. Revenue of $1.1B (+12.2% Y/Y) in-line. (PR)
- In Asia, Japan closed. Hong Kong +1.7% to 22685. China +0.1% to 2910. India -0.2% to 17839.
- In Europe, at midday, London +1.3%. Paris +1.9%. Frankfurt +2.2%.
- Futures at 7:00: Dow +1%. S&P +1.1%. Nasdaq +1.2%. Crude +2.1% to $103.17. Gold +0.8% to $1427.80.
Monday's Economic Calendar
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
- Notable earnings before Monday's open: TIF
The SA Currents team contributed to this post.
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