- Sealed Air to buy Diversey for $4.3B. Sealed Air (NYSE:SEE) has agreed to buy privately-held Diversey in a cash-and-stock deal worth $4.3B. Diversey is a "leading solutions provider to the global cleaning and sanitization market."
- SAC facing another probe. The SEC is investigating SAC Capital for possibly using inside information to profit from AstraZeneca's (NYSE:AZN) $15B takeover of biotechnology firm MedImmune in 2007, sources said. The probe is in addition to inquiries into the hedge fund's trading activities by New York federal prosecutors and by Iowa Senator Charles Grassley. The SEC investigation is part of a broad inquiry into trading by various hedge funds in stocks connected to some of the biggest healthcare deals of the past decade. News of the probe comes ahead of the start today of the insider-trading trial of Winifred Jiau, a former consultant with 'expert networking' firm Primary Global Research.
- Nokia continues to plummet after earnings warning. Shares in Nokia (NYSE:NOK) fell -9.5% premarket after plunging 14.4% yesterday following an earnings warning. The stock is trading at its lowest level in more than 13 years. Analysts slashed their price targets for the cell phone maker and questioned whether it could ever recapture lost market share. "Symbian smartphone sales are falling off faster than expected and we are skeptical that new Windows Phone models will be able to replace lost profits," said one analyst. Nokia said Q2'11 phone sales will be 'substantially below' its previous forecast and it abandoned its full-year outlook, blaming difficult conditions in China and Europe.
- Axa to sell Canadian ops to Intact for $2.7B. France's Axa (OTCQX:AXAHF) has unveiled a five-year plan to boost profits and cut debt, the start of which is the sale of its Canadian business to Intact Financial (OTCPK:IFCZF) for C$2.6B ($2.7B). Under the program, Europe's second-largest insurer is aiming for underlying growth of 10% percent in EPS by 2015 and to make €1.5B ($2.16B) in pre-tax cost savings, also by 2015. For Intact, Canada’s largest property and casualty insurer, the deal will generate an internal rate of return of 20%, increase annual operating EPS by 15% in the 'mid-term,' and save at least C$100M a year through cost cuts.
- Schneider to buy Telvent for $1.4B. France's Schneider Electric (OTCPK:SBGSY) has agreed to buy Telvent (NASDAQ:TLVT), a developer of software for 'smart' electricity grids, for about $1.4B. The offer of $40 a share represents a 16% premium to Telvent's close yesterday. The transaction has a strong chance of being accepted by Telvent's shareholders, as Spanish construction-to-energy conglomerate Abengoa will sell its 40% stake in Telvent to Schneider as part of the deal.
- Yahoo reaches phone and Alibaba deals. Yahoo (NASDAQ:YHOO) has forged an agreement for Taiwan semiconductor company MediaTek to integrate the U.S. firm's Web offerings into chips for mobile phones. Incorporating services such as instant messaging, e-mail and Flickr will provide traditional phones capabilities similar to those of smartphones. Chips made by MediaTek, one of the largest suppliers in the world to the cell phone sector, go largely into handsets sold in China and other emerging markets. Yahoo's partnership with Mediatek comes as Yahoo reportedly moves towards resolving a dispute with China's Alibaba (OTC:ALBCF) over the transfer of its Alipay online payments business to Alibaba CEO Jack Ma.
- Pfizer and Teva settle over epilepsy drug. Pfizer (NYSE:PFE) and Teva (NASDAQ:TEVA) have settled a patent lawsuit over generic versions of Pfizer's Neurontin epilepsy drug. In the deal, financial terms of which weren't disclosed, Teva will be allowed to continue selling the copy of Neurontin under license from Pfizer. The latter was seeking compensation for profit it lost when sales plunged to $150M in 2005 from $2.5B the previous year because of the low-cost competition from generic treatments. The settlement ended a trial that was under way in federal court.
- FDA reviews safety of birth control pills. The FDA is reassessing the safety of birth control pills that contain the hormone drospirenone, including Bayer's (OTCPK:BAYRY) Yaz suite of products, which generated $1.47B in sales last year. The review follows two recent reports that found that women taking the pills had a two-to-threefold greater risk of blood clots. The FDA expects to receive the results of a study of 800,000 people later this summer.
- WHO: Cell phones may cause cancer, maybe. Using a mobile handset may increase the risk of getting certain types of brain tumors, a report (.pdf) from a World Health Organization agency said, although the research does contain caveats. Citing a summary of studies, the International Agency for Research on Cancer said this is the first time an agency working group has surveyed research on radio frequency electromagnetic fields from handsets to make a definitive recommendation. However, the IARC also said the evidence is 'limited', while a senior official said "it's not...clearly established that the use of mobile phones does in fact cause cancer."
- Schmidt's Facebook admission. Former Google (NASDAQ:GOOG) CEO Eric Schmidt believes his biggest mistake as head of the search company was his inability to cope with the threat from Facebook. "I screwed up," he said at a tech conference. Google attempted to partner with Facebook, which would have provided access to the latter's trove of data about Web surfers and their friends, but was rebuffed. Schmidt also disclosed that Google has recently renewed a partnership with Apple (NASDAQ:AAPL) to provide map technology to the iPhone and iPad. At the conference, the company launched Google Offers, a daily discount service similar to that of Groupon.
- Bank incompetence stalls foreclosures. Attempts to repossess homes are being prevented in some cases by delinquent borrowers showing courts that banks failed to properly assign ownership of their mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say lenders backdated or fabricated documents to fix those errors. The problems come as banks are mired in a massive backlog of foreclosures, which, as one economist indicated, is hitting house prices. Yesterday's S&P/Case-Shiller (.pdf) index showed that prices in 20 cities dropped in March to mid-2002 levels. The report described the data as "the confirmation of a double-dip in home prices across much of the nation."
- California assembly approves online sales tax. California's lower house has passed a bill that would require Internet companies such as Amazon (NASDAQ:AMZN) to collect sales tax for online purchases by state residents. Amazon has threatened to sever ties with more than 10,000 affiliates in California over the issue, and in February the company said it would close a facility in Texas for the same reason. The bill will now go to California's Senate for approval.
Earnings: Wednesday Before Open
- Vimpel-Communications (NYSE:VIP): Q1 EPS of $0.46 beats by $0.13. Revenue of $2.74B (+22.9% Y/Y) misses by $0.02B. (PR)
Earnings: Tuesday After Close
- Phillips-Van Heusen (NYSE:PVH): Q1 EPS of $1.23 beats by $0.07. Revenue of $1.37B (+121% Y/Y) in-line. Shares +2% AH. (PR)
- In Asia, Japan +0.3% to 9720. Hong Kong -0.2% to 23626. China +0.0% to 2744. India +0.6% to 18609.
- In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt -0.2%.
- Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -0.3% to $102.35. Gold -0.25% to $1532.00.
Wednesday's Economic Calendar
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
7:45 ICSC Retail Store Sales
8:15 ADP Jobs Report
8:55 Redbook Chain Store Sales
10:00 ISM Manufacturing Index
10:00 Construction Spending
12:00 PM Fed's Pianalto: Labor Markets and Federal Reserve Policy'
12:30 PM Fed's Tarullo: 'U.S. and international financial regulatory reform'
2:00 PM Hearing: Fed Lending Disclosure
The SA Currents team contributed to this post.
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