Today's Market: Merger Monday And Google's New Content Deal

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Includes: AXS, BUD, GOOG, GOOGL, PRE, SAM, SBMRY, TAP
by: Matthew Smith

Summary

BUD continues to snap up US craft breweries as the company builds out its portfolio in the US.

PRE & AXS are merging as equals in a deal that will create one of the largest reinsurers in the world.

Google and the NFL signed a deal to allow the internet giant to show certain NFL content online, according to tech publication re/code.

After last week's move by the European Central Bank, the big news out of Europe has passed but the market's attention now shifts to the smaller news items such as elections and how the southern members of the euro will attempt to ramp up growth in an effort to pay down their debts. The conservative, anti-austerity groups continue to gain in popularity with the Syriza winning in Greece during the latest snap election.

There continue to be two sides to the argument of how to fix Europe, but with the latest moves by the ECB it certainly appears that Europe is joining the US and Japan in believing that stimulus and quantitative easing are the best ways to solve sluggish growth and work through debt issues.

Chart of the Day:

The euro's weakness from last week should carry through the end of the year with the ECB's bond buying program starting up in March. Today the euro is higher versus the US dollar, but it did trade below $1.12 today before moving higher. This might be the trade of the year for the currency market, especially if one believes that we see parity against the dollar by 2016.

Source: CNBC

We have no economic news today, but will see the news flow begin tomorrow.

The Asian markets are mostly higher today:

  • All Ordinaries - up 1.51%
  • Shanghai Composite - up 0.96%
  • Nikkei 225 - down 0.25%
  • NZSE 50 - up 0.41%
  • Seoul Composite - down 0.02%

In Europe, markets are higher today:

  • CAC 40 - up 0.39%
  • DAX - up 0.94%
  • FTSE 100 - down 0.12%
  • OSE - up 0.70%

Craft Breweries Continue To Attract Buyers

Over the past few years we have seen a number of deals occur among breweries as everyone in the beer industry tries to replicate the success that Boston Beer Co (NYSE:SAM) and Molson Coors (NYSE:TAP) have had with brewing craft beers and buying craft breweries to drive growth. The consolidation wave has impacted breweries of all sizes as everyone is rushing to build out their craft beer portfolios in the hopes of finding the next Blue Moon.

While everyone in the industry has been waiting for the long rumored bid from Anheuser-Busch InBev (NYSE:BUD) for SABMiller (OTCPK:SBMRY), AB InBev has been busy building up their craft brewing division. The latest deal, announced on Friday, has AB InBev purchasing Seattle-based Elysian Brewing for an undisclosed price. The transaction will bring Washington state's fastest growing brewery into AB InBev's portfolio along with its popular Immortal IPA beer.

Anheuser-Busch will get the company's Seattle brewery along with its four brewpubs and plans to continue to brew all of the company's brands. The company will also expand distribution for the beer which is currently available in 11 states and four foreign markets.

Reinsurers To Merge

PartnerRe Ltd (NYSE:PRE) and Axis Capital (NYSE:AXS) announced that they would merge in a deal worth $11 billion. The merger, which is being called a merger of equals, is the latest acquisition among reinsurers. We have seen M&A activity pick up as profit margins have come under pressure due to new entrants to the industry, including a number of hedge funds. Under the terms of the deal, PartnerRe shareholders will own 51.6% of the combined company and Axis Capital shareholders will own 48.4%.

NFL Strikes New Content Deal

While the announced deal with the National Football League, or NFL, was not the deal Google (NASDAQ:GOOG) (NASDAQ:GOOGL) shareholders were looking for, it should help drive searches and boost revenue on the search side while increasing traffic to Google-owned sites such as YouTube. Under terms of the deal, Google will provide more information for searches related to the NFL, including adding game times and the television channel that games will air on.

The NFL will also create a YouTube channel and allow Google to show some in-game clips that will show up in searches. This should tap into the fantasy football trend by allowing users on mobile to keep up with their players' games and watch certain clips while on the go.

The deal that Google investors wanted, a streaming deal for games on YouTube or Chromecast, could follow but it is unlikely to happen in the next few years unless Google makes a play for Thursday night games.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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