Category: Stock Market News

Enbridge Inc. and Spectra Energy Corp. announced Tuesday that they have agreed to merge to create the largest energy infrastructure company in North America. The two companies will combine in a stock-for-stock merger transaction, which would value Spectra Energy’s common stock at $28 billion, and give the overall company a pro-forma enterprise value of about $127 billion. The transaction was approved by both boards and is expected to close in the first quarter of 2017 at which time the company will be called Enbridge Inc. Spectra Energy shareholders will receive 0.984 shares of the merged company for every share of Spectra they own and the existing Spectra shares are valued $40.33 a share. Shares of Spectra Energy were up 6% in pre-market trade.

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Danaher Corp. said Monday it has agreed to acquire diagnostics company Cepheid for $53 a share in cash or about $4 billion. Danaher said it expects to finance the deal with cash and debt. Cepheid had revenue of $539 million in 2015 and expects to generate $618 to $635 million in revenue in 2016. The deal is expected to close by year-end. Danaher is expecting the deal to be moderately dilutive to GAAP EPS, but to add about 5 cents per share to adjusted EPS in the first full year after acquisition. Cepheid shares closed at $34.42 on Friday, and were trading up about 52% in premarket trade Monday.

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Intel Corp. announced late Monday that it is buying Movidius, an eight-year-old chipmaker that creates the computer vision processors used in drones and virtual reality devices, as well as other products. Financial details for the deal, which the firms expect to close later this year, were not released. Movidius has secured deals with Lenovo, DJI and Google. Its latest chip, the Myriad 2, can make sense of multiple video streams at once. Intel said it hopes to pair Movidius’ technology with its own RealSense depth-sensing camera technology.

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Sports Direct International PLC shares jumped 5.7% on Tuesday after the retailer apologized for the poor working conditions at one of its warehouses and promised to improve. A report commissioned by the retailer itself and prepared by RPC found “serious shortcomings” at its Shirebrook, Derbyshire warehouse, which “the Board deeply regrets and apologises for.” Sports Direct said it would ditch its “six strikes” policy that meant workers could get suspended for breaking rules six times, including taking too many toilet breaks. The company will also offer permanent employment to some of its staff on zero hours contracts, which don’t guarantee work shifts. Sports Direct said it has requested a further review of its working practices, with the aim of identifying the next steps in improving its employment conditions.

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The European Central Bank’s quantitative easing program passed a milestone last week, topping 1 trillion euros in purchases after 18 months of aggressive bond buying. ECB figures for the week ended Sept. 2 show the central bank has now bought €1,001 billion in sovereign debt. The bank is using a so-called “capital key” to determine how many bonds from each countries it should buy, with the amount proportional to a member state’s gross domestic product. As of the end of August, the ECB has bought €238 billion in German Bunds, €189 billion in French government paper and €164 billion in Italian bonds since March 2015. The central bank announced its QE program in January 2015 in an effort to boost growth and inflation across the eurozone. Inflation in the bloc is currently at 0.2%, well below the ECB’s target of close to 2%, which has prompted heavy debate among economists as to whether the purchases are working as intended. The bank’s policy makers are scheduled to hold their regular meeting on Thursday, and expectations are mixed: Some analysts expect the ECB to extend the run of the QE program beyond March 2017, while others expect the bank to wait until later in the year before acting, in order to have a better understanding of the Brexit fallout.

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Saudi Arabia and Russia on Monday agreed to cooperate on a bid to stabilize the struggling energy market, according to media reports. In a statement at the Group of 20 meeting in China, the world’s two largest oil producers said they will set up a working group to monitor the oil market and come up with recommendations to promote stability, according to the report. The countries recognize the need to contain the supply glut that has caused oil prices to fall from above $100 two years ago to below $30 earlier this year, according to Interfax. Saudi energy minister Khalid A. Al-Falih and his Russian counterpart Alexander Novak will meet in Algeria in October and in Vienna in November to discuss how to cooperate under the new agreement. Oil prices trimmed earlier sharp gains as the two oil producers failed to meet market expectations they would agree on an output cap. Crude oil was up 2.9% at $45.72 a barrel, while Brent rose 3.5% to $48.49 a barrel.

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Tesla Motors Inc. Chief Executive Elon Musk asked employees to step up productivity and profitability before the end of the quarter this week in an email obtained by Bloomberg News. Tesla said in a recent filing that it expects to seek more funding from Wall Street after a stock offering earlier this year and despite loads of debt for both the electric car maker and a current acquisition target, SolarCity Corp., and Musk said he wanted to take a strong quarter to Wall Street. “The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production,” Musk said in the Monday email, which Tesla confirmed as authentic to Bloomberg. Musk described the quarter as “critical,” and said Tesla is “on the razor’s edge of achieving a good Q3, but it requires building and delivering every car we possibly can, while simultaneously trimming any cost that isn’t critical, at least for the next 4.5 weeks.” Tesla stock gained 0.3% in after-hours trading after falling more than 10% for the week.

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Samsung Electronics Co. Ltd. officially announced Friday afternoon that it will launch a U.S. exchange program for its latest smartphone, the Galaxy Note 7, offering trade-ins for a new Note or other Samsung devices, as well as a $25 gift card for some customers who have already purchased a Note. The Korean tech giant launched a global recall of the devices after allegations of batteries exploding while charging, a problem that has also afflicted a range of other gadgets. Samsung said that owners of the new Galaxy Note could trade it in for a new Note or for one of the Galaxy smartphones Samsung released earlier in the year, the Galaxy S7 or S7 Edge, with the difference in price refunded to the user. Samsung also said that customers of select wireless carriers would receive a $25 gift card. Samsung asked customers to return the device to the retail outlet from whence it was purchased or to call 1-800-SAMSUNG to initiate the transaction.

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U.S. stocks closed higher on Friday, boosted after a weaker-than-expected payroll report was seen as diminishing the likelihood of an interest rate increase by the Federal Reserve. The S&P 500 [S: SPX] rose 9.1 points, or 0.4%, to 2,179.96, with the energy sector among the strongest of the day. The Dow Jones Industrial Average [S: DJIA] rose 72.2 points, or 0.4%, to 18,491.52, with Apple Inc. [S: AAPL] and Boeing Co. [S: BA] the day’s biggest outperformers. The Nasdaq Composite Index [S: COMP] rose 22.69 points, or 0.4%, to 5,249.9. For the week, both the Dow and the S&P rose 0.5% while the Nasdaq ended with a gain of 0.6%.

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Amazon.com Inc. said Friday that it is making toys including Hasbro Inc.’s “Star Wars” Rebel U-Wing Fighter Set available for pre-order, part of a monthlong event leading up to the release of new toys tied to the Walt Disney Co. film “Rogue One: A Star Wars Story.” Between Sept. 2 and Sept. 30, Amazon will also feature promotions on “Star Wars” products and exclusive deals and merchandise tied to the “Star Wars” franchise. Amazon shares are up 0.3% in Friday trading, and up 51.4% for the last 12 months. The S&P 500 Index is up 11.9% for the past year.

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