M&A activity on the rise as markets bounce: The EU looks to Chile to secure battery minerals
Markets jumped Monday, clawing back some of the steep losses from the previous week, as traders looked ahead to a highly anticipated Federal Reserve meeting and new inflation data.
Looking ahead to Tuesday, the November consumer price index will be released and traders will be looking for a sign that inflation is slowing. The same day, the Federal Reserve will begin its two-day meeting and is expected to announce another rate hike on Wednesday.
The blue-chip Dow added 1.6 per cent, the S&P 500 jumped 1.4 per cent, and the Nasdaq Composite rose 1.3 per cent.
In company news Microsoft acquired a 4 percent stake in the London Stock Exchange Group. The American software giant acquired the stake from a group led by Thomson Reuters and Blackstone, as part of a $2.8 billion deal that will have the exchange rely on Microsoft’s cloud services. It follows similar business partnerships by other exchanges, including Nasdaq (with Amazon) and CME Group (with Alphabet).
And in a sign that the market may be near a bottom – M&A activity picked up overnight with three deals announced.
Firstly, Amgen has agreed to buy Horizon Therapeutics for $27.8 billion. The all-cash deal for Horizon, which produces treatments for autoimmune diseases, is the biggest health care transaction of the year. In beating out rivals like Johnson & Johnson and Sanofi, Amgen is paying a nearly 20 percent premium to Horizon’s stock price on Friday.
Secondly, Coupa Software Inc (NASDAQ:COUP) stock jumped more than 27 per cent after the maker of business software agreed to an $8 billion take-private offer from Thoma Bravo.
And finally Weber Inc (NYSE:WEBR) stock jumped 23 per cent after the maker of grills and other outdoor equipment agreed to a $3.7 billion take-private offer from BDT Capital.
On the commodity front the European Union has inked a new partnership deal with Chile that will provide greater, easier access to key metals including lithium, copper, and other raw materials for green transition. Presently, the EU imports more than 60 per cent of the lithium used in batteries that power electric vehicles from Chile.
The U.S. Energy Department said on Monday it had finalised a $2.5 billion low-cost loan to a joint venture of General Motors Co and LG Energy Solution to help pay for three new lithium-ion battery cell manufacturing facilities. The loan will help finance construction of new lithium-ion manufacturing facilities in Ohio, Tennessee and Michigan, supporting 6,000 construction jobs and 5,100 operations jobs at the three plants.
Across the sectors, it was all green on the board overnight, with energy, utilities and tech outperforming. Energy, software, semis, transports, media, apparel were the leaders.
Futures
The SPI futures are pointing to a 0.7 per cent gain.
Currency
One Australian dollar at 8:10 AM has weakened compared to the US dollar on Friday buying 67.49 US cents (Mon: 67.95 US cents).
Commodities
Iron ore futures are pointing to a 2.2 per cent fall. Iron ore is 1.9 per cent lower at US$110.25 tonne.
Gold down 1.1 per cent. Silver lost 0.9 per cent. Copper fell 1.8 per cent and oil gained 3.4 per cent.
Figures around the globe
Across the Atlantic, European markets closed lower. Paris fell 0.4 per cent, Frankfurt lost 0.5 per cent and London’s FTSE closed 0.4 per cent lower.
In Asian markets, Tokyo’s Nikkei lost 0.2 per cent, Hong Kong’s Hang Seng dropped 2.2 per cent and China’s Shanghai Composite closed 0.9 per cent lower.
Yesterday, the Australian sharemarket fell 0.5 per cent to close at 7181.
Dividends payable
Amcor PLC (ASX:AMC)
Macquarie Group Ltd (ASX:MQG):
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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