Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average trimmed its gains to close modestly higher Monday after Donald Trump said he would delay increasing tariffs on China-made goods.
- General Electric Co. (GE) - Get General Electric Company Report will sell the biopharma portion of its life sciences business to Danaher Corp. (DHR) - Get Danaher Corporation Report for $21.4 billion in cash. GE shares jumped 6.4%.
- Swiss pharmaceutical giant Roche Holdings AG (RHHBY) reached a deal to buy biotech Spark Therapeutics Inc. (ONCE) - Get Spark Therapeutics, Inc. Report for about $4.8 billion, or $114.50 a share. Spark Therapeutics shares soared 120.09% to $113.48.
Wall Street Overview
Stocks rose on Monday, Feb. 25, after President Trump said he would delay increasing tariffs on China-made goods, set to kick in on March 1, following "substantial progress" over two weeks of trade talks between Washington and Beijing.
Trump conveyed the message in a series of tweets on Sunday that also suggested he could hold a near-term meeting with Chinese President Xi Jinping at his Mar-a-Lago resort in Florida, perhaps as soon as next month, in order to conclude the months-long negotiations.
"I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues," Trump said in a tweet. He added: "Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!"
The Dow Jones Industrial Average closed up 60 points, or 0.23%, to 26,092, the S&P 500 gained 0.12%, and the Nasdaq rose 0.36%.
General Electric Co. (GE) - Get General Electric Company Report will sell the biopharma portion of its life sciences business to Danaher Corp. (DHR) - Get Danaher Corporation Report , the company that GE CEO Larry Culp ran for around 13 years, for $21.4 billion in cash.
GE said the sale won't include its pharmaceutical diagnostics business but expects to use the net proceeds of around $20 billion to reduce its overall debt load. Danaher said the business will operate as as stand-alone company in its own life sciences segment, and will add around 45 cents to 50 cents in adjusted earnings in the first full year after the deal closes.
"GE Biopharma is renowned for providing best-in-class bioprocessing technologies and solutions," said Danaher CEO Tom Joyce. "This acquisition will bring a talented and passionate team as well as a highly innovative, industry-leading product suite to our Life Sciences portfolio, providing an excellent complement to our current biologics workflow solutions."
GE shares rose 6.4%. Danaher was up 8.53%.
The price is nearly $3 billion more than Spark Therapeutics' market cap of $1.95 billion as of the close of trading Friday. The stock closed Friday at $51.56. It rose 120.09% to close at $113.48 on Monday.
The all-cash deal is for $114.50 a share, or a total equity value of about $4.8 billion on a fully diluted basis, inclusive of about $500 million of projected net cash expected at close, Spark Therapeutics said.
The boards of both companies unanimously approved the sale, which is expected to close in the second quarter.
Barrick Gold Corp. (GOLD) - Get Barrick Gold Corporation (BC) Report made a formal all-stock takeover offer for rival Newmont Mining Corp. (NEM) - Get Newmont Corporation Report that would create the world's biggest gold company.
Barrick said the deal would be based on an exchange ratio of 2.5694 Barrick shares for each Newmont share and would "unlock more than $7 billion net present value (pre-tax) of real synergies." Under terms of the offer, which was made public Monday, Barrick would own 55.9% of the combined company against 44.1% for Newmont investors. The deal values Newmont at around $18 billion.
"The combination of Barrick and Newmont will create what is clearly the world's best gold company, with the largest portfolio of Tier One gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering value," said Barrick CEO Mark Bristow.
Newmont shares fell 1.04%, while Barrick shares fell 3.3%.
Kraft Heinz Co. (KHC) - Get The Kraft Heinz Company Report has tapped investment bank Credit Suisse to review options for its Maxwell House coffee business, which could include a potential sale, people familiar with the matter told CNBC.
Based off valuations for other sales of consumer brands, a sale could fetch a price of at least $3 billion, the people told CNBC.
The sale of the coffee business will be one of a string of divestitures for Kraft Heinz as the food giant looks to reshape the empire put together by its private-equity backer 3G Capital, CNBC reported.
Shares of Kraft Heinz declined 27.5% on Friday after the company posted a fourth-quarter loss of nearly $13 billion, said it had received a subpoena from the Securities and Exchange Commission, and planned to slash its dividend. The stock was down 2.06% on Monday.
Warren Buffett said Monday that his company, Berkshire Hathaway Inc. (BRK.A) - Get Berkshire Hathaway Inc. Report , has "absolutely no intention" of selling its stake in Kraft Heinz, even as he admitted he likely overpaid for his near 27% holding in the packaged food company and wasn't surprised by the $15 billion writedown on two of its key brand assets.
Speaking with CNBC on Monday, Buffett said he wasn't going to "pull the plug" on Berkshire Hathaway's holding in the company, shares of which fell to a record low Friday after it posted much weaker-than-expected fourth-quarter earnings and warned of a "step backwards" for the business in 2019.
- Warren Buffett: 'Absolutely No Intention' of Selling Stake in Kraft Heinz
- Jim Cramer: Kraft Heinz Is Setting Off My Baloney Meter