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Market Update

J&J to Buy Actelion for $30 B, Fiat Lifted Outlook

Author: Sarla Buch
Last Update: 12:12 PM ET January 26 2017

4:00 PM Frankfurt Actelion agreed to be acquired by Johnson & Johnson for $30 billion. Diageo net and revenues jumped. Ericsson net tumbled on weak sales and demand. Fiat profit nearly doubled and lifted outlook. RBS set aside additional 3.1 billion for U.S. settlement. Unilever net soared 6%.

In London trading, FTSE 100 index rose 9.27 to 7,166.20 and in Frankfurt the DAX index gained 37.47 or 0.3% to 11,844.90.

In Paris, CAC 40 index slid 7.75 to 4,872.48.

Actelion Ltd surged 20.3% to 273.50 Swiss francs after Switzerland-based biopharmaceutical group agreed to be acquired by the U.S.-based Johnson & Johnson Inc for about $30 billion in cash.

Under the terms, the shareholders of Actelion will receive $280 per share in cash that equates to 280.08 Swiss francs per share as of January 25, 2017.

Actelion will spin-off its drug-discovery operations into separate company and initially J&J will hold 16% of the new company with an option to acquire another 16%.

The transaction is expected to close by the end of the second-quarter of 2017.

Diageo Plc jumped 4% to 2,227.50 pence after the U.K.-based spirits and beer maker reported net sales in the first-half ending in December soared 14.5% from a year ago to 6.4 billion.

Net profit in the period jumped 6.7% from a year ago to 1.6 billion compared to the 1.5 billion and diluted earnings per share increased to 60 pence from 55.8 pence.

Telefonaktiebolaget LM Ericsson gained 0.9% to 53.10 Swedish kronor after Sweden-based telecommunications operator said sales in the fourth-quarter plunged 11% from a year ago to 65.2 billion kronor.

Net income in the quarter tumbled 123% from a year ago to 1.6 billion kronor compared to the 7 billion kronor and diluted earnings per share dropped 0.48 kronor from 2.15 kronor.

The telecom equipment maker said decline in sales was mainly due to weak demand in mobile broadband and licensing revenues slumped to 10 billion kronor and operating profit plummeted to 6.3 billion kronor.

Fiat Chrysler Automobiles NV advanced 0.9% to 10.32 after Italy-based automobile company reported revenues in the fourth-quarter ending in December rose 1% from a year ago to 29.7 billion.

Net profit in the year nearly doubled from a year ago to 409 million compared to the 213 million and diluted earnings per share advanced to 0.27 from 0.14.

Profit margins in its U.S. and Canada business increased to 7.4% from 6.4% after profits increased in luxury Maserati brand. Net industrial debt dropped to 4.6 billion.

Fiat forecasted operating profit in the year more than 7 billion from 6 billion a year ago and sales to grow between 115 billion and 120 billion near to target of 2018.

Royal Bank of Scotland Group Plc jumped 3.1% to 234.60 pence after the U.K.-based banking and financial services provider said that the bank set aside additional 3.1 billion or $3.92 billion to settle with U.S. Justice Department for the sale of misleading of residential mortgage-backed securities.

Unilever NV declined 4.3% to 37.67 after the Netherland-based consumer goods maker said revenues in the year ending in December dropped 1.1% from a year ago to 52.7 billion.

Net income in the year soared 5.6% from a year ago to 5.2 billion compared to the 4.9 billion and diluted earnings per share jumped to 1.82 from 1.72.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc