Sign in Subscribe
Mining industry

Global Equity Markets Surge Amidst Billion-Dollar Mergers

Strategic Insights

— 2 min read

Global equity markets surged on Monday as a cascade of billion-dollar mergers took center stage. The Dow Jones industrial average jumped 64.27 points or 0.62 percent to 10,467.04 in late-morning trading, while the Nasdaq composite rose 26.96 points or 1.29 percent to 2,116.84. The Standard & Poor's 500 had increased 8.25 points or 0.69 percent to 1,206.66. Notably, the big mergers were largely concentrated outside the United States, with Telefonica SA paying $31.39 billion for Britain's O2, Barrick Gold paying $9.2 billion for Placer Dome, and Novartis paying $5.1 billion for Chiron.

Key Takeaways:

  • Telefonica SA agreed to pay $31.39 billion for Britain's O2 PLC cell phone operator, a 22-percent premium to O2's closing share price Friday.
  • The deal, expected to close in January, is not expected to face difficult regulatory resistance from the European Union, but may attract other bidders.
  • Barrick Gold Corp. will pay $9.2 billion in cash and stock for gold mining company Placer Dome Inc., with about 87 percent of the purchase price in stock and the rest in cash.
  • Goldcorp Inc. will acquire Placer Dome's Canadian exploration and reclamation properties, as well as its 40 percent interest in the Pueblo Viejo development project in the Dominican Republic, for $1.35 billion.
  • Novartis AG will pay $5.1 billion to buy drug maker Chiron Corp., gaining sole ownership of Chiron's cancer and blood testing business.
  • The 10-year Treasury note gained 5/21 or $1.56 per $1,000 invested to yield 4.549 percent.
  • The dollar rose, hitting 116.18 yen from 115.67, while the euro fell to $1.2008 from $1.2067.
  • The FTSE 100 in London and the Nikkei 225 in Tokyo also closed higher, gaining 1.94 percent and 1.95 percent respectively.

Statistics:

  • Dow Jones industrial average: 10,467.04 (+64.27, 0.62% change)
  • Nasdaq composite: 2,116.84 (+26.96, 1.29% change)
  • Standard & Poor's 500: 1,206.66 (+8.25, 0.69% change)
  • Telefonica SA purchase price for O2: $31.39 billion
  • Barrick Gold Corp. purchase price for Placer Dome: $9.2 billion
  • Novartis AG purchase price for Chiron: $5.1 billion
  • 10-year Treasury note yield: 4.549%
  • Dollar exchange rate with yen: 116.18
  • Euro exchange rate with dollar: $1.2008

Sources:

  • UPI, "M&A action lifts U.S. stocks" (no date given)
  • UPI, "Telefonica paying $31.39 billion for O2" (Oct. 31)
  • UPI, "M&A action among Canadian gold companies" (Oct. 31)
  • UPI, "Novartis paying $5.1 billion for Chiron" (Oct. 31)
  • Times of London, "Telefonica agrees to buy O2 in all-cash deal" (Oct. 31)

Read more