While you were sleeping: M&A activity stokes stocks, UK's Darling decries greed

Tuesday 29th September 2009

Shares rallied on Wall Street and in Europe after takeover deals from Xerox Corp. and Abbott Laboratories helped lift sentiment for equity markets.

The Dow Jones Industrial Average rose 1.3% to 9791.86 and the Standard & Poor’s 500 gained 1.7% to 1062.39. The Nasdaq Composite rose 1.9% to 2130.78.

Affiliated Computer Services soared 14% to US$53.75, leading the S&P 500 higher, after Xerox agreed to buy the company for US$6.4 billion cash and stock deal to expand in data management.

Xerox tumbled 15% to US$7.61, the biggest drop on the S&P 500. It will pay 4.935 of its own shares and US$18.60 in cash for each share of ACS, amount to US$63.11 per share, or a 34% premium to its price last week.

The deal will triple Xerox’s revenue from services to US$10 billion, said chief executive Ursula Burns.

Abbott Laboratories rose 2.7% to US$48.60 after saying it would acquire the drugs unit of Solvay for 4.5 billion euros, giving it full control of its Belgian partner's cholesterol treatments.

Johnson & Johnson, the world's largest healthcare company, rose 1.2% to US$61.34 after acquiring 18% of Dutch biotech company Crucell for $444 million.

Cisco Systems climbed 4.6% to US$23.66, leading the Dow higher, after analysts at Barclay lifted the stock to 'overweight'.

In Europe, the Dow Jones Stoxx 600 rose 1.8% to 243.20. Among regional benchmarks, the UK’s FTSE 100 rose 1.6% to 5165.70, Germany’s DAX 30 surged 2.8% to 5736.31 and France’s CAC 40 dropped 2.3% to 3825.

UK Chancellor of the Exchequer Alistair Darling told Labour party members at conference it was “too early” to say if Britain was coming out of recession, and vowed to never again let bankers’ “greed” threaten the wider public.

The yen slipped back from an eight-month high after Finance Minister Hirohisa Fujii qualified earlier comments that suggested he favoured a strong Japanese currency. The greenback climbed against the euro.

The yen weakened 0.2% to 89.73 per dollar while the euro fell 0.6% to 130.97 against Japan’s currency. The euro weakened 0.7% to $1.4593.

Copper fell to a five-week low in New York after stockpiles measured by the London Metal Exchange climbed to the highest level since May, a signal that demand may be waning.

Copper futures for December delivery slipped 0.5% to US$2.727 a pound on the New York Mercantile Exchange.

Crude oil climbed as stocks rebounded and amid concern Middle East tensions will rise after Iran test-fired missiles.

US crude climbed 82 cents at US$66.84 a barrel in New York.

Gold futures for December delivery rose 0.3% to US$994.10 an ounce on the New York Mercantile Exchange.

Businesswire.co.nz

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