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Top Midday Stories: Mars to Acquire Kellanova for $35.9 Billion; UBS to Sell Credit Suisse's US Mortgage Servicing Business
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Top Midday Stories: Mars to Acquire Kellanova for $35.9 Billion; UBS to Sell Credit Suisse's US Mortgage Servicing Business
Aug 14, 2024 9:09 AM

11:52 AM EDT, 08/14/2024 (MT Newswires) -- All three major US stock indexes were up in late-morning trading Wednesday as investors digested a critical inflation report -- the July consumer price index -- that matched expectations.

In company news, Kellanova ( K ) on Wednesday agreed to be acquired by Mars in an all-cash deal worth $35.9 billion, including assumed net leverage. Mars, which owns brands like M&Ms and Skittles, will pay $83.50 per share to buy Kellanova ( K ), which owns brands like Pringles and Cheez-It, the companies said in a joint statement. The price consideration represents about a 33% premium to Kellanova's ( K ) share price on Aug. 2, the last trading day before media speculation began about a potential deal. The acquisition, which requires approval from regulators and Kellanova's ( K ) shareholders, is expected to close in the first half of 2025. Shares of Kellanova ( K ) were up 7.7% around midday.

UBS (UBS) reported Q2 earnings Wednesday of $0.34 per diluted share, down from $8.51 a year earlier. Second-quarter revenue was $11.90 billion, up from $9.54 billion a year earlier. Analyst estimates were not available. UBS has also agreed to sell Credit Suisse's US Mortgage Servicing business, Chief Financial Officer Todd Tuckner said Wednesday during the company's earnings call, without naming a buyer. The deal is expected to close in Q1 2025 and is expected to reduce annualized costs by about $250 million, Tuckner said. UBS shares were up 4.6%.

Southwest Airlines ( LUV ) said Wednesday that activist investor Elliott Investment Management had "dismissed" its board's efforts to "engage constructively," in response to Elliott's announced plans for a proxy fight. Late Tuesday, Elliott said it plans to nominate 10 independent directors that are key to "implementing the urgent changes needed at Southwest ( LUV )." The airline said Wednesday it will continue to discuss ideas with Elliott to increase shareholder value and that it "remains confident that the airline has the right leadership team in place to evolve the business and to lead Southwest Airlines ( LUV ) forward." Shares of Southwest ( LUV ) were fractionally lower.

BHP Group ( BHP ) is holding a new round of negotiations with union leaders at the Escondida mine in Chile to end a strike at the world's biggest copper operation, Bloomberg reported Wednesday, citing people familiar with the matter. The strike, which has entered its second day, has disrupted operations at the site responsible for roughly 5% of the world's mined copper, according to the report. BHP shares were down 2.3%.

Eli Lilly ( LLY ) sent several cease-and-desist letters to US healthcare providers in recent days urging them to stop selling copycat weight-loss drugs as supplies of its Mounjaro and Zepbound improve, Bloomberg reported Wednesday. The letters were sent to telehealth companies, wellness centers and medical spas, Bloomberg reported, citing a company spokesperson. They were also sent to several brick-and-mortar clinics, Bloomberg reported, citing interviews and records it reviewed. Eli Lilly ( LLY ) shares were up 2.1%.

Blackstone (BX) is closing in on a deal to buy healthcare consulting firm Chartis Group from Audax Group, Bloomberg reported Wednesday, citing people familiar with the matter. The deal, which may be announced as soon as Wednesday, could value Chartis at about $1.4 billion, including debt, Bloomberg reported, citing the people. Blackstone shares were up 1.6%.

Meta Platforms' ( META ) Instagram failed to act on 93% of abusive comments directed at prominent female politicians in the US, including Vice President Kamala Harris, Center for Countering Digital Hate, an advocacy group, said Wednesday. Instagram did not act on 926 of the 1,000 abusive comments that the advocacy group reported using the app's own reporting tools, the Center for Countering Digital Hate said. Meta shares were up 0.6%.

Price: 80.25, Change: +5.75, Percent Change: +7.71

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