Stock markets across the world have surged after a flurry of merger and acquisition (M&A) activity over the weekend.
Three mega deals worth tens of billions were announced, helping the FTSE 100 to consolidate its positive move above 6,000 with European and Asian shares also rising.
TIKTOK DEAL BOOSTS SENTIMENT
The biggest deal in terms of market sentiment was Oracle’s reported partnership with Chinese social media platform TikTok, which has helped ease concerns over the on-off trade war between the US and China.
According to the Financial Times, TikTok owner ByteDance has reached a preliminary ‘technical partnership’ agreement with Oracle for TikTok’s US operations which doesn’t include a full sale of the short video app.
It comes after a protracted bidding war between Oracle and Microsoft, which revealed its bid for TikTok’s operations in the US, Canada, Australia and New Zealand has been rejected.
The reports of a deal caused a big rise in Asian markets, as well as US futures, on Monday as it boosted hopes that there could be a resolution to tensions between the US and China.
SOFTBANK MAKES ‘TIDY PROFIT’
Japanese investor Softbank announced it would sell UK microchip designer ARM to US-based Nvidia for $40 billion, just four years after snapping up the business in the wake of the Brexit vote for around $10 billion less.
AJ Bell investment director Russ Mould pointed out that while on the surface that is a ‘very tidy profit’, it’s likely Softbank would have invested a lot in the business during its ownership.
ARM was the biggest publicly-traded technology stock before being bought by Softbank in 2016. Its chip architecture is used in most smartphones around the world.
The deal will open up more options for Softbank as it focuses more on publicly-traded tech companies.
GILEAD PAYS BIG AS IT OUTBIDS RIVALS
In yet another blockbuster M&A move, American pharma giant Gilead Sciences will acquire cancer drug developer Immunomedics for $21 billion, in a move that will strengthen its cancer portfolio by gaining access to a promising drug.
The deal provides Gilead access to Immunomedics’ breast cancer treatment drug, Trodelvy, which was granted an accelerated regulatory approval in April.
Gilead will pay more than double Immunomedics’ market value, offering $88 per share in cash for the company as it reportedly tried to outbid rivals for the business. This represents a premium of around 108% over the last closing price of $42.25 on Friday.
G4S SOARS ON POSSIBLE BID
The frenzied dealmaking continued on Monday morning as shares in security services company G4S (GFS) suddenly surged over 23% to 180p just after 11am as Canadian peer GardaWorld announced a possible offer for the business.
GardaWorld has proposed an all-cash offer of 190p per share for G4S, which it said represents a premium of 86% to the G4S share price prior to GardaWorld's first approach in June.
GardaWorld is the largest privately-owned security services company in the world.
