Wednesday’s Market Snapshot: Here’s What You Need To Know Right Now

Wall Street’s main stock indexes climbed as the prospect of the Democrats winning control of the Senate as a result of the run-off election in Georgia, boosted investor sentiment for the likelihood of additional fiscal stimulus and more spending to kickstart the economy.

The tech-heavy Nasdaq Composite Index advanced 0.6%. The S&P 500 Index rose 1.2% and the Dow Jones Industrial Average appreciated 1.7%.

In aviation industry news, shares of TAT Technologies exploded 41% after signing a 10-year rental agreement with Honeywell for Auxiliary Power Unit (APU) services for its GTCP331-500 engine, which is installed in all Boeing 777 aircraft around the world. TAT’s subsidiary, TAT-Piedmont, also acquired Honeywell’s GTCP331-500 APU rental bank for about $6.5 million as part of this agreement and will provide maintenance, repair and operations (MRO) services for GTCP331-500 APU engines.

In healthcare M&A news, UnitedHealth Group will buy Change Healthcare and merge it with its information and technology-enabled health services business, Optum. UnitedHealth will pay Change Healthcare $25.75 per share in cash, valuing the deal, which is expected to close in the second half of 2021, at more than $13 billion. As a result of the acquisition, UnitedHealth’s net earnings per share (EPS) is expected to grow by approximately $0.20 and adjusted EPS is set to increase by $0.50 in 2022. Change Healthcare shares popped 31%, while UnitedHealth added less than 1%.

Medical technology company Hologic Inc. was up 4% after announcing the acquisition of privately-held Biotheranostics Inc. in a deal worth $230 million. Hologic said that Biotheranostics provides molecular diagnostic tests for cancer, and therefore, the deal would help the company expand its presence in the fast-growing oncology market. The deal, which is expected to close in February, is likely to be dilutive to the company’s adjusted EPS in FY21 and start to be accretive beyond FY22. 

In private equity deals, The Carlyle Group, together with Hikaru Shimura, President and CEO of Rigaku, has agreed to snap up all outstanding shares of Rigaku, through a holding company, in an 80% – 20% ownership split. Financial details of the transaction have not been disclosed. That said, Reuters reported that the deal is thought to be valued around $1 billion. Rigaku was founded in 1951 and has grown to become Japan’s leading technology company in the field of X-ray analysis, measurement and testing instruments, with a diversified customer base of over 10,000 customers globally. Annual revenue amounts to about 44 billion yen, with around two thirds of this generated outside of Japan. Carlyle shares slipped less than 1%.

Meanwhile, Procter & Gamble has decided to pull out of a deal to buy Billie, a supplier of women’s razors and body care products, after US regulators sought to block the proposed takeover. The decision comes after the US Federal Trade Commission (FTC) on Dec. 8, voted to file a complaint to seek a temporary restraining order and preliminary injunction in federal court to stop P&G’s takeover proposal, which was first announced in January. The companies commented in a joint statement “We were disappointed by the FTC’s decision and maintain there was exciting potential in combining Billie with P&G to better serve more consumers around the world. However, after due consideration, we have mutually agreed that it is in both companies’ best interests not to engage in a prolonged legal challenge, but instead to terminate our agreement and refocus our resources on other business priorities.” PG shares advanced 1.5%.

Shares of Alibaba fell 1.8% amid media reports that the Chinese e-commerce giant is planning to raise as much as $8 billion by selling US dollar-denominated bonds as early as next week. Alibaba seeks to tap at least $5 billion from international debt markets through a multi-tranche offering but could increase its bid depending on demand, Bloomberg and Reuters have learnt. The tenure is likely to be 10 years, while marketing documents could be available as soon as next week, Reuters reported.

Coming now to car sales, Fiat Chrysler Automobiles declined 3.3% as the company said that its fourth-quarter US sales decreased 8% year-over-year. For the full-year, total US sales plunged 17%. The company attributed the US sales drop to a sharp decline in fleet orders, mainly from rental car companies and lower demand during the coronavirus pandemic. Meanwhile, Fiat’s US retail sales grew 1% in 4Q, driven by strong growth among the Jeep Gladiator, Ram, and Alfa Romeo brands. The company’s US operations sold 499,431 vehicles in 4Q and a total of 1,820,636 vehicles in 2020.