Microsoft to Buy Nuance Communications for $19.7 Billion
Topic of the day
Microsoft Corp. has agreed to acquire speech-recognition firm Nuance Communications Inc. for $16 billion, pushing further into health technology and adding to a series of big deals that have widened the range of software tools it offers customers. The two companies said Microsoft agreed to pay $56 per Nuance share in the all-cash deal, a 23% premium over Friday's closing price. The companies put the deal value, including debt, at $19.7 billion. Meanwhile, Microsoft intends to continue its share buyback program. Microsoft shares closed virtually unchanged, while Nuance soared by almost 16 percent. The acquisition is Microsoft's second largest under Chief Executive Satya Nadella after the company spent about $26 billion for professional network LinkedIn Corp. in 2016. Nuance, based in Burlington, Mass., was a pioneer in speech recognition and artificial intelligence technology. Its software formed the basis of Apple Inc.'s Siri voice assistant before the Cupertino, Calif-based company switched to an in-house version.
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Mainly the weakness of the large defensive stocks led the stock market down in Switzerland on Monday. Participants spoke of a consolidation day, while the leading index SMI is moving near its all-time high. Since the low for the year at the end of February, the index has gained about 650 points. In addition, investors were therefore cautious because the reporting season for the first quarter will start soon. The SMI lost 0.5 percent to 11,181 points. Among the 20 SMI stocks, there were 15 price losers and 5 winners. 36.32 (previously: 53.4) million shares were traded. The Adecco share lost 1.5 percent. Experts at JP Morgan (JPM) downgraded the stock to "Neutral" from "Overweight". The shares had little potential after the recent rally, the house suspects. Roche shares were down 0.9 percent, meaning they were unimpressed by positive trial results. Roche reported good Phase 3 results for its compounds casirivimab and imdevimab to reduce symptoms of Covid 19 infections. The other two heavyweights Nestle (-0.5 percent) and Novartis (-0.3 percent) also weighed on the overall market. Meanwhile, the weakest stock in the SMI was Lonza, which fell 2.2 percent. At the top of the SMI were Partners Group (+1.3 percent).
European stocks are in the red as dealers stay on the sidelines ahead of the start of the earnings season and US inflation data later this week. The Stoxx Europe 600 drops 0.5%, the FTSE 100 is down 0.4%, the CAC-40 retreats 0.01% and the DAX is off 0.07%. "European markets have retained more of their poise even as the continent contemplates the extension of lockdowns in nations such as Germany," says Chris Beauchamp at IG. The agreement reached between Suez and Veolia Environnement in France led to a rally in the shares concerned. Suez jumped 7.7 percent to 19.87 euros and Veolia 9.7 percent. The companies had reached a merger agreement after months of opposition from Suez, with Veolia paying 20.50 euros per share. Diasorin rose 9.6 percent after announcing its acquisition of diagnostics company Luminex for $1.8 billion. With this move, the Italians aim to strengthen their position in the field of molecular diagnostics and expand their presence in the USA.
After the renewed record chase at the end of the week, Wall Street hardly made a move on Monday. The signs were on consolidation. The Dow Jones index lost 0.2 percent to 33,745 points. The S&P-500 closed almost unchanged. The Nasdaq composite ended 0.4 percent lower. The 1,635 (1,818) gainers were offset by 1,662 (1,488) losers. Unchanged, 86 (115) stocks exited the trading session. Boeing lost 1.1 percent. Airline United Airlines Holdings expects first-quarter 2021 revenue to drop sharply to $3.2 billion, missing analysts' forecasts. The stock plunged 3.9 percent. Tesla gained 3.7 percent to just under $702 after Canaccord Genuity upgraded the stock to buy and more than doubled its price target to $1,071. Nvidia advanced 5.6 percent after the group raised its revenue forecast. Signet Jewelers raised its revenue outlook. The diamond retailer's shares rose 7.9 percent in response.
After the setback at the beginning of the week, the stock markets in East Asia are mostly on the rise on Tuesday. While Shanghai more or less treads water, in Tokyo the Nikkei 225 index rises by 1.0 percent to 29,844 points. With a plus of about 1 percent, the Hang Seng Index shows up in Hong Kong. There, Alibaba gain another 1.6 percent after the strong gain of the previous day. In Seoul (+1.0%), SK Bioscience improved by 4.2 percent. The company will manufacture their Covid-19 vaccine for Novavax.
On the bond market, yields rose slightly in line with inflation concerns. However, the ten-year yield remained below its recent high for the year, thus remaining at an elevated level. Traders point to the doubts about possible monetary tightening by the Fed.
JPM lowers Adecco to Neutral (Overweight) - Target CHF 70 (65)
Jefferies raises Eni to Buy (Hold) - Target EUR 13.30 (9.10)
Jefferies lowers Telefonica target to EUR 3.05 (3.20)
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