Markets rebound | Calamatta Cuschieri

Markets roundup, Walgreens – AmerisourceBergen acquisition and Remington Outdoor Company Inc filing for Chapter 11 bankruptcy

U.S. stocks rose for a second straight session Monday as investors digested the Trump Administration’s revamped infrastructure plan
U.S. stocks rose for a second straight session Monday as investors digested the Trump Administration’s revamped infrastructure plan

U.S. stocks rose for a second straight session Monday as investors digested the Trump Administration’s revamped infrastructure plan and waded back into the market, hunting for bargains amid signs of stability after one of the worst weeks for equity benchmarks in two years. The Dow Jones Industrial Average rose 410.37 points, or 1.7%, to 24,601.27, with 28 of the 30 components trading higher.

European markets also traded higher, helped by the strong rebound in the US on Friday that saw the Dow and S&P both recover from their weekly lows. The U.K.’s FTSE 100 rose 1.2% to finish at 7,177.06 with Germany’s DAX 30 index putting on 1.5% to close at 12,282.77, while France’s CAC 40 gained 1.2% to end at 5,140.06.

Walgreens – AmerisourceBergen acquisition

The largest U.S. drugstore operator Walgreens Boots Alliance Inc has made a takeover approach to drug distributor AmerisourceBergen Corp, the Wall Street Journal reported on Monday, outlining a deal that would accelerate healthcare sector consolidation. Healthcare payers and pharmacies are responding to a shifting landscape, including changes in the U.S. Affordable Care Act, rising drug prices and the threat of competition from online retailers such as Amazon.com Inc.

A new deal by Walgreens would follow the $69 billion acquisition of health insurer Aetna Inc by drugstore rival CVS Health Corp and would also reflect a move toward vertical consolidation, where members of a supply chain combine. AmerisourceBergen shares rose 15.7 percent in after-hours trading and shares of Walgreens, which has around 13,000 drugstores worldwide, mostly in the United States, were unchanged.

Remington bankruptcy

Remington Outdoor Company Inc, one of the largest U.S. makers of firearms, said on Monday it had reached a deal with its creditors to file for Chapter 11 bankruptcy to slash its $950 million debtload following a decline in sales at the armsmaker, in part because of receding fears that guns will become more heavily regulated by the U.S. government, according to credit ratings agencies.

Cerberus Capital Management LP, the private equity firm that controls Remington, will lose ownership of the company as a result of the bankruptcy. The company’s creditors, which include Franklin Templeton Investments and JPMorgan Asset Management, will exchange their debt holdings for equity in the company.

Disclaimer:

This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

More in Business Comment

Get access to the real stories first with the digital edition

Subscribe