Wall Street Breakfast: AB InBev, SABMiller Seal MegaBrew Deal

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AB InBev has completed an agreement to buy SABMiller (OTCPK:SBMRY) for £69.78B ($105.5B), a tie-up that creates a brewing behemoth and one of the largest mergers in corporate history. Under terms of the deal, SABMiller will sell a 58% stake in its MillerCoors joint venture to partner Molson Coors (NYSE:TAP) for $12B. A combined AB Inbev-SABMiller would have controlled close to 70% of the U.S. beer market, so the sale of the U.S. division was seen as a concession to competition authorities. BUD -0.5%premarket; SABMiller +2.8% in London.

Economy

Asian stock markets remained wobbly on Wednesday after a mixed batch of Chinese data showed growth in the world's second largest economy still in low gear. October industrial production growth cooled to 5.6% last month, while urban fixed asset investment for the January-October period increased 10.2%, its slowest annual pace in over two decades. Retail sales helped offset the weakness, accelerating by 11% from a year earlier. Separately, the FSB's new global capital rules may require China's four biggest banks to raise up to $400B, an onerous task that could pressure lending at a time when Beijing needs to boost economic growth.

During the G20 summit this coming week, the U.S. will likely urge leaders to use monetary, fiscal and structural tools at their disposal to offset a shortfall in global demand and will push countries with extra fiscal space to spend. Treasury Secretary Jack Lew will join President Obama and others at the summit on Nov. 15-16. The U.S. is also expected to support the inclusion of the yuan in the IMF's benchmark currency basket, provided China meets existing criteria of the international lender.

Portugal's center-right government has been toppled just two weeks into its second term following the rejection of its legislative program by a leftist alliance at odds with eurozone austerity. The move could lead to a new government led by the Socialist Party, setting the country on an uncertain economic course. Eurozone leaders had previously pointed to Portugal and Ireland as examples of how austerity paid off as their economies improved, but some now fear the country could go down the same road as Greece.

Britain's relationship with the EU is working but the Bank of England will do whatever is needed to adapt should Britons vote to leave the bloc in a referendum, BoE Governor Mark Carney said on Wednesday. Britain is due to vote to stay in the EU before the end of 2017. The announcement came as U.K. unemployment fell to the lowest level in more than seven years, dropping to 5.3% in the third quarter. Also on tap: ECB chief Mario Draghi will deliver a speech today at the Bank of England's Open Forum.

Stocks

Alibaba broke its own record for sales on China's Singles Day, the world's largest Internet shopping event, generating more than $9.3B in gross merchandise volume by midday Wednesday. Sales now look on track to hit $13B. More records: In the first eight minutes of this year's sale, the company posted more than $1B in sales, topping last year's 17 minutes to hit the billion-dollar mark. Alibaba (NYSE:BABA) first latched onto Singles Day, symbolized by the four lonely 1s of 11/11, five years ago.

Online orders for Apple's iPad Pro are set to begin today. The 12.9 inch-screen tablet, aimed in large part at business users and creative pros, will start at $799 but costs more than $1,000 if buyers want a keyboard and stylus included. Yesterday, Apple (NASDAQ:AAPL) shares fell 3.1% - keeping the tech sector in the red - after a Credit Suisse report said it had cut its orders for iPhone 6 components by as much as 10%.

Volkswagen has dampened hopes for quick results from a probe into its emissions tests and said developing a fix for the affected cars rather than finding the root cause of the rigging is its top priority. "I understand the desire for speed, but what matters to us instead is to work thoroughly," VW (OTCQX:VLKAY) sales chief Juergen Stackmann said at a panel discussion late Tuesday. As many as 40 employees involved in activities related to the manipulations are under investigation.

U.S. prosecutors have unveiled criminal charges against three men accused of running a sprawling computer hacking scheme that included the largest ever theft of 100M customers' data from twelve financial institutions and publishers. The cyberfraud, which began in 2007, also involved inflated stock prices, online casinos, payment processing for criminals and an illegal bitcoin exchange. Among the hack victims: JPMorgan (NYSE:JPM), TD Ameritrade (NYSE:AMTD), E*Trade (NASDAQ:ETFC), Scotttrade and News Corp. (NWS, NWSA).

So what is it? A skill game? Gambling? NY Attorney General Eric Schneiderman has defined daily fantasy sports as illegal gambling under state law, saying that "winning or losing depends on numerous elements of chance to a material degree." The ruling means that DraftKings and FanDuel, the biggest daily fantasy sites, will have to stop accepting bets from New Yorkers. If public officials in other states agree, it could be the end of the daily fantasy sports industry in the U.S.

Dialog Semiconductor is sticking with its plan to buy U.S. peer Atmel (NASDAQ:ATML), rebuffing activist hedge fund Elliott, which is seeking to rally co-shareholders to vote against the acquisition. Looking to expand its industrial product portfolio, Dialog (OTC:DLGNF) agreed to acquire Atmel for about $4.6B in September, but Elliott believes the deal will harm the company's value.

After swinging to a third-quarter loss on its struggling Russian and Chinese businesses, Carlsberg (OTCPK:CABGY) said it will slash 2,000 jobs (15% of its workforce) and book $1.4B in impairment and restructuring costs. The world's fourth biggest brewer reported a net loss of 4.5B kronor, compared with a profit of 2.1B kronor in the same period a year ago. The company is also monitoring the combination of AB InBev (NYSE:BUD) and SABMiller (OTCPK:SBMRY), but has no current plans to make mergers and acquisitions itself. Carlsberg +6.7% in Copenhagen.

The U.S. Department of Transportation has denied an appeal by railroads challenging new "crude-by-rail" regulations on trains hauling hazardous flammable materials. The rules issued in May include the phasing in of tougher tank car standards over several years and require new expensive braking systems on trains hauling more than 70 cars of crude oil by 2021. Related tickers: CSX, NSC, UNP, KSU, BRK.A, BRK.B, CNI, CP, TRN, GBX, WAB, ARII,RAIL

General Electric's stock did something yesterday that it hasn't done in seven years: it closed above $30/share. In the years since June 10, 2008,GE's stock has struggled despite CEO Jeff Immelt's efforts to reassure investors that the company was changing. The mood seems to have shifted over the past year as the company offloaded its finance business, welcomed activist investor Nelson Peltz into its ranks and completed its biggest acquisition of all-time with the purchase of Alstom's (OTCPK:ALSMY) energy assets.

Tuesday's Key Earnings

Arena Pharmaceuticals (NASDAQ:ARNA) +5.3% AH on a Q3 beat.
Beazer Homes (NYSE:BZH) +5.6% as DTA allowance reversed.
Canadian Solar (NASDAQ:CSIQ) -3.4% on a broad sell-off in solar stocks.
D.R. Horton (NYSE:DHI) +8.2% after topping estimates.
Westport Innovations (NASDAQ:WPRT) -12.2% AH after missing expectations.

Today's Markets 

In Asia, Japan +0.1% to 19691. Hong Kong -0.2% to 22352. China +0.3% to 3650. India -1.5% to 25743.
In Europe, at midday, London +0.4%. Paris +0.7%. Frankfurt +1%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude -1.1% to $43.74. Gold flat at $1088.60.
Ten-year Treasury Yield flat at 2.33%

Today's Economic Calendar

7:00 MBA Mortgage Applications

Companies reporting earnings today

Source: http://seekingalpha.com/article/3675056-wall-street-breakfast-ab-inbev-sabmiller-seal-megabrew-deal