July 29, 2013
The European Union is set to approve a deal allowing US Airways(LCC) and American Airlines(AAMRQ) it merge into the world's largest airlines company. The $11 billion merger was delayed for many months over concerns of a lack of competition if the deal were to be completed. In order to gain approval, the airlines gave up many slots at airports in both Europe and the US. The issue will soon come to a resolution as the EU plans to vote on the issue on Aug. 6. American Airlines filed for a Chapter 11 Bankruptcy Protection in 2011 and is currently listed on the OTC Stock Market, while US Airways trades on the NYSE. Both stocks remained relatively unchanged after the release of this news.
Caterpillar(CAT) authorized a share buyback worth approximately $1 billion today. Its stock shot up over 1% upon the release of the statement. The company will immediately repurchase 11 million shares from French bank Societe Generale. The price of the entire buyback will vary depending on stock performance within the next three month and may cost less than expected as CAT is currently on a 6 month losing streak. Before the financial crash of 2008, the company board approved buying back over $7 billion worth of the company's stock and is currently about 2/3 of the way there.
Hudson's Bay Co. will buy Saks Inc.(SKS) in a $2.4 billion deal that will allow the Canadian company to expand the New York based luxury retailer into Canada. Saks has been struggling for the past few years as people are spending money more conservatively, causing many earnings drops for the company in the past few quarters. Its debt has risen to over $300 million and it only holds about $5 million in cash. Despite all of this, the stock has gained nearly 50% this year, and shot up 4% today.
Apple's(AAPL) Taiwanese supplier, Pegatron, was accused of violating Chinese law by overworking and underpaying its employees. China Labor Watch reported there were many under-aged employees who had to work for over 10 hours a day at the company's factory. Apple stated it would investigate the allegations, while Pegatron denied them. The company is set to produce Apple's low cost iPhone that is rumored to be released later this year. Apple is continuously shifting its production line away from Samsung as a series of lawsuits have interfered with the relationship of the two tech giants. Despite the news, AAPL rose 1.5% during market hours.
Sources:
Reuters
Associated Press
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