NEW YORK, June 30, 2017 /PRNewswire/ --
U.S. stocks dropped sharply on Thursday this week and the Dow
Jones had the biggest one-day drop in more than a month, as a
result of the technology sector resuming its sell-off. The
financial sector emerged to be the true winner this week. The
losses in the tech sector were so formidable that all the sector
components were in the bearish territory. The gains made in the
financial sector should not be overlooked however. Thirty four of
the largest banks in the U.S have successfully passed the Federal
Reserve's stress test, meaning the banks have strong enough levels
of capital to lend money even during a recession. Staples,
Inc. (NASDAQ: SPLS), Koninklijke Philips NV (NYSE: PHG),
Spectranetics Corp. (NASDAQ: SPNC), Walgreens Boots Alliance Inc.
(NASDAQ: WBA), Rite Aid Corporation (NYSE: RAD).
When it comes to mergers and acquisitions, a recent JPMorgan
research showed global M&A activity slowed down so far this
year. According to a report by CNBC, various market watchers have
projected that corporate deals would remain 'robust' this year
despite fresh political and economic challenges, but the chances of
matching the record breaking year of 2015 are small. However, this
week has had several major announcements of important mergers and
acquisitions.
Staples, Inc. (NASDAQ: SPLS) on Wednesday agreed to
sell itself to private equity firm, Sycamore Partners for
$6.9 billion. Under the agreement,
Staples' stockholders will receive $10.25 per share in cash for each share of common
stock they own. Staples shares surged more than 8 percent to
$9.93 per share on
Wednesday and rose another 1.6 percent on Thursday. Over
the past few years, Staples has been declining in sales and gross
profits with stores shrinking in numbers. Sycamore specializes in
retailers and already owns specialty retailer Talbots, web-based
retailer, Hot Topic and clothing company, The Limited.
Dutch health technology company, Koninklijke Philips
NV (NYSE: PHG) on Wednesday announced that it agreed to buy
U.S. cardiovascular device maker Spectranetics Corp.
(NASDAQ: SPNC) for 1.9 billion euros
($2.16 billion) including debt. Under
the term of the agreement, Philips will be paying Spectranetics
shareholders at $38.50 per share,
which represents around 27% premium on Spectranetics' closing share
price on Tuesday. Spectranetics shares jumped as much as
26.23 percent to $38.38 on
Wednesday. Spectranetics experienced significant growth in
recent years. Philips is hoping to expand its health care sector as
seven of Philip's ten biggest financial deals have been in
health. Philips expects Spectranetics to make sales of
$293 million to $306 million this
year, and is expecting growth revenues of double-digit rates in
2018.
Walgreens Boots Alliance Inc. (NASDAQ: WBA), the second
biggest pharmacy store chain in the United States, on
Thursday announced that it had ended its deal to buy
out Rite Aid Corporation (NYSE: RAD), after
failing to win antitrust approval. Instead, Walgreens plans to
purchase 2,186 Rite-Aid stores for $5.18
billion. Rite Aid's shares plunged as much as 26.46 percent
to $2.89 per share after the news,
while Walgreens shares were up 1.66 percent to $78.37 per share. With this new deal,
Walgreens would be operating more than 10,200 stores and expects
about $400 million of cost savings.
In addition, Walgreens will have to pay Rite Aid $325 million for terminating the merger. Under
the original agreement, Walgreens will take over nearly 4,600 Rite
Aid stores and expects around $1
billion of cost savings.
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