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Altria, Philip Morris confirm merger talks; J.M. Smucker cuts FY'20 guidance

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Altria, Philip Morris confirm merger talks; J.M. Smucker cuts FY'20 guidance

TOP NEWS

* Tobacco giants Altria Group Inc. and Philip Morris International Inc. announced they are in talks regarding a potential all-stock merger of equals. A combined company would be worth more than $200 billion, based on current valuations. The companies said there is no assurance that any agreement or transaction will emerge from the discussions.

* The J. M. Smucker Co. lowered its outlook and now expects to report adjusted EPS for fiscal 2020 in the range of $8.35 to $8.55. For the first quarter ended July 31, J. M. Smucker posted adjusted EPS of $1.58, down 11% from $1.78 in the year-ago period and missing the S&P Global Market Intelligence consensus estimate for normalized EPS of $1.75.

FOOD RETAIL & DISTRIBUTION

* Australian retailer Wesfarmers Ltd. intends to close stores at its discount chain Target, in favor of boosting its online sales, The Sydney Morning Herald reported, citing CEO Rob Scott. The retailer bore an impairment of A$300 million during fiscal 2019 from Target.

* Amazon.com Inc. has reduced prices of products at its grocery retail unit Whole Foods Market Inc. by about 2.5%, following a 3% hike earlier this year, CNBC reported, citing a note published by Morgan Stanley. The move is aimed at expanding the grocer's customer base, the report said.

* British grocer J Sainsbury PLC has teamed up with Tomra Collection Solutions UK & Ireland to launch a deposit return initiative for glass bottles at its Berkshire supermarket in England, The Grocer reported. Sainsbury's will reportedly offer a 5 pence coupon for every qualifying drink container returned.

* South African food distributor Bid Corp. Ltd. said its fiscal 2019 headline EPS grew 12.5% to 14.44 rand. For the year ended June 30, revenue rose 9.8% year over year to 129.3 billion rand.

BEVERAGES

* U.S.-based private equity firm TPG Capital Advisors LLC is in early talks to acquire Indian coffee chain operator Coffee Day Enterprises Ltd., The Economic Times (India) reported, citing two sources. A TPG representative reportedly declined to comment, while Coffee Day did not immediately respond to queries.

* Shares of Chinese distiller Wuliangye Yibin Co. Ltd. were up 1.2% at 133.92 yuan on the Shenzhen Stock Exchange Aug. 28, after Citic Securities raised the price target of the stock by 25% to 156 yuan, South China Morning Post reported, citing a research note by the brokerage firm. The closing price was reportedly the highest since Wuliangye's IPO about two decades ago.

PACKAGED FOODS

* Chocolate-maker Hershey Co. said it agreed to acquire nutrition-bar maker One Brands LLC for $397 million or about $325 million net of tax benefits. The deal is expected to close in the fourth quarter, subject to customary closing conditions.

* Organic-products maker Hain Celestial Group Inc. has completed the sale of its rice brand Tilda to Ebro Foods SA for $342 million. The New York-based company added that the unit is expected to contribute approximately $200 million in net sales and $25 million of adjusted EBITDA, reflecting a multiple of 13.5x, for the fiscal year ending June 30.

* India's National Anti-profiteering Authority has issued notices to consumer companies, including Nestlé SA, Hindustan Unilever Ltd. and The Procter & Gamble Co., seeking to ascertain if they passed benefits of a lowered Goods and Services Tax on their products to consumers, The Economic Times (India) reported. Nestlé reportedly said it deposited gains after a 28% GST on consumer goods was trimmed to 15% in a consumer welfare fund, while a representative for HUL said its "position has consistently been that certain methodology has to be determined before cases of alleged profiteering can be adjudicated."

* Foodservice company Lancaster Colony Corp. reported fiscal fourth-quarter diluted EPS of $1.20, up from $1.18 from the year-ago period. Consolidated net sales grew 5% year over year to $323.7 million from $308.2 million, driven by an 11.7% increase in its foodservice business.

RESTAURANTS

* Bakery café chain Panera Bread has partnered with food delivery companies Grubhub Inc., DoorDash Inc. and Uber Technologies Inc.'s UberEats to expand its delivery service from most of its 1,600 outlets across the U.S. The JAB Holding Co. SARL unit added that its own drivers will continue to deliver customers' orders.

* Gourmet grocery chain Dean & DeLuca Inc.'s parent, Pace Development Corp. PCL, plans to raise $60 million through a sale of debentures in a bid to pare down its debt and pay back patissiers and suppliers in the U.S., the Financial Times reported, citing Pace Development CEO Sorapoj Techakraisri. The executive reportedly added that it had no plans to sell Dean & DeLuca.

* Inspire Brands Inc. has named Jim Taylor as president of its restaurant chain Arby's Restaurant Group Inc. Taylor succeeds Rob Lynch, who was appointed CEO at pizza chain Papa John's International Inc.

* Popeyes Louisiana Kitchen Inc., a unit of Restaurant Brands International Inc., said it has ran out of its chicken sandwich inventory after a Twitter feud broke out between the fast-food chain and Chick-fil-A Inc., CNBC reported. A spokeswoman reportedly confirmed the news saying, "As a result, Popeyes restaurants across the country are expected to sell out of the chicken sandwich by the end of the week."

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The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng fell 0.19% to 25,615.48, and the Nikkei 225 rose 0.11% to 20,479.42.

In Europe, around midday, the FTSE 100 was up 0.23% % to 7,105.45, and the Euronext 100 lost 0.54% to 1,039.34.

On the macro front

The U.S. state street investor confidence index, the U.S. Energy Information Administration petroleum status report and the U.S. survey of business uncertainty are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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