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Altria buys 35% stake in Juul; AB InBev, Tilray to explore cannabis drinks

TOP NEWS

* U.S. tobacco giant Altria Group Inc. said it signed and closed a $12.8 billion cash deal to acquire a 35% stake in Juul Labs Inc. According to the statement, the deal values the company at $38 billion, and JUUL will remain fully independent. Altria also announced a cost-reduction program to cut approximately $500 million to $600 million in annualized costs by 2019-end, aided by reducing third-party spending and reducing workforce.

* Belgium-based brewer Anheuser-Busch Inbev SA/NV is partnering with cannabis company Tilray Inc. to research cannabis-based beverages, the companies said. Each company will invest up to $50 million in the venture, which will study nonalcoholic beverages containing two cannabinoids: tetrahydrocannabinol and cannabidiol. AB InBev's Canada-based unit, Labatt Breweries, will be involved in the partnership, while Tilray's participation will be through its Canadian adult-use cannabis division High Park Co.

FOOD RETAIL & DISTRIBUTION

* British grocers fear a major blow from J Sainsbury PLC and Asda Stores Ltd. potential merger, concerned that it might be more of a risk to trade than a no-deal Brexit, The Times (London) reported, citing a survey conducted by the Food and Drink Federation. The survey, conducted among over 100 suppliers, found that 55% were negative about the deal while 39% were very negative. Only 2% recorded a positive reaction and 5% did not know what impact it would have on business. The findings are part of the federation's submission to the Competition and Markets Authority, which is investigating whether the merger should go ahead.

BEVERAGES

* Beverage giant Coca-Cola Co.'s Indian arm is set to roll out a range of fruit juice-based fizzy drinks under its Kinley brand, The Times of India reported. The new range, named Kinley Fruitizz, will be a low-cost product. A Coca-Cola spokesperson confirmed the development, the report said.

* Coca-Cola Bottlers Japan Holdings Inc. is set to hike prices of its bottled beverages by up to 10%, including Coca-Cola, marking its first price hike in 27 years, Nikkei Asian Review reported. The bottler plans to initially raise recommended retail prices of products sold in large plastic bottles by 6% to 10%, driven by increased transportation costs amid shrinking workforce. Under the plan, the company will raise prices of fruit-flavored and tea drinks sold in 1.5-liter and 2-liter plastic bottles starting with April 2019 shipments, the report added.

* Budweiser-brewer Anheuser-Busch Inbev signed a 15-year power purchase agreement with London-based Lightsource BP Renewable Energy Investments Ltd, which will provide 100% renewable electricity to the company's two main U.K. breweries in South Wales and Lancashire. Lightsource BP will fund, develop and operate 100 megawatts of solar power installations under the deal.

PACKAGED FOODS

* General Mills Inc. reported a drop in sales for the fiscal 2019 second quarter, weighed down by the impact of its $8.33 billion acquisition of pets food producer Blue Buffalo in April, even as top-line results beat analyst's expectations. Sales within the company's pet segment fell 7% on a pro forma basis, including results from the Blue Buffalo brand. Adjusted diluted EPS came in at 85 cents for the quarter ended Nov. 25, beating the S&P Global Market Intelligence mean consensus estimate for normalized EPS of 81 cents. Adjusted net earnings attributed to General Mills of $512.4 million rose 7.9%, beating the mean consensus estimate of $489.8 million.

* Unilever PLC said it will acquire The Vegetarian Butcher BV for an undisclosed sum, as part of its plans to expand its plant-based portfolio. The Vegetarian Butcher offers meat substitute products including burgers, hot dogs and ready meals. It employs about 90 people, who are expected to remain with the business after the deal. The deal is expected to be completed by 2018-end.

* Nestlé SA signed a 10-year licensing deal with Australia's Vesco Foods Pty. Ltd. under which Vesco will manufacture and market its Lean Cuisine healthy food brand in Australia and New Zealand, consumer goods website Inside FMCG reported. Lean Cuisine is Nestlé's range of frozen prepared meals that are low in fat and free from artificial additives. Vesco will begin Lean Cuisine production at its Brisbane and Perth facilities "in the coming months," the report said.

* Brazil's chief federal prosecutor said it had search warrants for eight people involved in the case of a former minister who allegedly took bribes from meatpacker JBS SA's parent company J&F Investimentos SA, Reuters reported. The prosecutor, without naming the targets of the search warrants, alleged J&F of bribing the then Science and Technology Minister Gilberto Kassab with monthly deposits of 350,000 Brazilian reais between 2010 and 2016. Kassab's representative said in a statement, "All his acts followed the law and were carried out in the public interest," while J&F declined to comment.

* FrieslandCampina Belgium NV boosted its US operations as it acquired U.S.-based specialty cheese importer and distributor Best Cheese Corp. for an undisclosed sum. Best Cheese will be fully integrated into the FrieslandCampina Consumer Dairy U.S. business and former shareholders of Best Cheese will no longer be involved with the business.

* Brazilian chicken exporters formalized a proposal to set minimum export prices for sales to China in a bid to lift anti-dumping deposits imposed on the country's products, Reuters reported, citing Claudia Marques, a partner at MPA Trade Law, representing ABPA meat industry group. Marques said China's Ministry of Commerce will now formally have to say whether it accepts the terms proposed at an undefined date, known in trade circles as the "price undertaking" mechanism. Under the proposal, exporters commit to sell to China at prices not lower than what was agreed, the report said.

RESTAURANTS

* French catering and foodservice company Elior Group SA expects to raise over €1 billion from the sale of its concessions catering business Areas and is working with banks including Morgan Stanley, Reuters reported, citing several sources. Elior, which is likely to enter exclusive talks with a potential buyer soon, drew interest from industrial players like France's Lagardere alongside Italy's Autogrill SpA and Cremonini, another source added.

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The day ahead

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

In Asia, Hang Seng fell 0.94% to 25,623.53, while the Nikkei 225 was down 2.84% to 20,392.58.

In Europe, around midday, the FTSE 100 fell 0.26% to 6,748.23, and the Euronext 100 was down 1.14% to 917.00.

On the macro front

The jobless claims report, the Philadelphia Fed Business Outlook survey, the leading indicators report, the Energy Information Administration natural gas report, the fed balance sheet and the money supply report 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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