Morning Brief: GSK pays $13B for Novartis’s stake in consumer-health care venture

Tuesday, March 27, 2018

What to watch today

On Tuesday, investors will have a slightly busier calendar than Monday, though the holiday-shortened trading week is an overall quiet one in terms of catalysts from the economics or earnings calendar.

Highlights Tuesday morning will include the monthly reading on home prices from S&P/Case-Shiller, which is expected to show home prices rose 0.6% over the prior month in January.

Markets will also be on the lookout for The Conference Board’s latest reading on consumer confidence, which is expected to show another increase in confidence in March to a reading of 131. Consumer and business confidence has been among the strongest economic data points since President Donald Trump’s election win in November 2016.

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Top news

GSK buys out Novartis in $13B consumer healthcare shake-up:  GlaxoSmithKline (GSK) is buying Novartis (NVS) out of their consumer health care joint venture for $13 billion, taking full control of products including Sensodyne toothpaste, Panadol headache tablets, muscle gel Voltaren, and Nicotinell patches. GSK’s biggest move since Emma Walmsley became chief executive last year follows the British drugmaker’s decision last week to quit the race to buy Pfizer’s consumer health care business, endangering an auction the U.S. company hoped would bring in as much as $20 billion. [Reuters]

Brookfield Property to take over mall operator GGP: Commercial real estate company Brookfield Property Partners LP (BPY) said it would acquire the 66% of GGP Inc. (GGP) that it does not already own in a cash-and-stock deal that values GGP, one of the largest owners and operators of U.S. shopping centers, at about $15.3 billion. The deal comes as many malls struggle to retain tenants amid the brick-and-mortar retail sector’s downturn. [Reuters]

Akzo Nobel sells chemicals unit to Carlyle for $12.5B:  Akzo Nobel NV is selling its specialty chemicals unit to U.S. private equity firm Carlyle Group for $12.5 billion in a deal set to transform the Dutch company into a supplier of paints and coatings. A supervisory board meeting ran late into the night as executives discussed different bids and whether to sell or list the division, Chief Executive Officer Thierry Vanlancker said on a call Tuesday after unveiling the decision. Carlyle and Singapore sovereign-wealth partner GIC edged out rivals by agreeing to keep the business intact and giving assurances on workers’ salaries and benefits. [Bloomberg]

Homeowners ditch refinancings as mortgage rates rise: Refinancings make up a smaller portion of the mortgage business than at any time in the past two decades, posing a challenge for lenders who already fear higher interest rates and climbing house prices could eventually depress purchase activity. Last year, 37% of mortgage-origination volume was because of refinancings, according to industry research group Inside Mortgage Finance. That is the smallest proportion since 1995, and the number of refinancings is widely expected to shrink again this year. In 2012, refinancings were 72% of originations. [The Wall Street Journal]

For more of the latest news, go to Yahoo Finance

A lantern sways in a breeze as cherry blossom hangs over the Meguro River in Nakameguro on March 26, 2018 in Tokyo, Japan. The blossom is deeply symbolic, it only lasts for around one week and marks the beginning of spring. (Photo by Carl Court/Getty Images)

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