Anglo American signaled the end of a roughly $50 billion takeover bid, saying it would not give rival mining giant BHP Group (BHP) time to commit to a deal. Marathon Oil (MRO) shares are soaring after ConocoPhillips (COP) bought the company for $22.5 billion, including debt. Salesforce.com (CRM) is set to report first-quarter revenue and profit growth after the deal closes, with investors focused on the company’s data cloud division’s growth and updates on artificial intelligence (AI). American Airlines (AAL) shares are tumbling in premarket trading after the company cut its second-quarter guidance and announced the departure of key executives. The International Monetary Fund (IMF) raised its growth forecast for China in 2024 and 2025, citing strong first-quarter GDP and Beijing’s stimulus measures. U.S. stock futures are falling. Here’s what investors need to know today.
1. Anglo American signals end of BHP takeover battle
Anglo American said it would not give rival mining giant BHP Group (BHP) time to commit to a takeover, likely ending BHP’s nearly $50 billion bid to buy the mining company. Anglo said BHP’s third and latest bid was “highly complex and unattractively structured.” BHP has sought to break up Anglo and has also considered spinning off its South African platinum and iron ore divisions. BHP’s bid for Anglo highlights the growing importance of copper, which is helping fuel renewable energy projects and the shift to electric vehicles, as well as the larger data centers that run AI. Anglo American shares fell 1.9% in London, while BHP shares on the New York Stock Exchange rose 1.6% in premarket trading.
2. ConocoPhillips acquires Marathon Oil for $22.5 billion, shares soar
Shares of Marathon Oil (MRO) are up about 8% in premarket trading after ConocoPhillips (COP) said it agreed to buy the fellow Houston-based energy company in an all-stock deal worth $22.5 billion. ConocoPhillips said the deal, which includes $5.4 billion in net debt, represents a 14.7% premium to Marathon’s closing price on Tuesday. It’s the latest big deal in the energy sector, with Exxon Mobil (XOM) recently completing a deal to buy Pioneer Natural Resources for about $60 billion, and Hess (HES) shareholders on Tuesday accepted a $53 billion acquisition by energy giant Chevron (CVX). After the deal closes, ConocoPhillips expects to repurchase more than $20 billion over the first three years and more than $7 billion in the first year, assuming recent commodity prices. ConocoPhillips shares are down about 3%.
3. Salesforce falls as investors wait for first-quarter earnings after the close
Salesforce (CRM) is scheduled to report first-quarter results after the close, with investors likely to focus on the growth of the company’s data cloud division and updates on its artificial intelligence (AI) efforts. The customer relationship management (CRM) company is expected to report revenue and net income up from a year ago but down from the previous quarter. Analysts expect diluted earnings per share (EPS) of $1.45, down from 20 cents in the year-ago period. Salesforce shares were down less than 1% in premarket trading.
4. American Airlines plummets after outlook cuts and executive departures
American Airlines shares fell more than 8% in premarket trading after the airline cut its second-quarter earnings outlook and said key executives would be leaving the company. The world’s largest airline by fleet number now sees a 5% to 6% decline in revenue in the current quarter, down from a previous forecast of a 1% to 3% decline. The company also lowered its profit outlook for the quarter, saying it now expects adjusted earnings to be in the range of $1.15 to $1.15 a share, down from its previous forecast of $1.15 to $1.45 a share. Analysts had been expecting adjusted earnings of $1.30 a share. The airline also announced that its chief commercial officer, Vasu Raja, who engineered the move to sell tickets through its own app and website rather than through third-party agents, is stepping down.
5. IMF raises China GDP growth forecast, citing strong first quarter and stimulus measures
The International Monetary Fund (IMF) has raised its growth forecasts for China for 2024 and 2025, citing strong first-quarter GDP and Beijing’s stimulus measures. The fund now sees the world’s second-largest economy’s GDP growing by 5% in 2024 and 4.5% in 2025, up 0.4 percentage points from its previous forecast. She also said risks from a slowdown in the real estate sector are “tipped to the downside.” But IMF First Deputy Managing Director Gita Gopinath projected China’s economy to grow at a slower clip by 3.3% through 2029 due to an aging population and slowing productivity growth, and warned that China’s “use of industrial policy to support priority sectors” could “lead to a misallocation of domestic resources, with implications for trading partners.”
