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Shares continued rising on Monday, as investors were encouraged by the fact that Mexico's tariffs are no longer at the table. the Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S & P 500 (SNPINDEX: ^ GSPC) earnings less than 0.5%.
Stock Market Today
| Index | Percentage variation | Point change |
|---|---|---|
| Dow | 0.30% | 78.74 |
| S & P 500 | 0.47% | 13.39 |
Data source: Yahoo! Finance.
As far as individual stocks are concerned, two mergers made the headlines. United Technologies (NYSE: UTX) combines with Raytheon (NYSE: RTN), and salesforce.com (NYSE: CRM) purchased Tableau Software (NYSE: DATA).
Source of the image: Getty Images.
Fusion to create a giant of defense and aerospace
United Technologies and Raytheon announced Sunday the merger of their two companies, leading to a 0.7% rise in shares of Raytheon and a 3.1% fall in those of United Technologies. The shareholders of Raytheon will receive 2 3348 shares of the merged company, named Raytheon Technologies, for each Raytheon share they own.
The agreement will combine Raytheon's missile, air defense and electronic warfare capabilities with United Technologies Pratt and Whitney engines, avionics and aerospace. The new company will generate pro forma 2019 revenues of $ 74 billion and free cash flow of approximately $ 6 billion. Management expects to reduce annual spending by $ 1 billion and bring free cash flow to $ 8 billion by 2021.
United Technologies will have many changes at the same time, as the company is still integrating its acquisition of Rockwell Collins while working to divest its Otis and Carrier businesses. But Raytheon has had a prosperous year, and its complementary strengths in defense could make the business profitable through diversification and scale, despite the complexity of the short-term transition.
Salesforce buys Tableau software
Tableau Software's shares jumped 33.7% after the software giant as a Salesforce service announced that it would buy the company as part of a transaction entirely in shares of value. about $ 15 billion. Salesforce trades 1,103 shares of its stock, which has lost 5.3% today, for every Tableau stock.
Tableau Software specializes in data analysis. It leverages various data sources within an organization, allowing for multiple methods of analysis and visual presentation. Salesforce already has Einstein, sales analysis and artificial intelligence-based marketing, but sees the combination of Einstein and Tableau providing more powerful analysis and visualization capabilities.
The transaction is expected to close around October 1st. While Salesforce plans to increase revenue in fiscal 2020 from $ 350 million to $ 400 million, Tableau is operating at a loss. The acquisition will result in short-term benefits. Salesforce expects the deal to cost between $ 0.37 and $ 0.39 of non-GAAP 2020 EPS, to reach $ 2.51 to $ 2.53.
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