Diamonds and Dogs

6/10/19

Merger Monday. Raytheon (RTN) is up 2% after agreeing to be bought out by United Technologies (UTX) for $120 billion merger in an all stock deal. The combined companies will have roughly $74 billion in sales. Raytheon, which makes the Tomahawk and Patriot missile systems for the U.S. military, will own 43% of the combined group, which will be led by United Technologies CEO Grey Hayes. Both stocks were higher before President Trump came on CNBC saying he was concerned the tie-up could reduce competition in the defense sector and give the Pentagon reduced leverage in negotiating future procurement contracts.

Salesforce.com (CRM) taking a hit, down 5%, after agreeing to buy Tableau Software (DATA) for $15.3 billion. The takeover will mark Salesforce's largest deal to date.  Co-Chief Executive Officers Marc Benioff and Keith Block have been chasing new markets to reach an annual revenue goal of as much as $28 billion by fiscal 2023. At least one analyst likes the deal calling it, "absolutely transformative." But at least today, investors are selling.