Reuters Insider - Inside the News: M&A Fever Grips Australia

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13/06/2016 11:02

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        A wave of merger activity boosts investor         
                     sentiment, with deals on the table from Rio Tinto, 
                     Lend Lease and others.                            
 
 
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Transcript (May be auto-generated)

                 Inside The News at one o'clock: It's M&A mania Down Under with three big deals 
hitting the market today, Sydney-side; and resources giant Rio Tinto has made a 
fresh offer to buy coal miner Riversdale for just over $3.25 billion. That's 
according to the Australian newspaper. While Atlas Iron announces an $800 
million takeover of rival Giralia, and property developer Lend Lease says it'll 
buy German construction firm Bilfenger Berger for $1 billion. Why all the deals 
all at once, here's Sydney M&A Correspondent Mike Smith. Well, it does seem like
a lot of Australian companies are having a bit of a Christmas spending spree. 
Look, a lot of these deals have been in the pipeline for some time. But the 
Australian market virtually shuts down over at January with a lot of people on 
holidays. So if these companies need to raise money to fund these deals, they 
really need to get it away before Christmas in order to get these deals across 
the line in the next couple of months. It's also being driven by healthy balance
sheets. 

There's a lot of confidence out there and of course the resource sector here is 
still very hot. On other news, China throwing a lifeline to Europe, pledging 
concrete action to help the region. That immediately gives a boost to the Euro. 
But Vice Premier Wang Qishan says he is keen to see more results from the 
measures to reduce debt taken so far. The Chinese Commerce Minister ratcheting 
up the pressure on Europe as well saying he hopes the Union will soon recognize 
China as a market economy. The Australian Dollar bounces back even as the RBA 
describes current policy as "mildly restrictive." It says downside risks to the 
global economy have been boosted by Europe's debt crisis but it has been offset 
by strong outlooks from both China and India. On UK side, consumer confidence 
continuing to hover near its lowest level since July. The GfK reading for 
December coming in slightly better than economists' estimates, but analysts are 
saying shopping ahead of the planned VAT hike next month was really the only 
factor here which kept the number from hitting this year's lows. Well, here in 
Asia, the Bank of Japan holds off on further easing as it scrutinized how 
escalating debt woes in Europe and a US-driven rise in bond yields will affect 
the fragile domestic Japanese economy. In other corporate news, Chinese 
conglomerate Xinmao says it will go ahead with a $1.3 billion bid for Dutch 
cable maker Draka. That's prompting speculation Italy's Prysmian will raise its 
rival bid for the firm. But Draka shares remain below Xinmao's EUR20.5-per-share
offer. Snow and freezing temperature continuing to ground flights and disrupt 
road and rail links across Northern Europe, leaving travelers stranded and 
schools closed. Only one out of two runways at London's Heathrow will operate 
this Tuesday. Now, click back in to Reuters Insider later today. We'll speak 
with Beijing Economic Hu Xingdou on Chinese inflation situation. I'm Jon Gordon.
This is Reuters