Feb. 14 - Summary of business headlines: Deal-making hits high with Berkshire Hathaway/3G taking Heinz private in mega food purchase, American Airlines and US Airways merging in an $11 billion deal, and Anheuser-Busch InBev making overtures to the DOJ in hopes of clinch its $20 billion all-out purchase of Grupo Modelo. Conway G. Gittens reports.
A day of high-profile corporate hook-ups keeping traders engaged... but investors seem reluctant to make a long-term commitment, indicated by small moves for the overall stock market. The biggest deal of the day: Heinz. Warren Buffett's Berkshire Hathaway and private equity firm 3G - buying the leading ketchup company for $28 billion in mostly cash. A 19 percent premium over the record high price the day before, sent shares of Heinz quickly to a fresh life-time peak. Speculation the food sector could see a wave of consolidation sent shares of General Mills, Campbell Soup and Kellogg higher. As one potential merger wave begins, one ends. American Airlines and US Airways are merging to create the world's largest air carrier. Jeffrey Kauffman of Sterne Agee says the $11 billion hook-up makes sense for both parties. SOUNDBITE: JEFFREY KAUFFMAN, ANALYST, STERNE AGEE (ENGLISH) SAYING: "American without this deal has had a hard time competing against a much larger Delta and United. US Air without this deal is really kind of relegated to a niche standing in the industry which they've carved out for themselves nicely. But this really is a one plus one equals three combination for these two carriers." But the deal means there's really no more combinations to be had, leading to down arrows across the sector, including US Air. More deal news. Anheuser-Busch InBev says its will sell U.S. rights to Grupo Modelo products to Constellation Brands, but maintain international rights - all in a bid to convince the Justice Department not to derail a $20 billion bid for the rest of Grupo Modelo it does not already own. All the parties involved think this will clear the regulatory hurdle and so all three stocks rallied on the offer. No such party for European markets, where new data show the euro zone slumping further into recession.