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What to Watch: AstraZeneca merger reports, Lookers troubles and German factory slump - Yahoo Sports

AstraZeneca shares fell on reports of merger talks with US rival Gilead. (Lynne Cameron/PA via Getty)
AstraZeneca shares fell on reports of merger talks with US rival Gilead. (Lynne Cameron/PA via Getty)

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

AstraZeneca slides on merger talk reports

Drug giant AstraZeneca (AZN.L) shares slid 2.3% on Monday morning in London on reports it approached US rival Gilead Sciences over a potential merger.

The news knocked healthcare stocks and the FTSE 100 index lower on the open, though the FTSE swiftly recovered, up 0.4% at around 10.10am in London.

“Investors are unlikely to welcome a large M&A deal at a time when both companies are trying to fight coronavirus as it could prove to be a distraction to management. The timing seems wrong when both companies have such important work to do,” said Russ Mould, investment director at AJ Bell.

Bloomberg reported the potential mega-merger on Sunday, but one well-placed source told Yahoo Finance UK there was little basis to the claims. AstraZeneca and Gilead have been approached for comment.

Car dealership group Lookers (LOOK.L) has warned that its shares are set to be suspended at the end of the month over a likely breach to financial reporting rules.

Lookers said in a statement on Monday that it was likely to miss the final deadline of 30 June to file 2019 annual accounts. As a result, the regulator is likely to suspend trading in its shares from 1 July.

The delay is linked to an independent investigation into fraud. Lookers said in March that it had “identified potentially fraudulent transactions in one of its operating divisions.” Grant Thornton was appointed to investigate.

Chinese telecoms giant Huawei on Monday launched an open letter to the UK, noting that it was “as committed as ever” to working with network operators amid a fresh probe into its role in the country’s 5G networks.

“For nearly 20 years, we’ve supplied the UK’s mobile and broadband companies with 3G and 4G. But some now question our role in helping Britain lead the way in 5G,” the letter says.

READ MORE: UK plans tougher national security laws on foreign takeovers

The message also comes amid reports the UK could threaten British company directors with fines or prison if they fail to follow stricter new national security rules on foreign takeovers.

Academic and research partnerships may also fall under the scope of the new rules, which are set to be introduced in parliament within weeks.

Several leading European indices opened lower on Monday, as new data showed German factories suffered their steepest decline in production on record in April.

Weak import data in China and AstraZeneca’s reported merger approach to Gilead also weighed on stocks, but leading indices clawed back most early losses by mid-morning.

Germany’s DAX (^GDAXI) index of leading companies was trading 0.1% lower and France’s CAC 40 (^FCHI) 0.2% lower at around 10.30am in London, while Britain’s FTSE 100 (^FTSE) was up 0.4%.

"The market continues to view all of these economic reports as rear-view mirror stuff, as optimism over economic re-openings continues to drive sentiment,” said Michael Hewson

Official German data showed manufacturers in Europe’s biggest economy saw output slide 17.9% month-on-month in April, worse than the 16% expected in a poll of economists, according to Reuters. Capital goods manufacturers’ output slid 35.3% and carmakers saw a 70% decline.

It comes after a mixed trading session in Asia overnight. Hong Kong’s Hang Seng index (^HSI) fell 0.1%, China’s Shanghai Composite (000001.SS) rose 0.2% and Japan’s Nikkei 225 index (^N225) rose 1.4%.

US stocks looked set to continue last week’s rally after a surprise jump in US employment data amid surging unemployment in recent months. S&P 500 futures (ES=F) were trading 0.6% higher, Dow Jones futures (YM=F) were up 0.7%, and Nasdaq futures (NQ=F) were up 0.2%.

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What to Watch: AstraZeneca merger reports, Lookers troubles and German factory slump - Yahoo Sports
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