News about mergers and acquisitions

The ASX 200 gained 39.00 points (0.44%) to 8,845.70 and the All Ordinaries rose 0.39% to 8,975.70, as energy producers and the big banks offset a tech sell-off that followed a slump on Wall Street. The S&P 500 lost nearly 2% last week and the Nasdaq fell 4.5%, while weaker-than-expected jobs data cut the market-implied chance of an RBA rate hike to around 20%. Global X's Joseph Marassa warned that markets may be underpricing a hike given persistently high oil prices. Cleanaway surged 20.24% to $2.97 after announcing a sale to EQT for $9.3bn, and Challenger jumped 19.29% to $11.75 as it considers a takeover bid from Daiichi Life worth $7.8bn. Ampol fell 2.51% despite announcing that refined fuel margins had risen more than 120%.

Gary Black of Future Fund predicts SpaceX could announce within weeks an all-stock acquisition of Tesla at $420 per share, framing the Roadster reveal as a step toward combining Elon Musk's companies. Black estimates the Roadster could add just $0.06 a share to Tesla's 2029 earnings, or 1.1% of the $5.40 consensus adjusted forecast, and sees limited brand benefit, while noting TSLA tends to sell off after its events. Gene Munster of Deepwater Asset Management also sees a merger motive behind the showcase, while Morningstar expects the Roadster could draw buyers to Tesla's lineup but forecasts fewer than 2,000 annual deliveries once production ramps. Barclays considers an all-stock SpaceX acquisition of Tesla the most likely structure, with a possible announcement around Tesla's annual meeting or within six to 12 months, though shareholder approvals and antitrust review remain hurdles. Year-to-date, TSLA is down 21% and SPCX is down 9%.

Accenture is reportedly considering selling its Greater China business, which covers mainland China, Hong Kong and Taiwan, in a deal that could value it at up to $1.5 billion, according to the Financial Times. The potential divestment is part of a push to sharpen strategic focus amid uncertainty over how AI will reshape consulting. The company has hired JPMorgan to explore options after receiving unsolicited interest over the past year, with private equity firms and select strategic buyers expected to evaluate a deal, and it may keep a significant minority stake, though the review may not lead to a transaction. Operations in China have grown more complex due to regulatory hurdles and tighter data security rules, while a sale could free capital for AI acquisitions, client pricing and shareholder returns. Accenture reported global revenue of $74.2 billion for the financial year ended in August, and its shares have risen 85% from their June low.

Starboard Value sees significant upside in Skyworks Solutions (SWKS) if the company delivers on the cost savings and margin targets from its merger with Qorvo, according to Bloomberg, citing people familiar with the matter. The activist investor considers Skyworks undervalued after completing the Qorvo acquisition earlier this month, and sees growth from the companies' complementary product portfolios. The merger targets at least $500 million in annual cost savings within three years, while management forecasts operating margins of 30% to 35% within two to three years. The combined company is valued at about $22 billion, as both firms face slowing growth after Apple shifted toward in-house chips.

Bandhan Financial Services (BFSL) will explore health insurance opportunities once its recent acquisitions of IDFC Mutual Fund, IDFC Asset Management Company and Aegon Life Insurance stabilise, chairman Chandra Sekhar Ghosh told PTI. He said the immediate focus is consolidating existing businesses and did not give a timeline for entering health insurance. Ghosh said a composite licence would make it easier to enter the sector, which current Indian insurance law does not permit. The group is also looking at investment banking and wealth management, where it has no presence.

This article compares Roper Technologies (ROP) and Danaher (DHR) on long-term capital allocation. Over the six months to October 15, ROP returned 4.01% and DHR 18.97%, versus 21.5% for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust. Roper focuses on specialized vertical-market software with recurring revenue, reporting enterprise software gross retention in the mid-90% range and 7% organic recurring revenue growth in the second quarter, while Danaher applies its Danaher Business System across biotechnology, life sciences and diagnostics, completing its Masimo acquisition in June and announcing the StatLab deal. ROP trades at 15.16x trailing and 14.97x forward earnings, compared with 39.41x and 23.81x for DHR, a gap the article calls sizable given Roper's 5% organic revenue growth against Danaher's 3% core revenue growth in the quarter. The article argues both strategies depend on buying the right businesses at the right price.

Archer Aviation (ACHR) shares have fallen from about $8 at the start of the year to about $4, but the author argues the company has made real progress. Archer completed Phase 3 of the FAA's four-phase type certification process, becoming the first eVTOL company to do so, and flew more than 70 test flights in August. Its eVTOL revenue remains zero, but it has announced plans to acquire three Boeing (BA) subsidiaries, Wisk Aero, SkyGrid and Insitu, with Insitu, a profitable military drone maker, generating over $200 million in annual revenue. Archer posted just $5 million in revenue last quarter against expenses of about $284 million, and Boeing would receive a substantial stake that dilutes existing shareholders if the deal closes.

The author argues IonQ, with a $12 billion market cap, could rise tenfold to about $120 billion by 2035 if quantum computing takes off. IonQ's trapped-ion approach holds the world record in two-qubit gate fidelity, and its 256-qubit quantum computer, expected in early 2027, has already drawn several orders. The company also closed its SkyWater acquisition for chip fabrication and bought cybersecurity platform Elisity, though it is currently unprofitable. Reaching $120 billion at 10 times sales would require about $12 billion in annual revenue, versus just over $800 million analysts project for next year. The article cites industry expectations of viable commercial quantum computers around 2029 and McKinsey's projection of up to $72 billion in annual industry revenue by 2035, but notes there is no guarantee IonQ will succeed.