MORNING NEWS CALL

TOP NEWS

• CVS Health to acquire Aetna for $69 billion in year's largest acquisition

U.S. drugstore chain operator CVS Health Corp said on Sunday it had agreed to acquire U.S. health insurer Aetna Inc for $69 billion,

seeking to tackle soaring healthcare spending through lower-cost medical services in pharmacies.

• Facebook opens new London hub, to create 800 UK jobs

Facebook opened its new London office and said it would add another 800 jobs in the capital next year, underlining its commitment to

Britain as the country prepares for Brexit.

• Italy's Prysmian digs deep to buy General Cable in $3 bln deal

Italian cable maker Prysmian has agreed to pay a hefty premium to buy U.S. rival General Cable in a $3 billion deal struck despite

competing bids from Chinese and European groups.

• Exxon eyes Egypt's offshore oil and gas -sources

Exxon Mobil is considering a foray into Egypt offshore oil and gas, seeking to replicate rivals' success in the country and boost its

reserves, officials and industry sources said.

• Broadcom set to unveil challenge to Qualcomm's board -sources

Chipmaker Broadcom Ltd will take its first formal step toward a hostile bid to take over Qualcomm Inc , unveiling nominees whom

Qualcomm shareholders can vote on to replace the U.S. semiconductor company's board of directors, according to people familiar

with the matter.

BEFORE THE BELL

Wall Street was set to witness another record-setting day after the Senate approved a major tax overhaul over the weekend. The

dollar rose against a trade-weighted basket of currencies, while gold slipped. The Commerce Department is scheduled to release

October’s data on factory orders later in the day. European stocks were trading higher, while major stock indexes in Asia recorded

a mixed trading day. Oil prices fell.

STOCKS TO WATCH

Deals Of The Day

• CVS Health Corp (CVS). and Aetna Inc (AET). The drugstore chain operator said on Sunday it had agreed to acquire health insur-

er Aetna for $69 billion, seeking to tackle soaring healthcare spending through lower-cost medical services in pharmacies. This year's

largest corporate acquisition will combine one of the nation's largest pharmacy benefits managers and pharmacy operators with one

of its oldest health insurers, whose national business ranges from employer healthcare to government plans. The deal comes after

Aetna's $37 billion plan to acquire smaller health insurance peer Humana was blocked in January by a U.S. federal judge over anti-

trust concerns.

• General Cable Corp (BGC). Prysmian has agreed to pay a hefty premium to buy the company in a $3 billion deal struck despite

competing bids from Chinese and European groups. Prysmian, which makes cables for the energy and telecoms sectors, said the

acquisition of the Kentucky-based group would strengthen its industry-leading position and increase its exposure to North America.

Letting others grab General Cable could have put Prysmian under pressure in some markets, especially North America, where it gen-

erates 15 percent of its sales.

• Hartford Financial Services Group (HIG). The insurer said it would sell its life and annuity unit to a group of investors in a deal

valued at $2.05 billion, as it looks to focus on its property and casualty businesses. The unit, Talcott Resolution, will be acquired by

an investor group that includes Cornell Capital and Atlas Merchant Capital, it said. The deal consists of $1.44 billion cash, a pre-

closing cash dividend from Talcott, the unit's debt and a 9.7 percent ownership in the new company, it added.

• TTM Technologies Inc (TTMI). The company will buy radar components maker Anaren for about $775 million in cash from private

equity firm Veritas Capital, the company said on Sunday, as it seeks to strengthen in aerospace, defense and networking markets.

The deal is expected to lead to $15 million in pretax, run- rate cost savings and add to its adjusted earnings, it said. The company

expects to finance the deal with a $700 million add-on to its existing Term Loan B and cash on hand.

REUTERS U.S. Edition Monday, December 4, 2017

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MORNING NEWS CALL - U.S. EDITION December 4, 2017

In Other News

• Allergan Plc (AGN). Over 30 technology companies including Alphabet, Amazon.com and Facebook on Friday urged a U.S. patent

court to disregard the drug maker’s contention that its transfer of some of its patents to a Native American tribe shields them from the

court's review. Two trade groups comprised of tech industry leaders argued in a joint brief submitted to the U.S. Patent Trial and Ap-

peal Board that the board has the right to review the validity of patents covering the dry eye medicine Restasis that Allergan trans-

ferred to the Saint Regis Mohawk Tribe in a deal announced in September.

• American Airlines Group (AAL). The airline has reached an agreement with its pilots union over premium pay for some December

flights, both groups said on Friday, after a scheduling snafu gave too many pilots holiday time off and sent the airline scrambling to

correct its mistake. An error in the system that bids for pilots' time off based on seniority was responsible for approving too much time

off to too many pilots in December, American disclosed to employees last week, launching the carrier into a frenzied effort to cover

thousands of then-pilotless scheduled flights.

• Amgen Inc (AMGN). The company can now promote the ability of its potent but expensive cholesterol drug to reduce the risk of

heart attacks and strokes, after U.S. health regulators approved adding those benefits to the medicine's prescribing label, the compa-

ny said on Friday. Amgen has long seen this development as critical to clearing onerous hurdles to patient access and unlocking the

value of the drug, Repatha, which has had anemic sales since its August 2015 approval despite its billion-dollar potential. The injected

biotech drug was approved on the basis of its ability to dramatically lower bad LDL cholesterol.

• Apple Inc (AAPL) The company’s chief executive Tim Cook said developers using its platform in China number 1.8 million and have

earned a total 112 billion yuan, representing roughly a quarter of total global App Store earnings. Cook shared the data on Sunday

during a speech at China's top public cyber policy forum, organised by the Cybersecurity Administration of China, which oversees

internet regulation including censorship.

• Broadcom Ltd (AVGO). The company will take its first formal step toward a hostile bid to take over Qualcomm, unveiling nominees

whom Qualcomm shareholders can vote on to replace the U.S. semiconductor company's board of directors, according to people

familiar with the matter. The move comes after Qualcomm rejected its $103 billion cash-and-stock bid last month. Qualcomm share-

holders who want the company to engage in sale talks will be able to vote on Broadcom's board director slate on March 6.

• Exxon Mobil Corp (XOM). The company is considering a foray into Egypt offshore oil and gas, seeking to replicate rivals' success

in the country and boost its reserves, officials and industry sources said. Officials from the world's largest listed oil producer recently

held talks with Egypt's petroleum ministry to discuss investments in oil and gas production, known as upstream operations, Petroleum

Minister Tarek El Molla told Reuters. The company currently has no upstream operations in Egypt, according to its website. In other

news, the company is merging its refining and marketing divisions to boost profits from its downstream businesses, the first major

restructuring under Chief Executive Darren Woods. The merger of the oil producer's refining and marketing operations will take place

in the first quarter, the company said.

• Facebook Inc (FB). The social media group opened its new London office and said it would add another 800 jobs in the capital next

year, underlining its commitment to Britain as the country prepares for Brexit. The investment, which makes London the biggest engi-

neering hub for Facebook outside the United States, was welcomed by finance minister Philip Hammond, who was given a tour of the

new building located off the main shopping thoroughfare of Oxford Street. In other news, Australia's competition regulator said it

would investigate whether Facebook and Google has disrupted the news media market to the detriment of publishers and consumers.

Like their rivals globally, Australia's traditional media companies have been squeezed by online rivals, as advertising dollars have

followed eyeballs to digital distributors such as Google, Facebook and Netflix. Currently corporate taxes are paid where firms have a

physical presence, which allows digital multinationals to book most of their profits where they have set up headquarters as opposed to

where they make their money. The Australian probe will have power to demand information from businesses and hold hearings. It is

due to make its final report in 18 months.

• Fiat Chrysler Automobiles (FCHA) The company is in talks with South Korea's Hyundai about a technical partnership, but there

are no merger talks between the two, FCA Chief Executive Sergio Marchionne said on Saturday. FCA is often the subject of merger

speculation, especially after its unsuccessful 2015 attempt to tie up with larger U.S. rival GM. The 65-year-old chief executive, whose

mandate ends in April 2019, is working on a new business plan to 2022, which he said should be presented in the second quarter of

next year. As part of that strategy and to simplify its portfolio, FCA is working on separating two of its three components businesses.

• General Electric Co (GE). The company said it was laying off workers at its power division in Schenectady, New York, as it tries to

reduce costs after a steep profit drop at the division. It declined to disclose the number of workers affected. A report by local ABC TV

affiliate News10, citing sources inside GE's Schenectady plant, said about 75 people had been notified that they are being let go. So

far this year, GE has laid off at least 75 other workers in New York state, according to state records.

• Sanofi SA (SNY). The Philippines ordered a probe into the immunisation of more than 730,000 children with a vaccine for dengue

that has been suspended following an announcement by the French drug company that it could worsen the disease in some cases.

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MORNING NEWS CALL - U.S. EDITION December 4, 2017

Amid mounting public concern, the company explained its "new findings" at a news conference in Manila, but it did not say why action

was not taken after a World Health Organization report in mid-2016 that identified the risk it was now flagging.

INSIGHT

CVS-Aetna deal to change how big employers buy health benefits

CVS Health Corp’s proposed purchase of Aetna Inc will change the way many major U.S. corporations buy health coverage for em-

ployees and raise new questions over the cost of those benefits, benefit consultants said.

ANALYSTS' RECOMMENDATION

• Blue Apron Holdings Inc (APRN). Barclays raises target price to $4 from $3 viewing the promotion of Brad Dickerson to CEO as a

positive for the company.

• CVS Health Corp (CVS). Deutsche Bank starts coverage with buy rating saying the potential acquisition of Aetna would completely

change the outlook, competitive landscape and investment paradigm for the shares of the company.

• First Horizon National (FHN). Barclays reinstates coverage with $21 target price with equal weight rating following the company’s

Capital Bank Financial acquisition.

• United Parcel Service Inc (UPS). Deutsche Bank raises price target to $135 from $125 saying multiple expansion opportunities

together with dividend yield implies double-digit return potential for the company.

ECONOMIC EVENTS

0945 ISM-New York Index for Nov: Prior 749.4

0945 ISM New York Business Conditions for Nov: Prior 51.6

1000 Durables ex-defense R mm for Oct: Prior -0.8 pct

1000 Durable goods R mm for Oct: Prior -1.2 pct

1000 Factory orders mm for Oct: Expected -0.4 pct; Prior 1.4 pct

1000 Durables ex-transport R mm for Oct: Prior 0.4 pct

1000 Non Defense cap ex-air R mm for Oct: Prior -0.5 pct

1000 Factory ex-transport mm for Oct: Prior 0.7 pct

COMPANIES REPORTING RESULTS

No major S&P 500 companies are scheduled to report.

CORPORATE EVENTS

1000 First Financial Bancorp (FFBC). Shareholders meeting

1700 Coupa Software Inc (COUP). Q3 earnings conference call

EXDIVIDENDS

Anthem Inc (ANTM). Amount $0.70

Calgon Carbon Corp (CCC). Amount $0.05

CSG Systems International Inc (CSGS). Amount $0.20

Fluor Corp (FLR). Amount $0.21

Glacier Bancorp Inc (GBCI). Amount $0.21

Hancock Holding Co (HBHC). Amount $0.24

ILG Inc (ILG). Amount $0.15

LyondellBasell Industries NV (LYB). Amount $0.90

MainSource Financial Group Inc (MSFG). Amount $0.18

MDC Holdings Inc (MDC). Amount $8.00

NIC Inc (EGOV). Amount $0.08

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MORNING NEWS CALL - U.S. EDITION December 4, 2017

Old Republic International Corp (ORI). Amount $0.19

(All analysts' estimates are according to Thomson Reuters I/B/E/S)

PICTURE OF THE DAY

Brides-to-be participate in the "Running of the Brides" race, in Bangkok, Thailand, December 2. REUTERS/Athit Perawongmetha

(Compiled by Erum Khaled and Nikhil Kumar in Bengaluru) For questions or comments about this report, contact: morning.newscall@thomsonreuters.com To launch a Co-branded Morning News Call from your firm, contact: morning.newscall@thomsonreuters.com For more information about our products: thomsonreuters.com/products_services Or send us a sales enquiry at: thomsonreuters.com/products_services/financial/contactus/

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