merger

MITEL NETWORKS CORP., $9.11, symbol MNW on Toronto, develops and markets products for business telephone systems. It will buy another industry company—Polycom (symbol PLCM on Nasdaq)—for $1.96 billion U.S. in a friendly takeover. Activist investor Elliott Management Corp. has pushed Mitel to join with Polycom. Elliott, founded by hedge-fund manager Paul Singer in 1977, first acquired stakes in the two companies in October 2015. It now holds 6.6% of Polycom and 9.6% of Mitel. Mitel will pay $3.13 U.S. in cash plus 1.31 Mitel shares for each Polycom share....

PFIZER INC., $32.50, New York symbol PFE, is the world’s largest pharmaceutical company. It has cancelled its merger with Irish drugmaker Allergan plc (New York symbol AGN), which is best known for the anti-wrinkle drug Botox. The deal was meant to cut the combined firm’s corporate tax rate to 18% from 25%. New U.S. tax rules now prevent that savings. Under the terms of the agreement, Pfizer must pay Allergan a $150-million break-up fee. To put that in context, Pfizer earned $3.3 billion, or $0.53 a share, in the three months ended December 31, 2015. The company will now speed up plans to divide its operations into two separate companies: one would focus on patent-protected drugs. The other would own established products without patent protection. Pfizer will make a final decision by the end of 2016....

FORTIS INC., $39.86, Toronto symbol FTS, owns electrical utilities across Canada and in the U.S. and the Caribbean. It also distributes natural gas in British Columbia. The company has completed its latest acquisition in northern B.C.—a 93.8% stake in the Aitken Creek natural gas storage facility. Fortis paid Chevron Corp (New York symbol CVX) $266 million U.S. for the underground complex. To put that in context, Fortis earned $589 million, or $2.11 a share, in 2015. BP Canada owns the remaining 6.2% stake in the B.C. facility. Currently, Fortis leases one-third of Aitken Creek’s capacity. Owning this facility should reduce the company’s costs....

AMERICAN EXPRESS CO., $59.44, New York symbol AXP, rose 2% this week on speculation that WELLS FARGO &CO., $50.05, New York symbol WFC, will soon launch a takeover offer. Berkshire Hathaway (New York symbol BKB.B), the holding company controlled by billionaire investors Warren Buffett, owns 15.6% of American Express and 9.8% of Wells Fargo. An acquisition would enhance Wells Fargo’s credit card business and give it access to Amex’s high-quality clientele. In addition, the bank’s large depositor base provides a lower-cost way of funding credit card loans. Combining the two businesses would also allow Wells Fargo to eliminate overlapping operations....

IMPERIAL OIL LTD., $44.40, Toronto symbol IMO, is selling its 497 company-owned Esso gas stations to independent operators for $2.8 billion. Following the sale, franchisees will operate all of its 1,700 Esso stations across Canada. The buyers include Alimentation Couche-Tard (Toronto symbol ATD.B). It is purchasing 279 stations in Ontario and Quebec. (Alimentation Couche-Tard is a recommendation of Stock Pickers Digest, our newsletter that focuses on aggressive investments.) In addition, 7-Eleven Canada is getting 148 stations in Alberta and British Columbia. Parkland Fuel (Toronto symbol PKI), will buy 17 stations in Saskatchewan and Manitoba....

NEWELL RUBBERMAID INC. $38 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 267.1 million; Market cap: $10.1 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, pens and many other household goods. Its main brands include Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Irwin tools and Graco car seats and strollers. Newell is up 26.7% since we named it our Stock of the Year for 2014 at $30. That’s mainly because of its successful multi-year cost-cutting plan, which included closing plants and merging distribution centres. Since it began the plan in October 2011, these moves have reduced its annual expenses by $360 million. The company is also selling less-important businesses and using the proceeds to buy smaller firms with more-profitable products, such as baby strollers and reusable water bottles....

UNITED TECHNOLOGIES CORP. $94 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.4 million; Market cap: $78.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.utc.com) jumped $5 on news that rival Honeywell International (New York symbol HON) seeks to merge the two firms. Anti-trust regulators are unlikely to approve such a merger: the combined company would dominate several markets, including aerospace products (such as jet engines and landing gear) and building equipment (elevators, thermostats). Meanwhile, United Technologies earned $5.6 billion in 2015. That’s down 5.5% from $5.9 billion in 2014. The company used the $9.1 billion it received from last year’s sale of its Sikorsky helicopter operations to buy back $10.0 billion of its shares. As a result, its per-share earnings fell just 2.5%, to $6.30 from $6.46. If you factor out exchange rates, per-share earnings gained 0.5% to $6.49....

These two former Stocks of the Year continue to lead their markets. But each has moved down lately, mainly because the high U.S. dollar is hurting the contribution of their overseas businesses. However, their underlying sales remain strong, and both are doing a good job controlling their costs. That should spur their long-term earnings growth, and give them more cash for dividends. NEWELL RUBBERMAID INC. $38 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 267.1 million; Market cap: $10.1 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.0%; TSINetwork Rating: Average; www.newellrubbermaid.com) makes plastic storage bins, tools, pens and many other household goods. Its main brands include Sharpie markers, Parker and Paper Mate pens, Calphalon cookware, Irwin tools and Graco car seats and strollers....

UNITED TECHNOLOGIES CORP. $94 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 836.4 million; Market cap: $78.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.utc.com) jumped $5 on news that rival Honeywell International (New York symbol HON) seeks to merge the two firms. Anti-trust regulators are unlikely to approve such a merger: the combined company would dominate several markets, including aerospace products (such as jet engines and landing gear) and building equipment (elevators, thermostats). Meanwhile, United Technologies earned $5.6 billion in 2015. That’s down 5.5% from $5.9 billion in 2014. The company used the $9.1 billion it received from last year’s sale of its Sikorsky helicopter operations to buy back $10.0 billion of its shares. As a result, its per-share earnings fell just 2.5%, to $6.30 from $6.46. If you factor out exchange rates, per-share earnings gained 0.5% to $6.49....

Anti-nuclear sentiment cuts demand for uranium but Fission Uranium attracts new customer, investor—CGN Mining.