merger

AURICO GOLD $4.15 (Toronto symbol AUQ; TSINetwork Rating: Speculative) (604-681-2802; www.auricogold.com; Shares outstanding: 250.0 million; Market cap: $1.0 billion; Dividend yield: 2.8%) has agreed to merge with Alamos Gold (symbol AGI on Toronto). AuRico owns the Young- Davidson mine in northern Ontario, which holds as much as 5.6 million ounces of gold. The mine started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open pit to underground mining, which will sharply increase its costs. Alamos owns the Mulatos mine in Mexico, but its main asset is its $358.0 million cash holding. The combined entity, called Alamos Gold, will use that cash to fund Young-Davidson, and boost the company’s gold output from 400,000 ounces this year to 700,000 in 2018....

GENERAL ELECTRIC CO., $28.51, New York symbol GE, rose 11% on Friday on news that it is selling most of its GE Capital subsidiary, which mainly provides loans to GE’s clients. The company has scaled back GE Capital over the past few years, after the division suffered big losses in the 2008/09 financial crisis. Under the plan, GE will sell most of GE Capital’s office buildings and real estate loans to a group of investors for $26.5 billion. That’s equal to 10% of GE’s $259.0-billion market cap (or the value of all of its outstanding shares)....

Getting back to industrial basics, General Electric shrinks GE Capital and finalizes its big deal with French nuclear power giant Alstrom.

AURICO GOLD $4.15 (Toronto symbol AUQ; TSINetwork Rating: Speculative)(604-681-2802; www.auricogold.com; Shares outstanding: 250.0 million; Market cap: $1.0 billion; Dividend yield: 2.8%) has agreed to merge with Alamos Gold (symbol AGI on Toronto).

AuRico owns the Young- Davidson mine in northern Ontario, which holds as much as 5.6 million ounces of gold. The mine started up in 2013 and will reach full production in 2016. But meanwhile, it’s moving from open pit to underground mining, which will sharply increase its costs.

Alamos owns the Mulatos mine in Mexico, but its main asset is its $358.0 million cash holding. The combined entity, called Alamos Gold, will use that cash to fund Young-Davidson, and boost the company’s gold output from 400,000 ounces this year to 700,000 in 2018.

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KRAFT FOODS GROUP INC. $83 (Nasdaq symbol KRFT; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 588.0 million; Market cap: $48.8 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.kraftfoodsgroup.com) is merging with H.J. Heinz. The new firm— The Kraft Heinz Company— will be the 5th largest food company in the world, with annual revenue of $28 billion. Under the terms of the deal, Kraft shareholders will receive one share of the new firm for each share they currently hold. They will also receive a special dividend of $16.50 a share....

KRAFT FOODS GROUP INC. $83 (Nasdaq symbol KRFT; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 588.0 million; Market cap: $48.8 billion; Price-to-sales ratio: 2.0; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.kraftfoodsgroup.com) is merging with H.J. Heinz.

The new firm— The Kraft Heinz Company— will be the 5th largest food company in the world, with annual revenue of $28 billion.

Under the terms of the deal, Kraft shareholders will receive one share of the new firm for each share they currently hold. They will also receive a special dividend of $16.50 a share.

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AGRIUM INC., $144.38, Toronto symbol AGU, hit a new all-time high of $145.07 this week after reporting better-than-expected quarterly earnings. It also raised its outlook for 2015. In the three months ended December 31, 2014, Agrium’s earnings gained 4.1%, to $0.77 a share from $0.74 a year earlier (all amounts expect share price in U.S. dollars). These results exclude unusual items, mainly losses on contracts the company uses to lock in foreign exchange rates and commodity prices. On that basis, the latest earnings easily beat the consensus estimate of $0.60 a share. Revenue fell 5.7%, to $2.7 billion from $2.9 billion. That’s because Agrium had to cut production at its Vanscoy potash mine in Saskatchewan to complete a major expansion. An unplanned outage at its Redwater, Alberta, plant also slowed nitrogen-fertilizer output. Sales at its retail stores, which sell fertilizer and seeds to farmers, declined 2.1%....

RESTAURANT BRANDS INTERNATIONAL INC. $43 (New York symbol QSR; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 467.1 million; Market cap: $20.1 billion; Price-to-sales ratio: 14.2; Dividend yield: 0.8%.; TSINetwork Rating: Average; www.rbi.com) took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) takeover of Tim Hortons Inc. (old symbol THI). Restaurant Brands now has 14,372 Burger King restaurants and 4,671 Tim Hortons outlets in over 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19, a year earlier. Without merger-related costs and other unusual items, gross earnings before depreciation, interest and taxes gained 23.1%....

LOBLAW COMPANIES LTD. $48 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 412.7 million; Market cap: $19.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with roughly 1,200 stores. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills.

The company recently acquired the 1,250-store Shoppers Drug Mart chain. Loblaw paid $12.3 billion, consisting of $6.6 billion in cash and $5.7 billion in Loblaw common shares. Shoppers shareholders now own 29% of the combined company.

Loblaw’s parent company, George Weston Ltd. (Toronto symbol WN), agreed to help it pay for this acquisition by purchasing $500 million worth of new shares. Due to the extra shares outstanding, Weston now owns 46% of Loblaw, down from 63% prior to the purchase.

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RESTAURANT BRANDS INTERNATIONAL INC., $52.21, Toronto symbol QSR, took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI). Restaurant Brands is the world’s third-largest fast-food chain, after McDonald’s and Yum Brands, with 14,372 Burger King outlets and 4,671 Tim Hortons locations in 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price in U.S. dollars). If you exclude merger costs and other unusual items, gross earnings before depreciation, interest and taxes rose 23.1%....