Predict the CVS Fallout Buy Aetna: DealBook Briefing



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Critics Corner

• Charley Grant writes: "CVS Health has taken strong measures to recover investors, the potential benefits outweigh the serious risks." (Ear on the street)

• Robert Cyran writes: "With more than $ 20 billion of debt in their books, and another $ 49 billion in line for the agreement, CVS can find resistance. Amazon puts its own financial health at risk." (Breakingviews)

The advisors behind the CVS agreement for Aetna.

Organizing a $ 69 billion transaction is not a small feat, and in this case it required a small army of banks and business laws. Here's who worked for whom:

CVS

• Barclays

• Goldman Sachs

• Centerview Partners (who works for the CVS board)

• Bank of America (which provides financing along with Barclays and Goldman) [19659011] • Shearman & Sterling

• Dechert

• McDermott Will & Emery

Aetna

• Lazard

• Allen & Company

• Evercore (who works for the Aetna directory)

• Davis Polk & Wardwell

• Simpson Thacher & Bartlett (working for the Aetna board)

Some context: According to Thomson Reuters, this is the largest deal in history in the health insurance business. It is also the most important agreement reached this year, as Qualcomm is battling Broadcom's now hostile $ 105 billion purchase offer.

Potential Riches abound: Thomson Reuters estimates that the financial advisors of the Aetna transaction could be divided between $ 120 million and $ 140 million in fees if the deal is completed.

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Senator Mitch McConnell, center, and other Republicans in Capitol Hill on Friday.

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Tom Brenner / The New York Times

The Senate pbaded its tax review law. Now what?

After persuading each Republican senator, but Bob Corker of Tennessee to vote in favor of the legislation, Senate Majority Leader Mitch McConnell and his team must now reconcile their plan with the House version. (Do not forget: Congress must approve a provisional financing measure for the government before Friday night or risk a closure)

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The wave of last-minute changes, which Democrats criticized aloud, led Goldman Sachs economists to slightly raise their estimates of how much economic growth the bill would create.

But there are many problems to be solved, including the tax rate, either to make permanent the individual tax cuts, how many pairs of taxes they must have and when the new corporate tax rate should appear.

An unexpected twist: The Senate bill unexpectedly kept the alternative minimum tax for individuals and corporations. That means that companies could lose access to a tax exemption for research and development that is often used by manufacturers, technology companies and drug manufacturers, according to the WSJ.

He said: "What the Senate did, in its confusion, took me out of the business and then I boasted of the fact that they approved a tax reform," Robert Murray, CEO of the coal mining company Murray Energy, to the WSJ.

How companies plan to spend their money cut out of taxes

"Simplifying the tax code will reduce compliance costs and make it possible for job creators to reinvest more of their own money in their businesses," Mitch McConnell wrote in a WSJ editorial.

But it's not always that simple. Executives at CalPortland, which extracts limestone to make cement, told the NYT that the company probably would not use the extra money to immediately hire new workers.

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A scene from "The Americans", on the FX network, which is a part of 21st Century Fox.

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Patrick Harbron / FX

What motivated Disney to resume talks to buy parts of Fox?

Perhaps the media giant returned to the negotiating table because he feared that Comcast would advance in the talks to buy prime 21st Century Fox badets such as the Fox Movie Studio, cable channels such as FX and shares in the station British Sky and Indian station Star.

The next milestone: The Murdoch family is expected to make their decision by the end of the month, they told Michael on Saturday. If the sale advances, it would be an extraordinary rupture of an empire that the Murdochs spent decades arming.

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The wild card: Would a Comcast offer or a Disney offer for Fox's badets come into conflict with antitrust regulators? Remember that the Department of Justice has cited the effects of the Comcast acquisition for NBCUniversal as a main reason to sue to block the Time Warner deal.

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Investors still have a fever, and the only recipe is more Bitcoin. [19659045] Its value rose to $ 11,800 at one point this morning, helped in part by the Venezuelan government that announced its interest in starting its own digital currency, to be known as the "petro".

The latest signs of the Bitcoin frenzy [19659047] • Nowhere the public frenzy over Bitcoin has been more feverish than in South Korea, prompting the prime minister to express his concern. (NYT)

• Is it time to think about Fedcoin? Central banks are increasingly considering whether they should create digital currencies. (WSJ)

• Wall Street is about to join the fun after C.F.T.C. gave green light to the plans to introduce Bitcoin futures. Futures will be settled in cash, so operators will not get dirty buying things directly. (Barrons)

There's only one problem: No one is using it, the WSJ reports.

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Michael Flynn after his hearing declared Friday in Washington.

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Chip Somodevilla / Getty Images

How Robert Mueller can hit Wall Street hard.

Take a look at how the S. & P. ​​500 and the Dow Jones industrial average moved after Michael Flynn pleaded guilty and revealed that he was cooperating with Mr. Mueller:

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The The so-called Wall Street scare indicator – the Chicago Board Options Exchange Volatility Index, or the VIX, which measures expectations of how wildly the stock market will swing in the next month, jumped almost at the same time. The peak was the biggest one day jump since August.

The two stock indices and the VIX calmed down at the end of the day, perhaps due to the progress of the Senate's fiscal review process. But I hope that any future revelations by Mr. Mueller will hit investors again.

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Wang Huning spoke on Sunday at the opening of the fourth World Internet Conference in Wuzhen, China.

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Aly Song / Reuters

China told CEOs that they want to control their internet.

The man who helped shape the policies of President Xi Jinping said at the World Internet Conference, whose audience this past weekend included Tim Cook of Apple and Sundar Pichai of Google – that China had the right to regulate its own internet.

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But that Communist Party official, Wang Huning, added, "China is willing to develop new rules and systems of Internet governance to serve all parties and counter current imbalances."

Despite continuing concerns about China's close online policing space, Mr. Cook and Chuck Robbins of Cisco praised their commitment to the country.

Additional credit: The WSJ reported on how two of China's leading Internet companies, Alibaba and Tencent, help the country spy on its citizens. And China showed interest in artificial intelligence, according to the NYT.

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Karsten Moran for The New York Times

The latest news on misconduct.

• After firing Matt Lauer, NBC claimed that his executives were unaware of his alleged badual misconduct until they heard a detailed complaint that week. (NYT)

• Visa fired one of its top executives, Jim McCarthy, who managed badociations, saying his behavior had violated company policy. The note did not specify why he was fired. (Recode)

• Vice Media fired three employees for behavior that included verbal and badual harbadment. One was Jason Mojica, the head of the documentary unit. (NYT)

• The harsh style of a Hollywood lawyer, Marty Singer, has hit a sudden cultural shift toward empowering people who speak out against abuse. (LAT)

How to defend against an unwanted takeover bid by 3G Capital.

The key, Paul Polman of Unilever told the Financial Times, was that Kraft Heinz with 3G (where he sits on the board) was making an inauspicious hostile takeover bid.

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De Scheherazade Daneshkhu and Lionel Barber:

"Unknown to us at that time, Warren was not actively involved, and with the trust he probably has in these people, he delegated [the bid] to these people, that would be my better interpretation, "says Mr. Polman.

Mr. Buffett was duly bombed. "Warren was contacted by probably more people than he expected," says Mr. Polman, refusing to say who did it. "As soon as Warren discovered that it was a hostile acquisition, the tone of the conversation changed."

Revolving Door

• Thomas Barkin, a senior McKinsey executive, has been elected to head the Federal Reserve Bank of Richmond, Va., According to a person familiar with the decision. (Bloomberg)

The Speed ​​Read

• The new CEO of Blue Apron may have a good pace to correct some of the company's problems, but perhaps no one can fix what appears to be a business model In crisis. (Bloomberg Gadfly)

• The division of labor of a chief executive can work, but only if the two bosses are modest, so it is difficult to imagine the executive heads of Goldman Sachs. (FT)

• Oracle is bringing a public charter school to its campus, where employees will be able to guide students. (NYT)

• The HNA Group units are stepping up their fundraising in the local bond market, even as borrowing costs skyrocket, adding to the worrying debt burden of the Chinese conglomerate. (Bloomberg)

• According to people close to the situation, Swiss banks have begun to inform the Swiss money laundering office of suspicious account activity among some of their Saudi clients. (FT)

Every day of the week, DealBook reporters in New York and London offer commentary and badysis on the most important business news of the day . Do you want this in your email inbox ? Here is the record.

You can find real-time updates of DealBook coverage all day long at nytimes.com/dealbook.

Siga Andrew Ross Sorkin @ andrewrsorkin Michael J. de la Merced @m_delamerced and Amie Tsang @amietsang on Twitter.

We would love to receive your comments as we experiment with the writing, formatting and design of this report . Send your thoughts and suggestions by email to [email protected]

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