The daily business briefing: June 22, 2022
Twitter board urges shareholders to approve Musk takeover, the Supreme Court rejects appeal of $25 million Roundup judgment, and more
Twitter board urges shareholders to approve Musk takeover
Twitter's board has unanimously voted to recommend that its shareholders approve Tesla CEO Elon Musk's $44 billion takeover offer, according to a Tuesday regulatory filing. The board said in the filing with the Securities and Exchange Commission that it also unanimously recommended that shareholders approve "the compensation that will or may become payable by Twitter to its named executive officers in connection with the merger." Musk said in an interview at the Qatar Economic Forum that shareholder approval was one of three "unresolved matters" delaying the deal. The other two, he said, are pulling together debt financing and resolving his dispute with Twitter over the percentage of its accounts that are fake.
Supreme Court rejects appeal of $25 million Roundup judgment
The Supreme Court on Tuesday declined to hear an appeal of the multimillion-dollar verdict against the maker of Roundup weedkiller for not warning about its cancer risks. The decision lets stand a $25 million judgment in favor of Edwin Hardeman of California, who said he got cancer from years of using Roundup to control poison oak and weeds. Bayer, which inherited responsibility for Roundup when it acquired Monsanto in 2018, had appealed the verdict in hopes of blocking thousands of Roundup lawsuits similar to Hardeman's. The Environmental Protection Agency says Roundup's active ingredient, glyphosate, isn't likely to cause cancer in humans, but California adopted stricter labeling requirements after an international research group in 2015 classified glyphosate as "probably carcinogenic."
Kellogg announces split into 3 companies
Kellogg announced Tuesday that it plans to split into three companies to boost both its larger, faster-growing snacks business and its cereal brands. Its plant-based foods operations, such as MorningStar Farms, would be the third and smallest company. Kellogg's snacks, including international products, noodles, and frozen breakfasts, account for 80 percent of its sales. The company said separating those products, which include Pop-Tarts and Pringles, from its cereals, which include Frosted Flakes and Rice Krispies, would make the businesses more flexible and focused. "These businesses all have significant stand-alone potential," said Kellogg's Chief Executive Steve Cahillane, who will lead the $11.4 billion snacking business after the split is completed late next year.
Stock futures fall as volatility continues
U.S. stock futures dropped sharply early Wednesday following Tuesday's rally, as concerns about a possible recession continue to weigh on Wall Street. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 1.2 percent and 1.4 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were down 1.7 percent. The three main indexes made big gains on Tuesday, rebounding from last week's losses. The Dow and the S&P 500 jumped 2.2 percent and 2.5 percent, respectively, in their best day in six weeks. The tech-heavy Nasdaq gained 2.5 percent. UBS said that while recession risks are rising, any downturn would likely be shallow "given the strength of consumer and bank balance sheets."
Biden expected to call for gas-tax holiday
President Biden plans to call for suspending federal gasoline and diesel taxes for three months to help Americans deal with high fuel prices, The Wall Street Journal reported Wednesday, citing senior administration officials and confirming a report by Punchbowl News. Biden is expected to make the announcement when he addresses gas prices at 2 p.m. ET. Congress would have to approve a holiday from the 18.4-cents-a-gallon federal gasoline tax and 24.4-cents-a-gallon diesel tax through September, and some lawmakers from both parties have expressed opposition. Some Democrats fear oil companies would keep most of the savings, so motorists would get little relief. Gas prices rose last year, then jumped to record highs after Russia invaded Ukraine, disrupting oil supply.