Halting max production plus, iff is merging with duponts biosciences and nutrition unit it is a deal that will create a new consumer giant valued at more than 45 billion. Iff ceo and duponts executive chairman will be joining us to discuss the deal in just a few minutes. And record rally, the iss p and nasdaq new highs lets start with boeing, moving lower in the premarket, the journal is among those reporting that the company is considering suspending or cutting production of the 737 max. In response to the story, boeing issued a statement to cnbc saying it would continue to assess production decisions based on the timing and conditions of a return to service for the max. And as we know, guys, faa last week through cold water on that return happening before year end. Right i think that this is something that some people say it is a foregone conclusion. And that the reason why you didnt see this before was that the way that accounting works, something i think a great cfo would understand and they have a great cfo there, that you had to state that things would be fine until theyre not fine you literally just cannot make a conjecture against your own companys views. This say more realistic view i believe that the cash flow will be enough to be able to sustain a dividend cash flow enough to be able to make it so the company has can work through this. But i also believe that the stock has been too high. That sentence just could scare some people. You believe the cash flow will be enough to sustain the dividends. Having that kind of a conversation about the ability to sustain the dividend, thats scary right there, isnt it . I dont think so. I have to be realistic, this is very important. My point is, even having that as a consideration is enough to scare if i take the dividend off the table, if i literally just say dont worry about the dividend and this dividend gets cut, i really think im being irresponsible. Theyre not being irresponsible. Theyre standing by, dont worry about it do you know what the cash flow reductions could be here . Until we do, it is questionable im saying that once they figure it out, i have faith i also have faith that there are people who believe this thing will never come out of it. Thats completely untrue there is just a tremendous 2 billion companies, these guys will get out of it, i just bit way, remember, southwest air made a deal last week that surprised me in terms of how little they were really owed so thats one of the reasons david, i know that may have come across as being lets say harsh. Not reckless, but harsh. What i feel confident about that is that the cash flow is good enough and i think that we all have to think about, well, wait a second, if it is a total shutdown, does this company not have the cash flow to pay for the dividend i think they do. I understand the way you put it and i did not by any means try to ascribe, hey, those of you who are worried, listen, i feel better. I understand that my point is when you get to this, we talked so often about the fact that the stock price is not really this has been the worst year, call it full 12 months almost. And it was horrible. And yet the stock price we pointed out many times was still up. Thats where maybe it was not properly reflecting the risk that seems to be growing. There you go. I think that the stock is wrong, but the cash flow could be in tact and thats why im not saying the stock goes to 250, i think the stock should be down for the year ive got companies that are really doing extraordinarily well, whose stock are not nearly as strong as boeing. As you can see, were hanging on to 147 for the year the other implication for production scheduling is the impact on the 600 or so suppliers and then the hundreds of smaller subcontractors that feed into boeings chain. I have such straight conviction in ge and larry culp. But larry, hes i hate to make this sound hes into boeing for a lot of money. Honeywell less there are companies United Technologies, yes. But if lets say greg hayes was here, i wish he were, hes the great shooting of all ceos, hell say, listen, this will make us have to change our we may have to cut numbers. Or delay numbers take the numbers to the back half meanwhile, United Technologies is merging with raytheon i think thats a great deal. But, yeah, i think those are two companies that, you know, im not talking about spirit you could trans dime those will be heard. But, yeah. I think we have to revisit the earnings per share for United Technologies and for ge and these are companies that have been great suppliers to boeing it is remarkable that were seeing the overall Market Action that were seeing with boeings drag we know what a huge influence it is of the indices because of the price weight a lot of that has to do with the clarity we have gotten over the past week, jim, fed meeting, ecb, brexit, usmca and phase one. People are excited about europe all of a sudden isnt it amazing any sort of certainty, the man who is going to run the uk is not pro europe we get some certainty. People want certainty. I worked all week on this trad agreement, other than a four hour window in the eagles beat the skins. By the way, that was nice thank you. Very nice. Dallas showed up, which bothered me tremendously i know we have ed green going to be on soon hell be highest over the eagle win. But we have to bring him down because next week we play dallas i think you guys are in for it if they keep up the performance they had against the rams thats not what were here to talk about. Its true i dont want to get side tracked at all the deal may be real the deal may be real because of backyard hog production. 60 of the hogs in china are there are chineseowned farms where hogs have not been killed because it is hard to it is airborne virus, asian flu. A group of frozen hogs just in case, you know, frozen pork, just in case it got to that. That frozen pork runs out, boom. There is going to be a lot of demand for pork. Yes do you know if pork right now, our farms, our big hog farms, are National Security protected. You cant go to a hog farm never let you in this is important. We got them, they dont. Theyre coming tothe table, believe me it is all about pork thats for sure when prices over there are doubled in a year, we know why watch out for beef and chicken inflation for 2020 United States. Were going to hear more about what lighthizer said about the deal over the weekend. As jim mentioned, in a moment, a new consumer giant, iff merging with duponts nutrition and biosciences unit futures look pretty good coming off the record close for the s p and the nasdaq still on track for the best annual gain since 2013 iff a very large deal over the weekend for the flavors and Fragrances Company will merge with duponts nutrition and biosciences business dupont at 26. 2 billion, the combined company will have pro forma 2019 revenue of more than 11 billion. 2. 6 billion in ebitda here with us at post nine, iff chairman and ceo Andreas Fibig and duponts executive chairman ed breen thanks to you both thank you for being with us. Youre coppiming right off the Conference Call you just held. Ed, let me start with you. On the call you said iff is the best partner in every respect, you obviously indicated there was a process you evaluated a number of potential outcomes for this business. Why was this the best one for your shareholders . We made the decision based on strategic fit and culture. This creates the Global Leader across all the ingredients spaces, the broadest portfolio by far and well have double the r d of any other company in the industry so strategically we love this, we can really offer our customers full set solutions that nobody else, any competitor, can do the interesting thing was it was a competitive process, there were three people that wanted to merge with the company and all three of the prices were sitting right on top of each other. So thank heavens we didnt have to scratch our head and say, should we take the other one, because the price was better we got the price we wanted, great strategic fit, and then we thought the cultures of the Companies Really gelled well and thats important when youre integrating two Large Companies together thats a lot of what makes it work. All right around the 18 times current ebitda, i guess in times of valuation metrics youre looking at the deal is not that far in the past and it pained shareholders in part because of some things you found there. What confidence can you give them that youre ready to do another large deal and another very large integration what we would say is that first of all we have another 12 to 13 months until we close the deal and the teams are already planning on integration. It is a very robust plan we have our experience and also the m b team is experienced here i think ever will go very, very well over the next 12 months so theyre ready at day one we took our key lessons out of the fruiteron deal what were the key lessons then everything which is cost related was going extremely well were overdelivering on the cost synergies, procurement or footprint or overhead cost we have to watch the one time and the sales that we bring the teams good together and we make sure that were not losing out on this one. It is very clear that most teams for the next 12 months have to perform on their base and their core business and that we made this very clear. I think it is good that the companies the two teams talked already and were very confident that we will get go into next year with a good tailwind. Andreas, good to see you, good to see you both will you need to do an Equity Offering after the deal is done, or will the Free Cash Flow enable iff to reduce the debt . Yeah. You will have to do an equity offer, without a doubt okay thats important because the stock is down 6. I know youve always been quite candid on mad money and said, looks like we might have to and people should be ready thank you. Thats great and now, ed, im trying to look at the rest of the company to me, there is some green chutes i see, were starting to talk about 5g. Thats been very important to the electronics. What is your next move me personally no, the company i know youre personally were both in the in business. Im not talking about your next move, your move here. Im staying at dupont as executive chair and im really excited about it but, you know, look, were actively going to look at the portfolio still and will continue to manage that and it is the best owner mentality for us in the company as we just demonstrated with this great merger today but we look, we have a great portfolio with the three core divisions we have now. We have a lot of secular growth areas, we really love. You mentioned one of them, 5g. Were big at lightweighting cars, big at electrifying cars as they go towards ev. These are big markets for us as we move forward. So we got great growth prospects. I wouldnt doubt we do some tuck in acquisitions along the way. Were going to have a great profile from a cash position and Balance Sheet position so were really going to be in solid shape here moving forward. Ed mentioned r d. We talk about pro teams and flavors all the time where is r d focused now where will it be focussed . What you see is total solutions. We have a nice play around different categories and r d was one of the reasons why we said this deal makes a lot of sense from a Strategic Point of view. We will be leaders in many of these categories, plantbased proteins, flavors. So we will focus our r d to bring these programs basically to fruition and look how we can combine the categories for total solutions. Let me give you an example. If you look at plantbased burger, very popular now, iff is delivering the natural color, the flavors, and now we have to plantbased proteins that texturizes we can provide the total solution and that could go on and on and on we have more examples here thats something which really differentiates us from any other competitor and as ed just said, what we did with this move is not applicable with any competitor with one move they would need more moves to basically rebuild what we have now. I want to follow up on the cost synergies and revenue synergies. Youre talking about 300 million bucks, but revenue synergies, 400 million. Not often we see revenue synergies exceed cost synergies. Can you explain where that is coming from . The beauty of the deal, more the revenue opportunity Going Forward. Theyre complementary, not overlapping the portfolios the plantbased burger, dupont supplies five ingredients in the bun, the cheese, or the burger iff supplies five different ingredients into that product. So the power of a full solution is really powerful, probably for our big customers and our regional local Food Companies which are growing very rapidly they dont have that solution capability so well be able to supply it to them the revenue synergies are really big on this deal but because the products dont overlap as much, you dont equate as much on the cost side, but still 300 is a nice number it get on a business with this type of multiple on it. And, ed, delivering those revenue synergies will be dependent on the Management Team your shareholder base, why is this the right Management Team for dupont shareholders to believe in, as this business changes hands . First of all, the culture is the same, the focus on r d, the customer solution set, thats where we were driving, thats where theyre driving. So i think this culturely fits m b is bringing a solid season Management Team with a lot of depth here and our team along with all of dupont has been through massive integrations the last four years. So we have put a lot into n b and you never watched anything go wrong it was very smooth our team knows how to do it. Well get the best of our playbook, the best of theirs, we have as andreas said, we have 12 to 13 months to plan this and well have it all laid out and documented about how were going to proceed im highly confident and i certainly know we picked the best partner strategically. Andreas, should i feel more confident because i love that deal initially and you know in your 10k from 226. 19, you wrote due to the nature of the transaction and the characteristics of fruit a rum, we were limited and we may subsequently identify additional obligations includes those assumed in the prior acquisitions you feel much more confident in this case. Did you have enough time to do the Due Diligence . Absolutely. What makes a big difference is that we are talking here to u. S. Company, very clear, it is an easiness of doing the deal and we had multiple interaction with the dupont and m b Management Team the culture is so similar that there is a real nice click between the teams and we will start right from day one and onwards. 3. 7 billion coming in cash, tax leakage, right to you. What will happen with it the beauty of this deal, because it is a reverse morris trust, it is tax efficient to our shareholders, which is great. The 7. 3 billion, remember, we have to delever the company because it is less ebitda and well spend about 5 billion doing that well still have over 2 billion of excess cash quick reflections on macro, got done talking about everything that got done last week regarding trade confidence inflicting quickly as a result it feels like it is i wouldnt say we see it in the end market yet i havent seen anything significant change not getting worse. I dont see significant pickup yet. I think with the stimulus that hit and that was happening about a year ago, ten months ago, nine months ago, get the feeling, thats globally, thats going to kick in and help things out here the little bit of the trade tension dying down it just builds ceo confidence to go out and spend on capital. As i talked to so many of the ceos, ive been around so long doing it, they feel a little confidence coming back here and they start spending again. And, ed, finally, the multiple youre getting for this business, people seem happy with at least judging from the analysts and the call and the questions on the call. Leaves a multiple on your existing business fairly low im looking at a fiveyear chart of dupont, from the beginning of the talk of taking it all apart to where we are now, are you still frustrated or are you frustrated with the performance of the stock yeah. Im not. We hit we demerged with dow, we really hit the industrial kind of softness going into last year remember, we took 4 billion out between dow, corteva and dupont. As the revenue starts lifting up again these things are going to print cash theyre in a way better position and pure plays in our industries i feel very good about it. Just to punctuate your point, the multiple right now, im not looking to trade today, the multiple is eight times ebitda our industry and im picking just the average, trades between 12 and 14 times. So there lies a really neat opportunity. Sounds like he may go out and buy that stock also. Gentlemen, thank you appreciate you joining us with the news this morning. Andreas fibig and ed breen as well on todays big deal or yesterdays big deal. When we come back, cramers mad dash, well count down to the opening bell on this monday morning. Dont go anywhere. Futures look good to start the week well get to several sell side calls as well on chip names, pepsi and more the opening bell in five minutes. Is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. vo than just the business theryou came for. More whether thats getting a taste of where you are, or bringing some of that flavor back home. Thats room for possibility. Lets get to living lets get to a mad dash before we get you ready for the opening bell two minutes from now. We talked to allergan on friday when i was talking about a potential close as soon as february theyre going to get this divestiture done january features well today. We have dr. Mitchell brynn from allergan who is going to ring the opening bell. Hes a botox person. David, the great thing about the merger with abbvie is abbvie has this giganti