Immediately. A lot of moving parts here. It is completely overhauling and remaking this company. It just depends on which businesses fit in with the ones you have and how you want to position yourself for the future. Were talking to lickliter, arent we . We are. From eli lilly. Novartis is up 1. 25 in reaction to the news, Glaxo Smithkline is up by more than 4. 5 and eli lilly up by 0. 5 . A couple programming notes for glaxos ceo, sir andrew witty will be here. At 7 15 eastern time as joe just mentioned, we have an exclusive interview with eli lillys chief John Lechleiter. When there were rumors about more consolidation, theyre all looking for ways to go into a somewhat uncertain future by a promising future as well. Animal health, thats a big business. I was thinking about it upstairs. We love our pets. Well pay anything for them. Whats the worst thats going to happen . Im sorry. Its heart breaking but you lose a patient, its not quite the same thing. Not quite the same thing. My uncle was a veterinarian. Thank you. Was he also in the army, a vet, too. He was a veterinarian. This gekko has a weak jaw. He has a weak jaw, what do i do . He said replacement therapy, 5. We had a russian tortoise. It was supposed to live to 150. When we went and got the news from the doctor that the prognosis was not promising, i just remember thinking we could do this, could do that, it could run up into hundreds and almost a thousand dollars to save this tortoise. My daughter is like we have to do it. Its like hes out in the backyard now. Im afraid one of our dogs will dig him up. His name was rudolph. Poor rudolph. You do your best. Its a lucrative business. Eli lilly also is a big psychotropic a lot of Mental Health drugs. A lot of these dogs are Walking Around depressed. They do prescribe prozac for dogs . For certain maladies, obsessive compulsive scratching. I can see that. I think eli lilly saw synergies there. I want to talk about this. Ackman this is the other part of it. I keep this company in business. More drug related news this morning, William Ackman teaming up with valeant to make a run at valeant or allergan . The botox . Dont they make contact lens stuff . Thats the product they are most known for. I wear contact lenses. Im sorry. Im old im sorry. This awkward moment was brought to you by no, thats what i was getting at. Obviously, allergan shares jumping on the news, valeant said it expected to offer a mix of stock and 15 in cash for the botox maker which makes contact lens stuff. Barclays and rbc are lined up to finance a cash portion. Sources told cnbc that the total value would be slightly more than 45 billion. Theres a step that got out of here. Ackman looks at a company, says, you know, id like to get this thing sold and then he even identifies a buyer. This is a new and novel. Hes already controversial. And Pershing Square has about 4 billion worth of allergan. Its the biggest investment ever, a 9. 7 stake. I didnt know if all those shares were just shares of Pershing Square. This is a combination of pershing and valeant. They make rostasis. Do they make the stuff that makes your eyelashes longer. I dont think so. Brooke shields was the pitch. Latisse. I think ackman keeps that company in business with his long, luxurious lashes. I dont think theyre related. You sure . No. But i dont think theyre related. But does he have yes. Yes. Well get to mulally eventually, right . We are. Before we do, can i tell you about netflix . You may. Netflix, we were waiting for after the bell got a strong First Quarter result. The video streaming server beat expectations, 86 cents a share, 3 cents better than the street was expecting. Netflix also announced they will be raising fees for new subscribers by a buck or two. That stock up by 8 , a began of 28 todays 377 a share. Also during the webcast, following the companys results, the ceo, Reed Hastings had comments about his objections to the comcast Time Warner Cable deal and control of the internet. Were really concerned about what happens when the combined entity, if the merger were to go through, would have with, you know, over 60 of u. S. Homes passed and eventually over 50 of u. S. Homes subscribing to cable internet. Thats a worrisome factor. We think its more in the Public Interest to not have them merge or if the government goes ahead with it, to at least put some significant merger agreements, settlements in there. Brian roberts is incredibly thoughtful. Id say if theres anyone that you wanted to trust with controlling half of the u. S. Internet, you might pick roberts. Its thoughtful, long term about it, reasonable. I dont know that we want anybody to control half of the u. S. Internet. Thats the real basis of our objection to the merger. And here was the response from comcast, which is our parent company. Comcast says netflixs opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments. Theres no company thats had a stronger commitment to the openness than comcast. Were the only isp that is currently bound by the Net Neutrality rules. Well have much more on netflix and comcast throughout the show. They are scheduled to release Quarterly Results this morning as well. Netflix is a competitor to comcast as well. Yes. Content company. Thats what youd expect him to say. Originally because of the deal that was struck between netflix and comcast in terms of paying for faster access to it. He likes what he got to some extent. These are all none of these things are that surprising. No. That he would weigh in like that. I thought it was damning with praise, you know. If anyone would own 50 he said 60 . Hes saying brian is a good guy but its all sort of a par for the course. And of course theres going to be im not going to be a defender. Comcast said there would be a lot of things that would happen with charter or whatever. With losing some subscribers. Making it the bottom line, they really operate in different geographic parts of the country. So its going to be, if youre going to use the normal metrics to measure it, it doesnt come under comcasts point has been there are so many other things theyre competing with, whether its verizon, fios, google. Apple, amazon. The future is wide open. You know, whether i havent seen anything in the Digital World that costs more now than it did 10, 15, 20 years ago. You let the market work and consumers will, you know benefit as a result. Eventually. Well see. It is a big week. We have a ton of earnings starting today. A busy earnings season. We have annual meetings coming up. Cocacola will be holding its annual meeting tomorrow. Ahead of that activist shareholder, David Winters has been reaching out to cokes largest shareholder, Warren Buffett. He sent him a second letter urging buffett and Berkshire Hathaway to oppose the equities plan. He says that this is a situation where he really wants Warren Buffett to stand up and take his side on this. No way. This is a guy like 100 shares. David winters is a longterm investor. He has no money in it. He has 90 million in it. Hes been a longtime investor. Its like 100 shares compared to what buffett has. This is 90 million on a 160 billion company. 90 million. He raises fair points about what Warren Buffett has said in the past about executive pay. He quotes from some of his own annual shareholders. On wednesday, well be speaking, tomorrow, with Warren Buffett. Hell be joining us after he dines with the winner of the annual glide foundation auction, the lunch that was auctioned off. The winning bid was 1. 1 million. It goes to provide services to the poor and homeless throughout San Francisco through the glide foundation. Well be talking to buffett tomorrow on street signs. He hasnt said anything yet. Well get a chance to talk to him tomorrow. I would say he probably cokes been doing better. The last report was much better than people thought, too. It was. Coke over the years trying to replace new coke and all that. A lot of money. This is a big step up. Its based on performance, the way that it works. Well see. Okay. Well be talking to him tomorrow. Well find out. I hope hes watching. I hope he listened to what his answer should be. Im sure he was taking notes. Okay. Its me . I thought we were going to do mulally. What happened . All right. Because mulally, you know why, his entire career, as hes been ascending and doing better, hes still a young guy. I see where hes headed . Where . Cnbc contributor. Im positive thats what hes we can only hope. Different boards. He may serve on a few boards. Now he is qualified. Right. Hes paid his dues. After a live lifetime. Wouldnt you love to have him here as a guest host . Yes, i would. As the pinnacle of an illustrious Career Training ground for this next gig. Hes hoping we offer that to him. Netflix, Company ReportedFirst Quarter results that beat wall street expectations. The movie streaming giant, they moved into that pretty fastily, didnt they . It announced it will raise membership prices later this quarter. For new subscribers. Never thought, bill, it would be easier for people to deal with will . Youve gone with it, your entire life, will power. You never get tired of this . It has positive connotations. Youre right. The guy that does the motivational speaking, will power will be a good name for that. Anyway, this was better than its good to have options. How can this stock which you mentioned netflix to anyone, and they know what the valuation is. How does it get bid up another 30 based on any type of results . What did it show . Look, its a classic growth momentum name, right . As long as they continue to deliver Strong Subscriber growth, revenue growth, Earnings Growth, the stock will continue to work. We think the prognosis looks good for probably the next several years. I looked at it yesterday. Just to see what the projected earnings were so be. I can see the story. I remember a couple quarters ago. There were items where they earned pennies. It was like 200 or 300. You wonder, how can you possibly justify that kind of price . This company is supposed to earn 10 or 20 in a couple of years, right . Thats exactly right. Were looking for earnings of close to 350 this year, going to 6 plus next year, 9, 10 the year after that. The story is international. They deliver very strong domestic results. The bigger beat in the quarter, both in terms of subscriber growth and profitability is on the international front. The company is still Getting Started on that front. Thats 20 , 25 of the business. Over time, that will probably be the majority of the business. You have several launches this year. That will dove tail with more launches than that. What do this he have thats proprietary . Isnt everyone going to be streaming content eventually . Theres no question theres increase in competition. One of the challenges is to find ways to differentiate itself. Of course thats what its trying to do with its original programming. House of cards, orange the new black launched a season here. They have a whole host of new programs coming. Thats what really establishes longer term differentiation for them. Well, now theyll be dependent on content. We know youve seen the network wars over the years. Or even movie studios. You can have flops. Its expensive. I dont know if id bid it up based on that. I think thats one of the reasons theyre raising prices a bit. They tried that one other time. He had to come out and apologize and everything else. Its a hard business. Yes. Well, i think theyve learned lessons from that. Theyre looking at a very modest price increase, really initially only for new subscribers. I think thats the right play here. Its still a great value, even if its 8, 9, particularly with the rising con tonight the theyll deliver. If you want to be a new customer, sign up right now . Thats exactly right. That will probably help q2. It does give you extra incentive. They made it pretty clear over time, even those that are grandfathered will start to pay a higher fee. 1 to 2 is a raez anable number, we think. The dvds arent out yet, its not on demand, its on netflix. I used to be a subscriber. Its on our playstation. Its confusing. This new world is confusing to me. Why is it on my playstation, will . They want to make it as widely available as possible. Playstation, chromecast, apple tv. Simplicity. Thats me. Thats why its on because i have to switch the button to the playstation. This world is daunting, this new world. Will, thank you. Appreciate it. Good morning. Thanks have having me. When we come back, fords succession play, the automaker expected to announce Ceo Alan Mulally will be stepping down. Well see if mark fields has the right stuff to keep the Company Moving forward. And sir andrew witty, Glaxo Smithkline ceo will be our special guest. Hell talk about some of the big deals with novartis. More squawk box right after this. St dcircumstances. Experience builds character. Experience builds confidence. And experience. Has built this. The 2014 glk. The engineering, and the experience, of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back, everybody. The futures at this point barely budge. If youre looking at the dow futures, up by 3. 25 points. Nasdaq up by 7. 25 points. S p up by less than a point. Down right now. Take a look at whats been happening with the tenyear note. Weve been watching this yield very closely. This morning, the yield is trading at 2. 71 . Automaker ford is apparently planning for the exit of Ceo Alan Mulally. Various reports say mulally will step down before the end of the year with a more specific announcement coming in a few weeks. The reports say mulally would be replaced by current chief operating officer mark fields. Fields was named to that position in december of 2012 and has been widely seens aa potential successor to mulally. Ford wouldnt confirm the reports saying only that it does have succession plans in place for all of its key leadership positions but does not discuss them. Alan mulally became ford ceo in 2006. Ford was one of big three that did not have to go asking for dollars in washington. Ford stock has nearly doubled as a result. Go out on top, right . Well positioned. 68 years old. Didnt go to microsoft but doesnt need to go anywhere. After boeing, and then turning around there were so many doubters when he came into ford. Just because you know how to run an Assembly Line doesnt mean you know how to run a car company. He works hard. He travels all over the place. I think he plays golf. Might be nice to be on a a couple boards, hed be widely sought after. I cant imagine mulally retiring officially. No, no. I think they had to lock down mark fields, too. He had been offered a star on a primetime soap, the remake of dynasty. Hes a goodlooking man. Can someone that pretty be smart. We have you. What am i thinking . What am i thinking . Thats right. But we always kid mark fields about that. Central casting. Good looking man. Right. What does this mean for the future of ford . Joining us now is jeff sonnenfeld. Hes a senior associate dean at yale school of management and also a cnbc contributor. Is he good looking enough to be a contribute contributor . You would know that as well. We have a picture of you, jeff, that shows the new disappearing you as well. I know. Thank you. You used to complain i was using a high school picture. We have the 120pound im going to buy you a cheese burger. He looks good. Hes kept it off for a long time. Hes worked hard. Jeff, what do you think about this transition . Is mark fields the man for the job . Yes, he really is. This is the classic textbook succession. We wish all companies could do it this way. Heres a guy step by step has learned all the core functions. Hes a core strategist, the ford one plan that, of course, Allan Mulally has championed. He championed the restructuring plan. The cross functional skill set operational superstar. Hes a marketing wizard. Financially very strong. All key constituents, from the dealers to investment community, employees. Its an awkward situation to be in to get along so well with his chairman in, bill ford, alan mulally and his predecessor. Jack nasser was a very strong leader at one point, would have been a mentor to mark at times. Mark never disparages anybody whos rising or falling or trying to build his career. Hes become a genuine car guy in a business that too many times, too many of these, quote, unquote, finance guys who are accountant types, hes really proven himself since age 38. He took over, became ceo of mazza. The premiere Automotive Group that he ran very well which is volvo and jaguar and some of these great car divisions that sadly they had to let go for cash at a different period. North american sales, incredible turnaround. That was north American Auto business for them, they were losing record losses. They stepped in there, about 9 billion in profits there alone. Right. He has the track record. The one surprise on this, we did expect alan mulally to be staying through the end of the year. He had said that specifically. When push came to shove when there was talk about him leaving for microsoft. Why the change potentially at this point . We dont know officially this is actually happening. The rumors are that alan, as he has had before, people coming after him. Hes become one of the greatest icon of u. S. Global industry. What hes done to revive manufacturing. One of our ceo summits, an extremely promising financier said who wouldnt invest in a plan . Alan practically fell out of his seat. He has shown how you can be a tough turnaround guy without being abusive. Hes been a great mentor to mark along the way. I think he has a lot of opportunities and perhaps something has heated up on a front burner for alan. It clears up