Business. With a deal like this, looks like he was a good learner of all this. Well talk much more about this potential deal in just a few minutes. Immediately people are saying apple never paid for a brand, it was always its own brand. Beats, at first i didnt understand it. It was totally overpriced. My kids both have a couple of pairs. Theyre plastic. I dont know whether the sound is better. I know kids want them. I remember a couple of kids were looking at them. I wonder, are those knockoffs, are there real . Theres a cache around it. Theres the music business. Thats fledgling. Thats what apple really wants. For a couple of years, downloading itunes was growing and growing. Now its down 6 or something, yearoveryear for those tunes. I was amazed that sales of beats is like 1. 2 billion in revenue. I was thinking about that. Everybody who wants a pair has them. But they break. At least the ones my kids have had, that weve had to replace. If you drop them. 3 billion, 1. 2 billion in sales. At least i can do the math and understand theres a real product here. I guess is it iovine . I guessed on that one. We need andrew. The nfl draft, in new york city, i dont know if he was there, if andrew was sleeping you had to sleep over there to get tickets to go into rockefeller center. I dont know how late he was there watching the draft. I think theres traffic on the bridge. He was not at the draft . No. I think its traffic on the bridge this morning. Iovine was close to steve jobs and also brought us the black and red ipod u2 thing. Right, right, right. He has a relationship with that irish superman with bono. Bono. Are you sure . Im sure. It was sonny bono. And this guy is bono. No. It was sonny bono. The other guy is called the edge. If youre a rock star you get to do whatever you want. What is his name . Paul hagas or something . Isnt paul who . Hagas. One deal may be in the works another is falling apart. The proposed 35 billion merger between omnicom and publicis has been called off, as the challenges informing the Worlds LargestAdvertising Agency proved too big for the partners, too many delays. Too many uncertainties. Concerns about some of the brands. They were going to lose some big accounts. They needed to Stay Together to take on new media, new advertising, google, facebook. You know who was saying he was in favor of this whole deal was sir martin sorrell. I think it was creating internal strife. A lot of their clients were upset. If you own the coke account you dont want to be merged with the people that own the pepsi account. Sir martin was hoping for an even fatter paycheck than 50 million that he made. I think so. Hes gotten some serious grief from the uk over that. I like him, though. Hes all about income inequality. He likes that 50 million. A lot of guys like that. Anyway, as presented in july as a marger, the deal began to seriously unwind after omnicom chief executive john renn expressed during an Earnings Call some concern late april citing some tax complications. Renn and maurice levy, the other ceo said in a joint statement on thursday, we have thus jointly decided to proceed along our independent paths. We remain competitors but maintain a Great Respect for one another. Shares of omnicom, they are indicated a little bit lower. I think people wanted this to happen, omnicom shareholders. Theyve gone a long way towards making that happen and in the process probably created problems and were dealing with the down side without getting the up side on it. Who are these two governors, speaking out against the pfizer astrazeneca combination. Martin omalley. You need to play that song. Alley cat. From aristocrats. Marco sent a letter to pfizer, to ian reed, the ceo of pfizer, expressing deep concerns about the bid. They question the impact on the deal would cause jobs in both states as well as pfizers open interest in relocating its corporate base to britain. Astrazeneca employs around 3,100 people in maryland, 2,600 people in delaware. Wall street journal is laying out the Tax Implications of a pfizer astrazeneca deal and not just what it would do for pfizer but it would affect pfizer shareholders in some weird, not well understood or wellknown law, i dont know, i have to read it. Its in the tenpoint of the wall street journal today. Pfizer shareholders face a tax hit if a deal for astrazeneca goes through. Why dontd we learn about it together. What page . B1. It would cut its yearly tax bill but it would trigger something for shareholders. Shareholders with stock in taxable accounts would own Capital Gains taxes in the appreciation in their chairs when theyre converted into the stock in the merged company. Youd have to pay the taxes on the appreciation. Oh, that would thats a big hit. That would as bart simpson says a lot, that would be bad. I wont say the s word. The hit would stem from a little known provision of u. S. Tax rules that is triggered when a company buys a firm overseas and relocates there. You have the same Capital Gains shareholders would get how much of this deal is in stock . If i own pfizer stock, i would be very unhappy. Although if you sell it because youre ticked off youd still have to pay the Capital Gains. Thats not a very shareholder friendly policy. The futures this morning after yesterday, you did see the markets closing slightly higher yesterday. It was a mixed day yesterday. Markets cl s closed near the lo the session. You see red arrows. The dow indicated down by 8 points, s p down by 1. 5 points and the nasdaq down by 5. 5 points. Take a look at the tenyear note. At this point its yielding 2. 6 . Sitting right where its been sitting all week, above or below that 2. 6 yield. Well see what happens today as we get closer to the opening bell. Also take a look at oil prices this morning. Oil prices right now are up by about 82 cents. 1010. 08 is where wti is standing. The dollar yesterday, we were watching closely at the euro after that ecb decision and also talk from the head of the ecb about what had been going on. You saw the euro give back. The dollar is higher once against. Its trading 1. 3814. The dollar yen, the dollar is up against the yen at 101. 74. And gold prices this morning look like they are trading up slightly. 1,287. 1,287. 40 an ounce. What is apple thinking with a possible beats buy . Does it make sense. I struggle to figure out a way that this makes good sense. Hooerz the best i could do. Beats known for making pretty expensive head phones. They have a streaming Music Service that theyve been running since the beginning of the year and also a Service Called topspin that connects artists to their audience. Look, the best pro case i can think of is defense, maybe google or amazon was sniffing around beats. Beats has a decent business in music. Theyve been able to make high margin hardware. Apple knows how to do all that stuff already but it sure wouldnt be good for its competitors to get into that business. Maybe apple is looking to dramatically overhaul itunes, the way it handles Music Services. Itunes radio is to have to a decent start. Some rankings have them number three or four in the streaming business. Theyre not exactly blowing the doors off. Jimmy iovine is a genius in the music business, been in it since the early 70s. Beats didnt have the much in terms of intellectual property that would justify a price like this. There would probably be a culture clash between a somewhat buttoned down, quieter apple character and dr. Dre. Plus its backward looking. Music, apple already won that. Why spend a bunch of money to try to win it again. What is beats . They sell from mid200s to mid400s. I had a pair, they tended to fall apart. They managed to turn that accessory into a fashion statement in a way that hadnt been done before. The company is about six years old. Of course they have the streaming Music Service. Downloads have pretty much flattened out. Theyve gone down a bit, streaming Services Like spotify and even pandora are on the rise. Not a lot of profit in those but theyre gaining in popularity. Apple might be looking for a way to answer. 3. 2 billion, boy, thats an expensive way to answer. Its not like a 16 or 19 billion whatsapp. I see so many reasons to question it. My knee jerk reaction is, what are you doing . It implies you cant come up with anything itself. Youre buying this company, it has a name and a brand. Is that the point youve reached now that youve run out of ideas . I see all these things. Ill take the opposite side. Thats the consensus. No one understands this deal. They must know something to be doing it. Apple doesnt buy brands. They are now. I dont know. They sniff around a lot of stuff. A lot of times they dont actually pull the trigger. How long did it take beats to do the music streaming . Apple could have done that themselves, couldnt they . But they dont have jimmy iovine. Beats got this from mog, apple has had plenty of opportunity to buy this, lots of people willing to sell it to them. They didnt want you say potentially from a defensive perspective, they didnt want google or someone else to get the streaming music. Thats one way it could make sense. Apple will dip its toe in a lot of these deals. It loses out particularly when it has to do with data. Apples culture, its a craftsmans culture. They like building things, determining through force of will what the answer will be. In the data business you let the algorithm determine the answer. Apple, its culture doesnt go with that. Its a little depressing. I would have liked to have seen the head phones that steve jobs would have designed in terms of how they look, they work, the style. You know how elegant everything he did was. It was almost like architectural where form follows function. Johnny wouldnt design beats headphones. Its hard for me to imagine apple buying this and doing anything but killing it. I used to think kids look funny Walking Around with headphones. Theyre everywhere. Kids are supposed to look funny. Sometimes its the nerdy kids that have the headphones. My mom got mad at me when i started shaving my head in high school. Were you losing your hair in high school . I wasnt. Michael jordan was shaving his head. It was a choice. I was shaving it close and i took the guard off by accident. Do you know now if you were to grow it back what would happen . Oh, yeah, the lines are pretty clear. You have lost hair since . Yes. You wouldnt grow it back and go, oh, no, im bald. I know. The jury is in on that one. You do know. I could draw you a line. That was a good seinfeld. The guy was bald for three or four years. Then when he saw he actually was bald, he was upset. Youre very handsome. That works for you. Thank you, joe. It wouldnt work for me. I have ears, bumps. You dont know until you shave it. Right. I have things that it looks good on him. I know he does. I see the mail that comes in. Joining us right now on the squawk news line, for more on apples rumored bid for beats is david garrity, principal at gva research. Whats your take on what has happened here or what hasnt happened i should say, at this point. I want to go back to the point joe made earlier on. At the time that Carlyle Group put 500 million down for a minority interest in beats, the company was making about a billion dollars. Well, david rubenstein, hes not like venture capitalists who will buy companies that are losing money. Lets start with the assumption that theres probably a reasonably attractive profit margin on the billion dollars. The billion dollars was being realized before they started the music streaming business. Lets say they made 40 margins on the billion dollars. It says apple is buying beats for eight times ebitda, which is not a crazy number. It also says that the music business is something that engages consumers, brings people back to apple. If we have to go back and look at what launched the ascension of apple in the Consumer Market was the launch of the ipod back in 2003. Clearly a defensive move but i dont think its a bad use of apples capital. Obviously at 150 billion of cash. A good deal, you like it . You know, i think financially it makes sense. People will be critical of it because its not necessarily move nothing a new product area, which is what investors have been looking for but i think for an area that continues to be so in the future, there are worst ways. I told you. Because i didnt understand it, it would probably make sense. Can i ask you a question . The consensus is nobody likes it. Why not spotify . Spotify didnt have the 50 margin. Why dont you buy the best thing. When you have the most money and you want to get into an area, buy the absolute best. Beats is nothing. Its a fashion accessory that will be unfashionable in a year or two. You know tim cook. I implore tim cook to think about this. Were you thinking about this on the bridge. Ive been thinking about this a lot. Im upset about it. If you went out and got spotify, looking at beats, youre actually you broke up. Why would it not make sense for april toll buy spotify . How much would it cost . Do they make as much money as beats . No, they dont. Spotifys multiple would be higher. With beats you are picking up some Product Design capability. At the end of the day, beats probably makes a lot more sense because they get more for it beats has products and some designs that apple just could not stomach keeping around. If you imagine apple taking the business and you justify it based on what theyre making right now, i dont think you can do that. They make silly looking stuff. Can i say they make some crappy stuff . We talked about that. Theyre plastic. Its a fashion accessory. Thats what it is. But it cost 30 to make and they sell it for 400. That may very well be. This does not help change apple. No one said it. You missed all the earlier conversation. I did. I apologize. It immediately raises the question, wow, are they desperate . Cant they come up with anything new . They should just buy victorias secret. Come on, beats is more closely related than underwear. Not really. Its a new category for apple and theyre growing. The more the criticism comes, the more were together on this. The more criticism from the unsophisticated types, right . Thanks to david, john, thank you. I think well see you a little bit later. When we come back, how to make yourself happier than you are right now. The author of 10 happier tells us about reducing stress without losing your edge. More happy squawk right after this. Can you start tomorrow . Tomorrow were booked solid. We close on the house tomorrow. Tomorrow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. Csx. How tomorrow moves. Was another huge week on squawk box, buffett, gates, brans branson, feldstein and joe meeting the other most interesting man in the world, all covered in this weeks talking squawk blog, squawk. Cnbc. Com. Plus it has our jumble record for the week. Did you win 21 or something. I think we only played once. She won one time. I will remind you of that because its a rare occasion when i can win the week. You thought it was you dont have the k. For an ox that is smart. Is an ox a yak . I dont think that way. I won. I have no idea. Thats all shes focused on, the winning part. Brainiac. Youre hitting abou about. 300,. 320. A sore winner. 320. Im the boast winner, i will admit it. Gap issued an upbeat profit report as they reported sales, that topped expectations. Wow. Gap says that it expects fiscal First Quarter per share earnings of 56 cents to 57 cents, beating analyst expectations of 53 cents. The company said net sales for the quarter increased 1 to 3. 77 billion. Also beating analyst forecast which called for revenue of 3. 6 billion. Comps were up from a year ago. If you check out shares of gap, youll see theyre up to 41. 06. Well talk about being happy this morning. Can we play the happy song . Well play executive edge. The question, how far would you go to be 10 happier . How about 10 more productive or at peace . I want more than 10 . You want more than 10 . Well talk about that, too. You might be able to have all three if you turned inward. And just meditate. We always talk about meditating on this show. With us now, author of 10 happier how i tamed the voice in my head, reduced stress without losing the edge. Its like a fiona apple record title, its really, really long. If you have voices in your things you can try for that, too. Yes. There are side effects for the antipsychotic do you have a hookup for me . There was selfmedicating. You talked about that publicly, too. Back in the day we used to hang out. I wasnt selfmedicating. You were a good boy, ill say that. Years ago, but a decade ago in a prior life we used to see each other socially. Are you talking alcohol or everything . Selfmedicating with cocaine and ecstasy. Yes. That scares me. After coming home from covering wars in afghanistan, iraq and other places. And i got depressed, did a stupid thing and it gave me a panic attack on live television. No way. 2004, gma. I was anchoring the news updates, lost my ability to speak. Terrifying. Then i knew i had to make some changes. What happened, what did you do . Interestingly, my boss at the time, peter jennings, assigned me to cover religion. I had a bar mitzvah but for the money. It ended up being a great thing for me. I met a lot of people, developed a respect for people of faith and ended up stumbling into meditation a couple years into it which i always thought was uniquely ridiculous. I started doing tm about a year ago. How did you get into it then . Its a long, strange story. Do you do it every day . I do it every day for 35 minutes. I always hesitate that. I think five minutes is enough. You probably do 20 minutes twice a day. I do 20 minutes once a day, though im supposed to do 20 minutes twice a day. A lot of people say i dont have time for this. I think five minutes is fine. He may have antipsychotics for you. Well talk about that. The look on his face when you td up this segment is priceless. The camera wasnt on him. Which part . When you started talking about turning inward and happiness. Theres no one happier than me. Really . Than me . Im prepared to believe that. Wait. Did you have to take a path before you got to meditation . Yes, yes. Or other things along the way. I went to see a doctor. He explained to me it was the drug use that most likely caused it. The meditation i found years later. I only tell the story about the panic attack. Its a great example of the type of thing you can do when youre mindless, not thinking about whats going on in your own head. Do you have a wife and kids. I have a wife, working on the kid part. Im done at 9 00 every day. Thats a beautiful thing. I have three dogs. Im ecstatically happy.