Its official, halliburton buying baker hughes for about 35 billion, and weve got more on activists and the fight for allergan. Forget wasting time at work. Menlo park reportedly developing facebook for your office . Moving in on google, microsoft and linked ins turf, down 3 in the free market. Numbers inside japans recession, gdp down 1. 6 following contraction of 7. 3 in the prior quarter. This week japanese Prime Minister abe expected to announce delaying plans to race the countrys sales tax and call for parliamentary elections in december. Estimate was 2. 2, to the upside. No one expected this to happen. Now a bunch of policy decisions to make. Do you suspend sales tax . This felt like 1937 in our country where they thought, you know, weve done enough to make it so were coming out of the great depression, lets start raising taxes, be more conservative. There are a lot of people saying that, you know what, this was just being prudent because the country itself is so in hock. I saw these numbers and i said, here we go, another country that i had thought kind of felt like things were Getting Better along with india. That was wrong. And i can understand why the futures are down. Yeah. Brazils in recession now. Russia, of course. Italy. France and germany not doing much to stay out of it. I mean we are with the exemptcen of india ahead of the game. Were not a big trade partner, as well as other countries. We have a big market here. I think that its been so long that we have felt any selfrespect that i think people dont believe, you know, the United States, i mean, if it if we dont have china, japan and europe going were nothing. 85 of business is done with Business People in america, it does mat. In japan, what do we expect will be the outcome of this . Theres talk of a new government. Yeah. Hell still be in control new york doubt about that. But to resolve any issue about the second part of the tax increase, which seemed to have a dill tear yus effect on americans to spend money. Kuroda buying anything and everything they can in japan. Or outside japan, too. Look, i think that what when we saw some numbers, retail Sales Numbers out of japan after this happened most of the companies i deal with in japan are saying double digits. Everybody who moved into japan thinking this is the nirvana moment has gotten fooled. By the way, a lot of the auto company interests japan have been moving up, up, as well as ours going down. Curious to see whether that can continue. Meantime, japan had a nice run off october runs, 10 in 4 days. Jpmorgan cutting u. S. To under weight. They think that europe is due for a period of relative outperformance. A weaker euro to work with now. Some stocks have come down a great deal. But did this include the g20 stomp out by putin and the idea if anything, things did escalate this over the weekend . The g20 move was a bust. It wasnt like did we get the final photo opportunity . I dont know. Australias Prime Minister talking a big game about confronting putin. Not sure that ever happened. Britain joking with him about the need to have a naval force off of the coast of australia. He was the butt of man n. Jokes things got worse, not better. But got some things accomplished in beijing. Another failing country. Kidding. China decelerating and say i wish we had that kind of quote still. Trajectorys not great. Two of the Worlds LargestOil Services Firms hooking up, halliburton acquiring baker hughes, 34. 6 billion in cash and stock. Halliburton says its confident the deal will be cleared by regulators and expecting to close that in the second half of next year. Big divestitures, big breakup. On friday, i had said so much has to happen i cant imagine they can pass it. They did everything zbrp i think key things are the willingness to divest 7. 5 billion of revenues, 7. 5 billion of revenues. 31 billion in sales. Gives you a sense. 7. 5 billion off of 31 billion. The breakup fee far larger in a deal typical of this size, representing 10 of total conversation. That very large, goes to their confidence, jim, that theyll get it done. Speaking of people close to the situation, they point out, antitrust lawyer, extraordinary experience in dealing with these matters on the antitrust side in government. They feel comfortable about it. And with it. And, therefore, the expectation is they will be able to pass muster with the antitrust authorities but its going to be interesting to see. It will take a year as many people handicapping it will take. But the big picture that im hearing from those who advice on the deal, putting numbers two and three together, to certain extent in certain areas, theyre good at certain things were not. Theyre good at artificial lift and were not. Getting the energy out of the well with a fluid column is not a bad thing. Schlumberger, wow, evil giant, does have a fabulous glosser. Go there. Thank you for explaining that to me and to our viewers. You mentioned schlumberger. The goal to become the equal, if not exceed, schlumberger Technical Expertise and in their multiple. They want premium multiple. Thats the goal. Thats the goal. Schlumbergers fabulous company. Halliburtons done great things. I want to caution everybody this is a declining group. Weve got there needs to be consolidation. 75, there is the Conference Call last week said at 75, projects get killed. So, if you want this to happen if youre ahalliburton shareholder, halliburtons doing the right thing. Energy 9 at the s p. Nearly double that a couple of decades ago. Halliburtons biggest acquisition ever. Second biggest u. S. Energy deal this year. 274 billion. Energy the secondmost active sector in m a 2014. Youll see it more active now. What this is saying weve got a new reality, take advantage of. I was going over the bottom ind thursday, friday, they reflect the notion that were going substantially lower than 75, that we can be going to mid60s. You believe thats true . The stocks reflecting. I think it will hold at 70. And theres so much conspiracy go on the United States does very much want saudi to keep pumping because russia gets blown up and with that financially. I keep coming back and saying monthly numbers that come out, they are showing its like they discovered a prudhoe every three months down there. Incredible how much oil we didnt know we had, in part artificial lift. A very important thing. A very important thing. By the way, on the m a tactical side of this they made the first approach five weeks ago. They moved fairly quickly here. However they tell me theyve been able to identify 1. 8 billion or more, 2 billion synergies. Theres no doubt about it, you want halliburton to get those. Now, in five weeks, im not sure, but theres the number, 2 billion, thats a big number. Put a multiple on that, decide by the number of outstanding shares of halliburton, you get a pig per share number. 3. 5 billion, explain, what if Dollar General were to do Something Like that . Its not just a break fee for Dollar General and that family dollar. Its certainty of close which these dies guy guys are priding by a willingness to divest that much. Family dollar, dealing with antitrust concern, once again, they want more certainty and therefore say youve got to be willing to divest more stores. To me what baker hughes and halliburton are saying, justice department, tell us what to get rid of it, well get rid of it, we want the deal done. Last week you thought regulators would be fools to approve. You still feel the same . New york i saw a huge overlap. I look at one quarter of the revenues theyre willing to give away, what they did was say, yeah, there was a huge overlap and dont worry about it, were going to get rid of the overlap. This is astonishing. I dont think people realize how much business halliburton is willing to give away. It changed my mind about the deal. You can say, cramer, youre an idiot. No, they changed my mind. Another deal, people close to the situation indicate to me that in fact, allergan is getting bought for 219 a share. Wow 219 a share by activist, the deal is worth 66 billion, it includes 129 a share in cash and. 3683 of actavis shares. Talking about 1. 8 billion in annual synergies starting in 2016. Double digit eps accretion in 12 months. The ceo, look, they did forest, they have so many deals. Theyre good. Two allergan directors will join the actavis board. The number is 219 a share. Staggering. Which is, wow, so far beyond what some expected. Also this 129 in cash, synergy number larger than people anticipated. The cash number here, which of course theyll be taking on a good amount of debt at actavis but paid down a lot of debt, a significant amount of cash in excess of what people had anticipated. All of this, of course, conceivably closing the chapter on this long running battle under which valeant when it teamed up with hedge fund purchasing square, made an unsolicited proposal for cash and stock way back in the spring. That teaming up, if you will, of course, may have spelled valeants doom, when you look back. If they had chosen to go, jim, for the annual meeting, they would have made it, gone for a slate and challenged immediately, they conceivably would have been in a better position, valeant having lost se cephalon and this deal going by the way side. My sources and people close to valeant indicated to me a price of this nature, 219 a share, by the way it could om down if the stock price weakens which it may, youll have a lot of shorting, nonetheless, they dont feel they can compete but cited synergies higher than those cited by actavis. First, congratulations david pyott. The companys valuablen when i had saunders on, they were saying if david wants a deal, david pyott, well get a deal, guest the most on mad money of all time. You think the good guys win. Ackman does make a fortune on this. Ackman 9. 7 holder of allergan. Valeant has the opportunity to participate to the tune of 15 of his profits them walk away with some money as well. But they walk away conceivably here, we dont know what theyre doing but they walk away without what they had wanted. Maybe go after zoetis. Pyott, i think he can do 17 bucks in 2016. Posted number was 16. There are more uses for botox. I talked with david, we cant believe whats coming for botox. Things that he doesnt know that are going to come for botox. This is a remarkable drug. 44 shopping days this year. For botox . U. S. M a deal value 1. 5 trillion. Closing into the kind of year we had in 2000 with aol and time warner. Why do people think the s p is up . Look at health care stock, all breaking out, every one has another one if they bought them would be great. Can you believe actavis will pay this price . Im saying its great for actavis ultimately. Many would be surprised if you told them, even not that long ago, theyd be able to come up to 219 a share. Obviously cash and stock, but 129 of it in cash, we will keep an eye on the shares. They had been aggressive. Its funny, because of course one of the criticisms of valeant that you heard constantly from allergans camp from the earliest days was, serial acquirer that needs to keep the engines of acquisition going, benefit of a low tax rate. Valeant hasnt done a big deal in a year. Actavis their third big deal. All of the deals have worked. Theyre an amazing acquirer. I have to say if you look at allergan, they have this great franchise, not just botox, and degrowth is they had the highest percentage of r d of any major company. And i know actavis is anxious to improve on r d. Its a big day. Santelli at cme. Good morning. October read for Industrial Production comes out one. 1. We were looking for up a couple of tenths. Last months very aggressive up 1 was now degraded to up. 8. Utilizati utilization, 79. 3 expected. We arrived 78. 9. That 79. 3 which was the bef since 2008, lost steam. We lost a little bit of steam from there the market is reflecting this, as the tenyear note is about ready to slip under the 2. 30 level. Remember, weve had 14 sessions, not days, sessions, where weve been in a very tight range of 2. 30, to 2. 38. Today may be the day we break that range. Carl, its all yours. Thank you, Rick Santelli. The press release out from actavis and allergan. Dollar amount is enormous. 1. 8 in synergies. So, thats a number that i think is higher than people anticipated as well. Saunders, longstanding relationship with david. We are going to be able to speak to both gentlemen. Here. They are joining us. Here . Coming here. I dont need an ifb . No. Technical term. In 14 minutes from now. Nice. Mr. Saunders, mr. Pyott will join us as guests here on cnbc. Theyre both great guys. Look, pyott came on, when that stock dropped to 80s, he said, can i come on and tell viewers not to lose hope . 88, let me come on and tell them why they shouldnt sell . No ones ever done that. Give me a shot with your viewers, wow. Other news, facebook and Mark Zuckerberg taking aim at linked. Linked in is down. One look at futures. Lot of m a activity. Futures are lower on that weak in japan gdp number. The country back in recession. Were back in a second. Facebook working on a new professional website to compete with linkedin, dole and microsoft. The ft reports its called facebook at work, allow user to keep personal profile separate from work profile and enable them to chat with colleagues, connect with professional contacts. Interesting wrinkle here for a name up 53 this year. Thats been a stealth rally and then a stealth stall. I saw the ft played this thing up really big. My Charitable Trust own temperatures i believe in the company, believe in a lot of things theyre doing. Everything alibaba overshadowed by alibaba yahoo . People have stopped talking about facebook and still talking about twitter, but only in a way that says you know what . Twitters starting to monetize things. A great tweet this within about how twitters monetizing a lot of the nfl stuff. Nodo is public face. Do you think facebooks at a point they can pick off competitors at will . Yes. Like linkedin . Yes. I dont know if they want to. Yahoo needs it more than they do. Facebook has so much internal momentum and yahoo has a war chest and they need to buy some. Ive been working on who they might buy and acquire. Yahoo is the one that is most challenged, facebook is not challenged for growth. Yahoo when it looks at the opportunities in front of it in terms of what it could buy, it would seem for the highest quality assets, its going to be competing with facebook or google or google in particular. Google in particular which may make it difficult to do something monumental, if you will. Right. But theyve got to get out of this display advertising. Dont get out of it but recognizing it, its a terrible business out 0 of nowhere. Three years ago it was a pretty Good Business. Incredible deterioration. Cramers mad dash. The deal of the day. Live interview of the ceos with actavision and allergan on their merger. Premarket as we get this monday started. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. 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I think wasnt that what pfizer wanted from astrazeneca. Great point, jim. That was oncology was the key franchise there. We can rule out at this point, you never want to say 100 , but rule out pfizer going after astrazeneca. With the purchase, theyre moving in a different direction. Change in inversion rules as well probably prevented pfizer from another deal, from what i understand, which was actavision. What . And that also is something that is not going to happen. But pfizer was thinking about doing one, its attempt to take over astrazeneca failed. Pfizer might have been interested in actavision to get growth . Absolutely. The change in inversion rules from treasury changed the land escape in terms of what theyre looking at. You know, one of the best performing stocks in the groups since they dropped shire. They figured out their hepc franchise. Other things coming up including ceo of actavision and allergan at nyse when we ring the opening bell. 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