AMR-US Airways Finally Merge and Heinz is Acquired: Morning Buzzers

The U.S. equity markets were off to a bad start on Thursday morning. News out of Europe and Japan that showed both regions remained unexpectedly in recession in the fourth quarter promises to rain on Valentine’s Day trading. Sounding at least a small note of optimism is the weekly initial unemployment insurance claims report, which showed a 7.3 percent decline in first-time claims to 341,000.

Futures at 9:00 a.m.: DJIA: -0.35%, S&P 500: -0.30%, NASDAQ: -0.36%.

Here’s what’s buzzing on Thursday morning:US Airways Plane

US Airways (NYSE:LCC) and American Airlines (AAMRQ.PK) officially announced the definitive merger between the two companies, which has been in the works for over a year. The all-stock transaction will create a combined entity with an implied value of $11 billion, and will operate under the American Airlines brand. Under the terms of the merger agreement, US Airways stockholders will receive one share of common stock of the combined airline for each share of US Airways common stock they held. US Airways climbed as much as 3.3 percent in pre-market trading.

Cisco’s (NASDAQ:CSCO) highly-watched fiscal second-quarter earnings, released after the bell on Wednesday, had investors pushing and pulling the stock in opposite directions for a while. The networking giant reported a 5 percent increase in revenue to $12.1 billion and net income of $0.59 per share that topped expectations, but kernels of weakness raised some eyebrows… (Read more.)

Rio Tinto (NYSE:RIO) faced some pre-market selling pressure after publishing its full-year 2012 results (shares could also be affected by poor euro-zone economic data). CEO Sam Walsh laid out clear steps towards improving performance, saving costs, and ultimately maximizing shareholder value as he looks to continue reversing a long-term decline in the company’s stock.

InvestorsH. J. Heinz Company (NYSE:HNZ) soared nearly 20 percent in pre-market trading after confirming that it will be acquired by 3G Capital and Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) for $28 billion. Shareholders will receive $72.50 in cash for each share of common stock they own, a 19 percent premium to the stock’s all-time high.

Pepsico (NYSE:PEP) was up about 2 percent in pre-market trading following its fourth-quarter and full-year 2012 results. The company delivered 5 percent organic revenue growth and full-year core EPS of $4.10, and announced that it would be increasing its quarterly dividend by 5.6 percent.

Time Warner (NYSE:TWX) has reportedly begun discussions about spinning off its publishing division Time Inc., which pulls in about $3.4 billion in annual revenue. People with knowledge of the matter suggest that Meredith, a publisher based in Iowa, is the interested buyer.

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