>> the u.s. and eu plan to impose new penalties as earlier today on president putin over the escalating crisis in ukraine. --simmons wins support siemens when support for its asset plan. >> and the biggest shakeup in the drugs industry continues after pfizer is said to renew discussions to buy astrazeneca. hello. welcome to "countdown."

>> the time in london is just on 7:00. a french presidential audience for ge's ceo and a rival bid from germany's siemens. settles a remarkable three-day scramble. hans nichols is in berlin to break down oust him down -- break down alstom's choices. are they going to be open on friday? >> they will not be open until wednesday. they have until then to , oneerate over one bid formal offer. it comes down to one crucial question. here is the ceo of an american company. do you ask for permission from the french government first before putting out that big? jeff himmel had the conversations with alstom. his board has approved it. then the french government got wind of it.

today, he has a meeting with french president for an swap along. -- francois hollande. did he oron there is, should he have contacted the french state before he started getting everything in line? what has happened in the meantime, siemens has put together a rival bid. this is an asset swap. siemens would take the energy unit from alstom and give them the train unit. they are prepared to make guarantees for no job cuts for at least three years. it would make france the leader of rail and transport. the deutsche bond trains would be built in france. they would match or exceed the financial terms offered by ge. here is the ge case. they have approval from their board. they have done their due diligence and are much further along. they say acquiring the energy business would lead to growth throughout france read transport business would be spun off.

some of those assets would stay in france. and fewer job losses because there are less costs over this, lest sharing. it would be a binding offer. a decision has to be made by wednesday and it is a remarkable choice read so much at stake, not just with french industry, but what france is going to do to revive their economy. will they accept bids from outside companies, from u.s. companies that have all of this cash? they do not want to bring it home because if they bring it home, they have to pay those high tax rates. >> thank you. hans nichols covering that mnj story.- that m&a from one bid to another. >> pfizer and astrazeneca are in talks. an offer is on the table. pfizer had previously offered 46 pounds for astrazeneca. it could make an offer anytime for less than that offer.

last week, this was a big story. they were in talks a few months ago. nothing came of those formal talks. as we have been reporting all morning, pfizer has come back to the table and it is confirmed, continued interest in the country. >> confirming continued interest in a takeover of aster zeneca. it reminds you of the value of some of these businesses and the size of a takeover. astrazeneca valued over 51 billion pounds. that is 86 billion u.s. dollars. this would be a big deal even in a sector where we see big deals. pfizer continues to have interest in astrazeneca. it is continued -- it is considered to add to adjusted eps. >> there is a deadline they have to make an offer, may 26. about another three or four weeks to officially launch that did. >> we will continue to watch

that story. further analysis later today on that one. >> let's focus on what is happening in ukraine. u.s. will impose new sanctions as early as today on russian individuals, russian countries. ryan is here. this follows the fear of international -- by pro-russian separatists. >> the ministers will meet later today in brussels. they may act today. they may have to wait for the leaders of the eu countries to sign off. we expect them to begin deliberations today. the deputy foreign minister of germany says they are going to add 15 names, at least, to the name -- to the list of individuals that they will sanction. in addition, the united states is prepared to act today. have a listen. >> we will be looking to designate people who are in his inner circle, who have a significant impact on the

russian economy, we will be looking to designate companies that they and other inner circle people control. we will take steps with regard to high technology exports to their defense industry. all of this together will have an impact. >> in terms of the individuals they are sent to designate, we understand they may designate the ceo of rows left -- of rosneft. that bp has a 20% stake in. >> does that have ramifications for bp? is that embarrassing for bp? what would you say? >> it may not have any direct impact. we have russian oil's ceo, he has been sanctioned. yet russian railways appears to be functioning, as a company, more or less normally. despite the fact that the ceo has been designated by the united states. clearly, if you are bp, uncomfortable if you are doing

business in the united states. the united states could actually sanction and that might create discomfort for you in terms of your relations with the u.s. government, the european government. i think we actually have the ukraine foreign minister -- is that -- that is my mistake. >> we are hoping to get him this hour. as soon as we get him, we have lots to talk about. of course, the interesting thing will be to see how the russians respond. late last week, we saw vladimir putin say that visa and mastercard are going to lose market share in russia because they declined to service the credit cards of some russian banks after the first round of sanctions came out. the biggest loser on the dow jones industrial average last week. dropping about five percent. an interesting space to watch. >> we will see you later. >> the farmer frenzy is waiting

-- is reaching into germany. bayer is said to focus on growing its health business. we are joined by david tweed in berlin. bayer reported first-quarter earnings in the last hour. take us through the numbers and their intentions with regards to &a.nd a -- m ebtina came out with numbers, better than expected. and estimateersus of 2.50 6 billion. illion. b inset by improvements operational performance. good numbers all around. that said, what a bit of m&a isching bayer and it focusing on its plastics business. this is an area that a lot of

people have been speculating like to hideuld off because it has not been making as much money as its cost of capital. with their earnings today, they do say that there ebitda rose by 80%. m&all be back with more on surrounding bayer later this hour. >> thank you very much. >> we have had breaking news from pfizer. it is confirmed a possible offer for astrazeneca. manus cranny is here. what do we know? inthey made the original january. because of the dramatic changes of the landscape within the pharma industry, they came back to the table within this month, just last week. pfizer is saying that they 46 pounds is what they originally offered. as you said, they have until little bit later in may to make up their mind -- may 26, i

think. pfizer is line is saying a deal like this would be accretive and would add to the earnings. they are beginning to build -- well, astra will be building the emerging defense and pfizer will to going for the deal through. >> what is the motivation here? >> that is part of our bloomberg story, these early stage immune drugs for cancer. astra has a strong pipeline in terms of cancer drugs. pfizer, that is what they want to get their hands on. astrazeneca has three drugs at trial stage, which could be worth $1 billion. they have 11 drugs that are in late stage and goal trials. -- clinical trials. 19 drugs are under study. that gives you a sense of what

pfizer is going after. >> give us an idea of the hurdles this deal faces. >> very interesting strategy by pfizer. go public and go now. market andod of the shareholders is about creating value, there is more pressure on astrazeneca. bear in mind, i was reading through some of the copy that astrazeneca has 7000 employees in the united kingdom. we talked about the alstom-ge -- >> yes. what would the richest governments reaction be to something like this? >> what are you off and on about? it is free enterprise, free economy. hello. , bring you back to calf raise a deal that was -- >> it happened. >> thank you. it did go through. it brought out a great deal of

british nationalism. that was chocolate, this is drugs. exports 2% of the u.k. market. >> coming up, seven international observers remain in the custody of progression activists in ukraine. sanctions loom over russia. we will talk to the ukrainian foreign minister next. ♪

>> welcome back. this is "countdown."

>> it is 7:14 in london. the u.s. and the u.n. will impose new sanctions as soon as today on russian individuals. this follows the seizures by pro-russian separatists in ukraine last week. >> we have the eu foreign minister meeting today. they may come up with an expansion of the list of sanctioned individuals. maybe it will come later in the week. sometimes the eu heads of state have to gather to sign off on those things. the u.s. is expected to make an announcement on sanctions today. we have the ukrainian foreign minister on the phone. thank you very much for being with us. i want to start those ofce observers. this group was taken hostage by the separatists over the weekend. ofce negotiators bet with them yesterday. the release of one of the group of 11. why is that and how are the

negotiations going for the release of these observers, which the separatists call spies. >> good morning. do kept the rest of the group that they have adopted last week -- abducted last week. i think the main reason they have -- they are keeping these people is to show that they are andmasters in this plan that anyone who wants to go to this land needs to talk to them. the other thing that they will most likely try to negotiate the release of other separatists kept by the ukrainian police to exchange for these observers. theyt is disgusting what

are planning to do. >> we saw a pro-russian militia, a group of several hundred, seize a police tv station. given all the chaos over the weekend, how confident are you that you are actually going to be able to carry off these residential elections on the 25th of may and if you do go forward with them, will you hold elections in these contested areas, these places held by the separatists question my -- separatists? thehis is the goal of counterterrorist separation in eastern ukraine, to restore order to these reasons -- regions and make people feel safety. to restore order and make people participate in the elections. that is what everyone wants. ofce,e, european union, russia, we all want to hold the

election for president. to do so, we need to restore order. we are committed to fill the elections on the 25th of may and we will do everything possible to make possibility to the people in eastern ukraine to participate in these elections. >> there was talk that there would be negotiations in vienna today. a day that was discussed. are those talks going to go forward today? >> we are going to discuss the implementation of the vienna document that allow the international terrorists to monitor the military drills that near thew has started ukrainian borders. but russia did not want to comply with the documents.

what they received on saturday was not enough, no details of what they were planning to do. or end on the beginning of the exercise. this is the reason why we asked to hold consultations in vienna on those documents. ent toe russians' commitm this document. >> another set of talks will begin in london on returning some of the money that may have left the company under the -- the country under the previous government of ukraine illegally. what is the goal of those talks? can you give us more specific information about what negotiators that will be here in london are hoping to do? >> i think it is better to wait for one more day.

goal of thise main initiative is to discuss the assets, this -- these which were illegally taken from ukraine under the previous government, can be returned back to ukraine. it is quite a big number. much foryou very giving us your time this morning. , as tensions in ukraine continue to escalate, prospects for additional sanctions against russia loom. ♪

>> welcome back to "countdown." is 7:23.me in london the situation in ukraine is intensifying. the u.n. and the u.s. could impose new sanctions as early as today. how is this playing out in the minds of investors? joining us is michael o'sullivan. how is it playing out in your mind? todayhink the next step will be a slight ratcheting up of sanctions from the u.s.-european side, adding to the list of individuals to face sanctions. so far, the tempo and the pace of this crisis is being set by the pro-russian side.

what will their response be to sanctions? will it be something involving gazprom, complaining about unpaid bills? you might see an agitation of some of the other eastern european states. i think that would be a big escalation. i continue to believe that it is not in russia's interest to formally have troops in ukraine and to have a military conflict with ukraine. it would be, i think, a mini and wouldn for russia plunge them so much deeper into a geopolitical crisis. i think their strategy is to continue to undermine ukraine. corrects what do you think it will be for the international investment community? that this issue featured more prominently in their minds? you were pointing out the

volatility was low in the third quarter. -- in the first quarter. >> we have discussed this in the past. there is a groundhog day or you a fiscal crises, be it crisis in washington, europe, or a geopolitical crisis. , cash comeseasures back into the market. we have been a good year and a half now without a volatility event. and on setting that most of the major indices, given the things that are happening macro-wise politically, have not really budge. indices up a little bit more. we are at the margins where we are beginning to see some risky positioning coming off. some of our hedge fund positioning indicators show the hedge fund community selling the tech stocks down quite hard.

what has been interesting is , coupled with availability on the -- with the volatility on the dax, has been a big part of the story. , you may seepen some profit taking. >> stay there. we will come back to you after our short break. ceo at o'sullivan, credit suisse private banking. >> pfizer has confirmed its interest in a 58.8 billion pounds acquisition of astrazeneca. at least that is what it is worth in the market right now. we will see what pfizer will have to pay if they managed to get their hands on this business. more on the industry when we return. ♪

. .

>> welcome back. i am anna edwards. let's get right to jonathan ferro for the fx check. >> let's have a look at euro-dollar over the last couple of months. if you look at it on the month, pretty much dead flat. this week is a pretty big week. tomorrow we get german inflation. we are looking for euro zone inflation to come back towards 0.8%. still way below target. in the ecb's words, for asset purchases to take place the inflation outlook would need to worsen. listening to mario draghi and

reading his speech, the best case scenario is pretty much unchanged. inflation will stay low and cut act towards target. that is their base case. they are going to remain unchanged on the policy side of things. stay where he on the euro. >> i am mark barton in london. these are the bloomberg top headlines. to agreeats will meet on the names of more russians to be targeted in the broadening of sanctions over moscow's actions in ukraine. yesterday, pro-russian separatists freed a foreign observer in ukraine. seven others are being held. minister tonyme abbott says it is possible a missing malaysia airlines jet will never be recovered. searches for the plane have been canceled with authorities pointing to a new underwater operation. president obama has just arrived in the philippines. he will be in manila for a state visit.

the u.s. and philippines have reached a 10 year pact that would allow a larger american military presence in the southeast asian nation. >> back with us now, michael o'sullivan. thank you very much for sticking with us. let's talk about some of the m&a activity and whether that is featuring on your radar. theyou exposed to any of drug companies at the center of all this takeover talk? >> very much so. we have seven top ideas for the year ahead. one of those is copper cash. at three biotech companies, some of the mining companies. think that the pace of

this is beginning to pick up. you are seeing some of the big companies. we had novartis a week or so ago looking to use some of the cash pile they have beyond their jurisdiction. trying to clean up the balance sheet. focus degree of strategic coming into some of the big multinationals. >> is that what the motivation is here, using cash piles in a tax efficient manner rather than trying to put together deals that make sense strategically? >> particular for the u.s. certainly inat is the back of the mind of the management. if you look at proposed deals like ge-houston -- ge-alstom, you can see the industry structure story coming through. >> there were some big macroeconomic events this week. the fed meets, the boj meets, u.s. jobs, u.k. gdp.

out of those, where does the biggest risk lie? >> probably thursday. when you haven't mentioned was chinese pmi. i am much more relaxed about u.s. pmi and jobs numbers. i hope the jobs numbers will go through the 200,000 mark. the fed meeting i think we'll pass off with another slice of tapering. tapering is taking the speed out of the market. that is why rk levels have been kind of flat whereas last year they were rising more steadily. i think we are not going to get a positive surprise. >> an increase in euro zone cpi, does that allow mario draghi and his colleagues further room to hold off on implementing further policy measures? >> i think he is in a bind. qe, need a an act

data crisis. they need probably weaker inflation to do qe. if there is a stabilization in inflation, it will give them the couple of months that they need to prepare qe. i think qe in europe will come towards the end of this year. >> michael, thank you very much. >> just had some breaking news from pfizer camper earning -- confirming it is interested in the astrazeneca takeover. a successful deal would be one of the biggest in the industry. joins us for more. good to see you. we chatted last week about the pfizer-astrazeneca informal talks that took place. we now know they ended on the 14th of january but they have begun again. they began only a few days ago. is pfizer coming from a position of weakening here? >> yes, definitely. very keen on three major

issues. said to17, pfizer is lose over 20% of its sales due to patent expiry's. think the pipeline is one of the weakest in the industry. only a couple of weeks ago, they suffered a blow to their biggest pipeline drug. my esteemed colleague here just mentioned, they have a lot of return earnings here in europe that they do not want to get back into the u.s.. we have a very keen buyer. >> will we have a keen u.k. government? regulation is at the center of many of these mma stories that we are talking about. the u.k. doesn't have a history of standing in the way of money coming into the country to buy out companies. what about a deal of this size?

>> definitely a mind blowing figure. i think the bigger problem is i don't think we will have a cell over. the new ceo of astrazeneca has done a great job in reshaping this company that was hit with major patent expiry's. up a very nice pipeline so it would make sense on his part to wait two or three years for the pipeline to mature before he sells the company. i think we have a very keen buyer. i don't know if we have a seller. investors --we as it is difficult as investors to take advantage of potential deals. own a lot of these drugmakers. up all the pushed industry because of this m&a

frenzy? is it too late to start buying companies on a speculative basis. >> i think it is like a game of musical chairs. you see these m&a come in waves. they havecompanies, their eyes set on a couple names. they could be very strategic through the business. once these companies start being bought out, they are fearful they will have nothing left to buy. seeuldn't surprise to pfizer and astra. everybody is kind of shaking. they will have nothing left to buy. once you see this tidal wave of m&a start rising, you need to of other names that might get bought out. then you can pull out of that position. >> i was interested to read in your notes that there are drug

companies that don't actually do a lot of r&d. for them, buying other businesses is really how they bolster their portfolios. >> there are three main uspanies, valiant, act have and another, their model is built on very short-term accretion making purchases. then they tear the company apart. if you take valiant for example, they have under 2% expenditure in r&d. in order to grow, they don't need to buy. they have to buy. bids.mes it is forced >> so we could expect some of these bidders to come back for more? the have said they rejected mylar proposal, something we barely mentioned is worth billions of dollars. it pales in significance

compared to the size of a pfizer bid for a present for but we could see more -- for astrazeneca. >> they're going to come back this year with a vengeance. they are going to -- >> the deals in the last decade were punctuated by another deal in 2004. pfizer and astra would be a megadeal. we shouldn't write off the megadeal even though we saw a unique type of deal structuring last week with novartis. years almostt 3, 4 all of the ceos of the major companies spoke against megadeals. here comes pfizer with a bid for a megadeal. --hink it is the you need the unique weakness of pfizer. >> great to speak to you this

morning, thank you very much for coming in. mix between, a rare a zebra and a donkey makes its debut at a zoo in mexico. it is not a joke. ♪

>> it is time for "hotshots," a look at some of the most compelling images of the day. thousands of people visited the tombs of pope john paul ii and pope john xxiii following the historic and another nation in which they were proclaimed saints. pilgrims fromcted all over the world. the vatican estimated that 800,000 people came to the event in rome. a rare cross between a zebra and a donkey better known as a zonkey was born at a zoo in mexico. born in april. its mother is a female zebra. the father is a dwarf blue-eyed albino donkey. are rare in zonkeys

the animal world because the chromosomes aren't compatible. dancing may have started in clubs but since the 1990's they have become an all ages exercise. over 150 pole dancers from around the world competed in the annual poll world cup in rio de janeiro. the competition is open to women and men. countriess from 36 climbed and did splits on the polls during the competition. said it isetitor something for the future. welcome back. i am mark barton and i am still trying to get my head around a zonkey. >> i didn't know such a thing exists. thank you. let's take a look at some of today's top corporate stories. plenty of m&a to talk about but there are other stories out there. caroline hyde is here with a change at the top of bg group.

>> shares could fall 3% to 5%. the chief executive officer, only there since the start of 2013 is leaving for personal reasons. he used to be an executive over at royal. it is the u.k.'s third-biggest oil and gas producer here. whenever there is a change up the top, people get concerned. there is uncertainty. chairman andrew gold will be looking after the role of chief executive and trying to find a permanent successor. -- we don't go with know what the personal reasons are. >> thank you. we will keep an eye on that one. plenty more to discuss. merger monday continues with breaking news from pfizer. it is confirmed eight also ball offer for astrazeneca. we are joined now by manus cranny. $100 billion?

ka-ching.ng the valuation, let's get this right. astra stock closed at just over 40 pounds on friday night. we know that pfizer had a discussion back in january. they are coming back to the table. the original offer was 46 pounds. give or take a couple billion, that will be 198 point something. i like what your last guest had to say. we have a keen buyer in the form of pfizer. keen sellera very in the form of astrazeneca. who better to answer that question than the man that shook his head? >> a senior pharmaceutical analyst, high, stand. is that right? a keen buyer acting out of weakness but maybe not so much of a keen seller?

>> what we have to consider is that this is a company that has had a management change just over a year ago. it is always tough for management to take these kind of steps so quickly. >> they have got their own plan, their own direction. if pfizer has deep pockets and really doesn't want to return its european cash pile to the u.s., they have got to find something to spend it on. >> i think one of the things to think about is that astrazeneca's new management have been able to convince some shareholders with regards to the value they are working on creating. share price has done reasonably well. >> if we look at astrazeneca and the proposed deal at 46 pounds, all the action that we have seen in the past couple of weeks, is this a very overvalued m&a activity? are the premiums substantial?

the mining merger and neck was asian frenzy that we had, are these deals overvalued? >> if you look at simple multiples, they do look pretty high. last week we were talking about novartis. here, what you have got to consider and i think the same thing applies to the novartis isl, is what the potential in the pipeline. if you look at astrazeneca, it has no earnings growth expected based on consensus. for any of the three year periods, you want to start theing at, that is where interesting aspect is. it is after 2017 that actually a lot of the pipeline is supposed to be kicking in. must be looking at, what novartis was looking at is the potential for these, for the pipeline to drive revenue. >> if you are a an investor you

are weighing a bird in my hand against something that is a little bit less certain and further into the future. >> if we look at the valuation right now, let's say 47 pounds, at 19 ort astrazeneca thereabouts. ofyou look at the spread valuations in the pharmaceutical sector, that is a premium to the median but it is not the biggest multiple. bristol-myers walks away with that. it would rank fourth or fifth. it is not necessarily a ridiculous number. still the course value. that is what i think they said they had negotiated in january. i saw some headlines saying the pfizer ceo -- >> they could make an offer for less than 47.

we could talk about this forever. thank you both. >> coming up, why you should be watching bp ahead of that company's earnings tomorrow. we will have that story and plenty more for you to watch when we come back after a short break. ♪

>> welcome back. this is "countdown."

>> six minutes or so to go until the start of european equity trading. let's look at some of the stocks to watch. we are joined by joshua. so much to talk about. where do you want to start, drugs, capital goods, earnings coming up this week that are picking your interest. >> it is a hugely in terms of data. we have gdp figures in the u.k. and u.s. new line now we have nowpfizer and astra to -- we have got pfizer and astrazeneca. confirmedas been about the interest from pfizer. they are going hostile. 46-61 was the original offer. they are charging a higher premium to astrazeneca shareholders. that is going to be one to watch for the week. >> joshua, i already asked one guest, what is the big event of the week? you have thrown some out there.

u.k. gdp, u.s. gdp, the fed meeting, nonfarm payrolls, and he said there is one you haven't mentioned. china. it is a massive week. what is the key piece of data? >> depends on where you are investing. if you are in mining, china for sure. the momentum stocks are taking a big interest over the last week or so. on wednesday. out that stock has come off quite a lot. it is trading around average. the next buyer is going to be taking a keen interest. for me, the big figure is payrolls. we are in the mode where tapering is continuing and people need to validate whether that is the right thing to do or not. payrolls, because we are going away from a bank holiday weekend, it should be fairly choppy. i think payrolls are going to be the key thing to watch. >> joshua, thank you so much. "on the move" is next.

they will continue to watch the conversation around the pharma sector, focusing on astrazeneca. alstom also. >> big day, big week as joshua was telling us. see you nice and early tomorrow. ♪

>> welcome to on the move there it i'm francine lacqua at our european headquarters here in london. has everythingm covered from companies to currencies. our international correspondent hans nichols also joins us. , of course, at the russian index. as far as the u.k., french

and german futures, we're going to get another list. fire or al s stom, the beats of these equity markets are going to -- >> we have a lot of m&a.and they -- a lot of >> we are expecting those sanctions to be announced at a minimum by the united states. we have president obama speaking in about an hours time. we do expect some sort of sanctions against russia to be announced today by the united states, and perhaps later in the week by the european union. the deputy foreign ministers are meeting today. russian stock market opens, unsurprisingly, down this morning. maybe that will have an

impact on the decision, of course, for the ukraine. there could be one of the biggest pharmaceutical deals act on. >> it could indeed be. pfizer astrazeneca. goingndscape of what is on has provoked them to reengage .ith astra , they hope to1 consummate that deal. a lovely line. we have a keen buyer, but do we their keen seller? earnings comes in 2017. you decide whether you take the offer today from pfizer or do you wait? institutional

shareholders wait? >> we will be watching very closely. your following ge's bid for all stom. >> siemens emerged today. they have to sell the french president francois hollande how this is good for french industry and french jobs. >> thank you so much, hans. what else are we watching today? >> as far as today is concerned, i think it will be these deals and how they shape up. how will these meetings: france? i think there are some very important moments. i will not bore you to death with payrolls. and the.k. we have gdp u.s. also have gdp numbers. russian neck or these have been

moved by morgan stanley. they go to an equal way position from an overweight position. 50% of the earnings of the stocks in that particular index may come under pressure as the the sanctions comes into play. let's see what is moving in the you're going to see these drugs companies begin to dominate the agenda. as far as the companies on the move, these are the three that are in focus. have a whole new feature here. guess which stock is moving. let's have a look. bayer is up 3.8%. percent isne siemens.

would siemens stretch their balance sheet? we have been told by the financial prudence, do they really want to come and get involved? we will see how that actually opens on the day. let's freshen up the stocks industry for you. we seem to have a little bit of a -- let's have a quick look at some of the currencies in terms of the euro. there we go. we are seeing a little bit of movement on the day. key is going to be the decision-making block for the european central bank is the speculation about qe. $1.39 on the euro dollar.

>> joining us now for more perspective on today's big ofket teams is the director asset allocation at fidelity investments international. trevor, great to have you on the program. landscape,k at the it seems that markets may be a little bit too cool third we're looking at increased sanctions in russia. how hard do think they will be and how hard do you think they will hit the markets? index int the dax germany, it has been moving around in the 10% ranges. we think that volatility could continue. is concerned for equities is leading indicators are soft at the moment. the housing data in the u.s. was weaker before the numbers hit. in particularmy is going to a new level. that is not with us yet. the big picture is, the u.s. is recovering, china is slowing down. that combination is good for

global equities and it is a challenge for commodities in emerging markets. >> as you say, we had a little bit of a mixed bag in terms of economic indicators out of the u.s.. > numberseight strong because there is a real recovery going on in housing. or we need extra stimulus. it is not necessarily from the fed. obviously, the ecb is mulling doing something additional. i don't think they will do anything big because they are saving their powder for another crisis. the japanese need to do something extra because of the sales tax hike, which i think was a mistake. over the summer it feels like all the extra stimulus, when we guess it, it will be time to reestablish for large equity over weights. >> astrazeneca opening at more

than 15.5%. does this give more confidence among ceos? does this lead the way to higher valuations? is it just too risky? >> i think it is a sign that the market is up the very valuations are beginning to pick up a little bit heard this is quite normal. the stage of the cycle we're in it is what i called this inflationary recovery. there isn't any big inflation threat anywhere very it all the big western central banks are talking about inflation being too low. unit in the u.k. it is below target area at the same time you have this recovery going on. post a 20% return. therefore, you get m&a. i don't think it is a problem. a stock and say this has been valuation and is going to be a takeover target in the next few years. i want to be in there.

besides me else could do that for you. >> it is risky. trevor, thank you so much for now. this is what else is coming up in "on the move." we talk about astra and ge.

>> welcome back. i'm francine lacqua here in london. this is "on the move."

this is certainly a stock that is on the move. astrazeneca gaining 15%. this morning, pfizer confirmed that it approached the company in january with nearly 100 billion dollars. this should make it one of the biggest takeovers in the pharma sector. the talks have ended, but there are still speculation that this may come back at any moment. for more on the story, let's get back to our markets editor manus cranny. what do we know so far? >> pfizer are back at the front door of astrazeneca. the price they originally discussed, 46 pounds. just shy of $100 billion. if pfizer do make an offer, they have until the 26th of may according to the rules and toulations of this country do so. they would be chasing after the early stage cancer type line that astrazeneca holds.

the immune system drugs they have for cancer area and put the two together and you're talking about one of the biggest companies by revenue. 20% of pfizer sales are going to go off patent by 2017. they need a new pipeline, that is what astrazeneca offer them. just to give you a sense, astra has three dogs with the ilion dollars coming online in terms of trial. 11 new drugs in late stage in studies. what hurdles to the face? it could be such a huge company that they may have to sell off parts. >> that is one possibility. francine, there is one argument out there some of that astrazeneca constitutes two percent of the united kingdom's exports. i think it could definitely raise some issues in regards to the u.k. regulators.

7000 employees here in this country. is it a deal that the u.k. would want to see go through, taking you back to some of the memories deal, whenolate kraft. 's was sold to cra for more, we're joined by our europe editor david tweed who is in berlin. bayer's first order earnings looking better than expected very it >> the stock is up about four percent. is $112 billion, more than astrazeneca. this is the biggest pharmaceuticals company in europe. one of the reasons it might be moving as well is this m&a

potential that is going on. they're looking at the plastics unit. this is according to people familiar with the talks. there've not done a lot in terms of m&a. they're actually looking to sell this plastics unit which hasn't been actually making as much as its cost of capital. we do see in the earnings that came out today that they did say that the earnings for the materials unit did substantially increase, up about 80% versus a quarter a year ago. they are improving, francine. >> david, isn't they are also interested in buying merck's over-the-counter medicines? bayer also interested in merck's over-the-counter medicines? were talking about things like suntan lotions,

coppertone, which you probably know. bayer is one of the potential buyers of this unit, in fact people who are familiar with the there willthat ben kaise would be fewer antitrust concerns. this is another pharma merger speculation thing that we're looking at, francine. >> achy so much, david tweed, with the very latest on -- thank you so much, david tweed, with the very latest on pharma. trevor, we talked a little bit about m&a when the interview first started. worldwide, equities do you prefer for example japan?

>> yes, our favorite sector is health care. that is part of the m&a story. now, where going on thewas blood pressure in 80's. like the u.s. because there is a us-led recovery going on. we like japan, but we think you need to do something extra. inflation in japan is now three percent. >> japan is still a great financial experiment. we would've expected it to be more certain a year ago. >> maybe. is a huge financial experiment. i think they're doing the right thing, because he had a debt deflation trap. they're using government money and central bank money to get growth inflation going. there are other measures in place as well. they're not fully offsetting it.

japanese consumers have shown themselves very sensitive to higher inflation. in japan they will need to do something. at the moment everyone is sounding quite complacent. my concern is that the market needs to shock the policy makers into action. we think it will happen because -- they will do something to fiscal monetary policy. >> it is interesting that you think the markets need to put on pressure. fray quickly, you like health care because it is more to do with the revaluation of stocks instead of the m&a. it is at the same for media and telecoms? there's a clear valuation problem for a lot of these media stocks, or lisa telecoms, which are cheaply undervalued areas >> specifically we like the pipeline. we think it should be rated. we look at what happened to ratings in the 80's.

this is why m&a is focusing mostly on health care. it is quitehere -- a defensive sector. we are optimistic about the likes of consumer discretionary technology. has two days to decide between general electric and siemens. our international correspondent is in berlin to break down alstom's choice. he will have to say, had i know you would be this upset, perhaps i would have informed you earlier. this is his challenge, because when he looks at the energy industry, we look at some 70% of their revenues in the energy

sector. some 27% in the transportation business. that could be spun off. you could have that as a separate unit. here's what siemens wants to do. want to take the transportation business and say, ok, this is your strength. of thetake over some energy business. when you look at revenue by sector, and of course globally, globally using the strength in europe, some 40%. that would provide a foothold for ge in the european market where they clearly want to make a play and go after their archrival, siemens. --ters with they are saying here's what they're saying privately. they are prepared to make guarantees on that. they want to make france the leader of the rail industry, of transport, to have this industrial company rooted in france. finally, they're willing to match or exceed any offer on the

table. francine, this is just an expression of intent. this is not a formal offer. ge is weeks ahead. they have done their due diligence. they have until wednesday to decide. shares open again on wednesday morning. can the french government actually block this deal? >> it depends what they declared to be in their strategic interest. in the german press this morning there's quite a bit of crowing, because 10 years ago siemens made a similar bid. if they declare this to be in the strategic national interest of france, they have great latitude to block this deal. even though they aren't a shareholder. >> hans nichols. how important is it that the french aren't seen as protectionists in this? or has the government intervened too much?

france is one of the biggest unknowns in europe. this, you could almost argue, is a big test to see whether france is open for business or not. >> there are many test for france at the moment. if you look at the euro area, european growth is running maybe 1.5% or two percent. prettys growth is still tepid. if you look for countries that could get drawn in if there is another slow down, france is sitting right there as an economy that isn't really reforming enough very it could be the center of a new wave of attacks by financial markets. they do have to reform. they have a new prime minister in place, and hopefully they would take more action than they have so far. a lot of the reforms are really heavily opposed by their own people. m&a, i know weat look at valuations and reforms,

but with an investor, would you say that they don't want theirans to go in to national train maker. ? >> of course, individual stocks are absolutely crucial. trevor, thank you very much. we will have final thoughts and we will be asking him where the next best bet for the next quarter is. we will be back in a couple of minutes. ♪

>> welcome back. it is a big week for economic data. ferro, what exactly can we expect? >> in a word, and incredibly busy week. eurozone inflation, and u.s. jobs on friday. you can add in u.s. gdp as well. a lot of data to watch. the big one in europe is eurozone inflation. that markets, economists, policymakers have become obsessed with over the last six months. target.till way below the question is being asked whether the -- what the ecb may or may not do.

gave a pretty comprehensive speech last week. he is still looking for this one to move back towards target in the medium term. in that case, the ecb looks like they won't do much more than talk. >> it will be a very busy week. thank you very much, jonathan ferro. trevor, in terms of the market data we are expecting, in terms of the data, which is the one you are most worried about? we mentioned the u.s. and u.k. numbers. >> in the u.k. we will see some very strong gdp numbers. away in thes firing u.k.. the interesting thing is that to overall market tends badly globally with the pound is strong. we're bullish on the pound hurt me like a mid-cap stocks is a play on the strong recovery. it is a big year for politics.

the scottish devolution, and the general election. >> is a big unknown because of the pound. we're back in just a couple of minutes.

>> i'm francine lacqua in your -- in bloomberg's european headquarters in london. let's see how things are shaking up -- are shaping up. this is due to m&a activity. companieslot of drug rallying on the back of a lot of merger activity. of course what is happening with moscow and u.s. equities. let's dig a little deeper into

the stock markets. iskets editor manus cranny at the touch screen with three stocks that we are watching. >> how can you get away from an astrazeneca, the biggest one-day move since 1993. the stock has come back from its initial opening. pfizer indicated it is still interested in a deal. , 60 pounds would be a good value proposition. keep an eye on that. when it comes to generic hasmaceuticals, their offer been rejected, rebuffed. standalone, they say. it is >> good for them. siemens down 2.53%. could they, would they, should they enter the fray and make an stom.native offer for al

the proof of the balance sheet is what seeman says they guard. francine, back to you. >> these are bloomberg top headlines. signednt obama has papers giving the u.s. greater access to bases in the philippines. this is to promote regional stability. the president is in manila now for the last leg of a weeklong asian tour. the hunt for the missing malaysia and jet has entered a new phase as international search team abandoned its aerial search and stepped up efforts to find wreckage of the ocean floor. saysrillion prime minister it is possible that the missing jet never be recovered. will impose new sanctions as early as today on russian individuals and companies. this after pro-russian separatist seized international inspectors in ukraine.

for more on the latest, let's get straight to ryan chilcote. the rhetoric is building up. do they need to leave enough leeway for russia to luckily step out of this, or do they need to go hard on sanctions? >> i think the sense is that they want to do stage to sanctions, which is to expand the list of individuals being sanctioned, maybe a couple of companies, but not go for the tro sanctions just yet. we have eu officials meeting in brussels today. we are expecting an announcement on sanctions from them later in the day. we will hear from president obama and 27 minutes from now. we're going to hear about sanctions from u.s. treasury officials later in the day. in any case, we really expect them to be coming. have a listen. >> we will be looking to designate people who are in his inner circle, however a significant impact on the russian economy. we will be looking to designate companies that they and other inner circle people control.

we will be looking at taking steps as well with regard to high-technology exports to their defense industry. all of this together is going to have an impact very >> we are in no order bit about what the u.s. and europeans might announce. the deputy foreign minister of germany has said he expects the eu to impose sanctions on 15 more individuals. treasury officials we have spoken with tell us they expect rosnev.tion the ceo of interesting to watch that. this would not be the company itself being sanctioned, it would just as ceo. we have seen that before. we have also seen russian banks to be sanctioned, gazprom bank.o the actual interesting thing

will be to see the names. these are was the biggest loser on the dow jones industrial average. says het vladimir putin expects visa and mastercard to lose market share in russia. tosia is really important the likes of visa and mastercard. that will be another interesting thing to watch. >> implications will be huge because we have such big spenders coming from russia. talk to us a little bit. do have updates on the kidnappings from the observers of their donation for security and cooperation? look, 10 of the osce observers are still being held. there were 11 being held, one was being released jerseys exit for and you can as bartering chips to get back to of the pro-russian ukrainian fighters by the forcesed of the central government of ukraine. the osceatists called

observers spies. in any case is massively important there are germans in the group, many others. it is possible they will be released. plenty of other events going on the ground in eastern ukraine, pro-russia militants seized a sexy -- a tv station over the weekend. they're going to try and retake all of eastern ukraine back in time for that may 25 presidential elections of they can hold elections there as well. >> ryan, thank you so much for the update varied ryan will be a top of the stories and will bring any breaking news in terms of sanctions. let's keep the conversation on russia going. christophery weaver. let's start from the premise, do you believe that vladimir putin has had the upper hand, that we have impose sanctions and he is been ignoring them? do think the sanctions need to be that much stronger, or as ryan has been saying, it is going to be a phase two?

>> we definitely expect a phase two. the europeans certainly suggest there will be toughening of the sanctions, but avoiding moving sections thatral hugely disrupt the russian economy. it will be more of a salami sliced race rather than more aggressive. you can't really say to president putin that russia has the upper hand. we haven't had a collapse or a catastrophe in the economy, but the whole issue with ukraine is clearly waiting on investment flow. we have seen a lot of self sanctioning from companies delaying investment into russia. while the economy is still growing at 0.8%, which is bad, the longer-term damage it is yet of delayedin terms investment and what that might do to longer-term growth.

>> vladimir putin is gaining in popularity. he had a pretty lousy economy to deal with from the start. it seems that this is often an excuse to get his points out very is really care that much about the economy? >> i think the evidence is that they do care about the economy. the government's central bank has acted very quickly. we saw that on the third of march when this issue really escalated. they moved quickly to defend the currency, raising interest rates. when the s&p cut the rating to central bank, they also raise rates to defend the currency. they're very sensitive to the economic impact. also, remember that on the ground in terms of the russian population, the economy has not been that bad. the headline numbers, which are heavily dominated either state enterprises, has been lackluster. if you strip out the state companies, you strip out there every, which is dominant.

there has been real wage growth in russia for the last 12 years. unemployment is just a little over five percent. if you are an ordinary russian on the streets, you haven't been feeling this kind of poor headline numbers the rest of us have been looking at. despite thenk popularity that you referred to last month, it is understandable what happened with crimea. i think everybody in government understands that that popularity spike to be very short-lived if there is a real impact on the economy. we are not seeing that yet, but that has got to be a threat coming down the road. >> christopher, great to have you. founding partner at macro advisory. battle rooms. .e part pairs we will stack up the potential deals next.

>> welcome back to "on the move." i'm francine lacqua here in london. the industrial giant is said to have intervened. ge was considering making alstom its largest investment ever.

now ge is trying to prevent the move. reporter macs candle originally broke the story. now we understand that siemens is also trying to negotiate. afford to let ly go. m very outspoken industry minister making his views known that he would rather see a deal m and siemens that would create a european champion in rail. it is a complex asset swap.

ge thinks they have the better offer and that deal is much more advanced than the siemens proposal which came in over the weekend in very broad outlines. there is a government story here as well as a business story we will have to see which one wins out. >> is would be an old school takeover if the french government did not get involved. comments from the labor minister. are you concerned that once again the protectionist france that we have seen in the past will get in the way of a strategic alliance or a full takeover? >> the initial reports of the full takeover, i think it does appear that the hours that followed, that really wasn't in the cards. it seemed as if the original ge take on was actually a the power assets and that somehow it would be an in transport.

i don't think you're are talking about a full takeover. i think perhaps what has been a little bit surprising -- everyone thought it would be a political transaction, no doubt, but perhaps the extent to how political has been a surprise. alstom tos sense for sell a lot of the assets. >> i think there's some truth in what you just said. industry is quite a difficult industry in europe at the moment. clearly, government stands under certain amount of pressure. i think there is quite a strong argument to some kind of consolidation in the european transport area. i think what ge was thinking of doing, i think this is a pretty

good compromise. ge would get all of the assets that they want. it is become increasingly apparent that they didn't feel that transport was quite an important asset for them. they thought this would be quite a good compromise where you could actually still keep a european set of assets together. i think it makes a certain amount of sense. we also just understand that the siemens management is also going to of paris today to meet with francois hollande. is clearo that preference is to have a european company? >> the government has made it pretty clear that they would stom to strongly consider this bit from siemens. short of outright endorsing it, they're making it very obvious they don't like this ge bid. the minister was taking to twitter this morning saying that the ge bid was unacceptable for

the french government. siemens transaction were talking about his efforts were. m'sically, they take alsto energy business which is large. siemens would become the airbus of trains. they see airbus is being a real european success story. that is sort of the goal. again, this is not an advanced proposal. the steel from siemens has been in the background for a while, but it is not a binding offer. this is not something that is a product of months of negotiation , as the ge transaction was. the devil will be in the details. om it is a little less attractive. >> how desperate are they to get ssets? ands on these a

>> i don't think desperate is the right word. the deal is very much the shape of what we have talked about. siemens ring able to it the transport business is something they have always wanted to do. in many ways, i think the way this is actually played out, there's a situation here where isn't really the competitive some kindoing to be of asset purchase. not looks as though the french government is not so keen on ge. from the siemens perspective, they are in the driver seat. if they didn't want to be generous on price, there could be a reasonably good deal here for

siemens shareholders. it will probably be wednesday at the earliest before we find out. >> i love the stories. it is a great story. i would love to be a fly on the hollande'sncois desks today. today. i'm joined by my coanchor guy johnson. we have of course of sanctions on russia and a lot of m&a out there. >> yes, to say the least. we have a lot to going on in the farmer sector. we will keep you up to speed with all the latest developments. cover the twists and turns coming on down the road. the president is talking in manila. maybe get an update on the when hen in ukraine

moves onto the q&a. we will wait and watch and see what president obama has to say about that. we are expect in some finance meetings in europe as well. that is taking place a little bit later on. macro news coming today, as well. we will be talking to a ukrainian businessman. here's a guy who's tried to get ukraine's tech industry up and running again. he is try to push it pretty hard at the moment. he sees this as being one of the solutions the country faces. clearly we have to deal with the russians before we can get to the stage. obviously in big trouble right now. how do you keep talented said the country and stop it going elsewhere? we will touch on that. finally, we will carry on talking about tech. did reallympany that well. microsoft failed to take advantage of the apple ecosystem . it started to change that, now.

microsoft is making offers is makingfor ipads -- office available for ipads. what is happening in terms of wider trends, american -- wearables. we will get his take on all of that. a lot of ground to cover. it is going to be a busy show, i think. you can't miss a minute. back to you. >> guy johnson, i'm looking forward to it. in the meantime, here are some companies on the move. some flaws have been found in microsoft's internet explorer. the vulnerability allows cyber criminals to impersonate a website to steal user data. the flaw had artie been used in limited targeted attacks against people using internet explorer 6-11. s

the two companies said they will combine by the first half of 2015. the deal would be one of the largest takeovers and the industry's history. pfizer confirms that it is proposed buying the london-based drugmaker. gainzeneca is the biggest on the stoxx 600 this morning. we leave you with these live pictures of president obama speaking in manila as their meeting with the philippine president aquino. we go live to manila if we hear biggerg about possible and higher sanctions on russia.

>> welcome back to "on the move." president obama has been speaking in manila. the q&a section has started. we're waiting to see whether he will field questions on the expected additions to sanctions on russia. we are expecting a second stage of sanctions, especially targeting individuals and banks. are preparing for possible sanctions.

also, individuals, we're being told but treasury officials, the expanded list of individuals that might be sanctioned from putin's inner circle. as you said, president obama has yet to make any comments about ukraine. we will obviously be monitoring for those comments. how this has worked in the past is that when they are repairing sanctions, we will get a list. the us is pretty transparent about that very it we will clearly get it from the treasury rather than the u.s. president. >> we will have to monitor president obama does say anything. last friday he talking about sanctions. he wants them to be strong, but also give russia the chance to turn it around. >> keep some of their powder dry, which is why we expect stage three sanctions, sectoral

sanctions, the really broad-based sanctions that could cause a lot of trouble for the russian economy, to be kept in reserve. >> ryan chilcote with the latest on sanctions. we are expecting sanctions, the question is how much they will be. pulse,"ed for "the which will be next. ♪ . .

pha frenzy. astrazeneca sayersrma -- shares soar as pfizer says it is still interested in a deal. >> ge arrives in paris to defend their offer for alstom. a tougher line. the west is getting set to impose new penalties on putin's inner circle. good morning, everybody. you are watching "the pulse." wer