EUROPEAN OPEN: SU FP to buy PTC for USD 23.7bln; BT/A LN agrees TalkTalk rescue; ISP IM raises BMPS IM offer; AKZA NA sells Southeast Asia paints business for USD 1.4bln; BAYN GY plans USD 2.2bln Ohio site; TSM and INTC discussed as Terafab partners

EUROPEAN OPEN: European equities started the week mixed. Overnight, APAC stocks began the week mostly higher in holiday-thinned conditions, and following Friday’s gains on Wall Street, where stocks were underpinned as Fed rate hike bets were unwound following softer-than-expected US jobs data. EM stocks and FX rose have started the week higher, finding additional support from lower oil prices. Crude futures fell as Saudi Arabia’s deep November price cut to Asian buyers outweighed concerns over intensified fighting in Yemen. Saudi Aramco cut November Arab Light crude prices for Asian buyers to USD 5/bbl below the regional benchmark, the lowest in six years, Bloomberg reports. The discount widened from USD 2/bbl in October as Gulf producers compete for market share and oil flows through Hormuz recover. Europe prices rose USD 3/bbl; US prices were unchanged. OPEC+ agreed to keep November oil production steady amid elevated Middle East security risks, as Gulf output remains well below quotas amid Iran-war export disruptions. Separately, LNG shipments through the Strait of Hormuz continued recovering, with at least three cargoes exiting since late last week, according to ship tracking data. September outbound flows reached their highest level since the Iran conflict began, but remain more than 75% below pre-war levels. Elsewhere, President Trump on Friday said the US will not impose a diesel export ban after G7 nations and partners agreed to release up to 100mln barrels of emergency oil and diesel stocks. Gold was steady near USD 4,140/oz after its biggest weekly drop since June; weak September US payrolls reduced expectations for an October Fed hike, but elevated Treasury yields and a stronger dollar limited bullion’s recovery. Copper rose for a second session after the weak US jobs data; analysts note that prices remain near record levels amid potential supply tightness from US tariff-related shipments, while data centre and renewable energy demand continues to support consumption. In politics, Spanish government and Socialist officials are reportedly preparing for a possible early election after two housing bills were defeated in parliament, Bloomberg reports. Sanchez, whose term runs until July 2027, is due to make a statement around the cash open today. The EUR has fallen to its weakest since May 2025, as political and fiscal concerns intensify; reports of a possible early Spanish election have added to French bond market stress, while hedge fund selling and a stronger USD have also pressured the currency. Morgan Stanley’s Jeff Mueller said that Euro area bond markets are showing first signs of contagion after French, Italian, Belgian and Greek bonds recorded some of their biggest spread moves in years last week. Swaps are pricing three ECB hikes by end of next year, down from a previous four. Analysts at Citi have speculated that the ECB may consider pausing QT if the contagion intensifies. STOCK SPECIFICS: TECH: Schneider Electric (SU FP) agreed to acquire US software services provider PTC Inc. (PTC) for USD 205/shr in cash, implying an EV of USD 23.7bln; the price represents a premium of more than 40% to PTC’s last close. The transaction is expected to complete by Q3 2027. TSMC (TSM) and Intel (INTC) are being discussed as potential partners for Elon Musk’s Terafab ambitions, DigiTimes reports; TSMC is reportedly in talks with Terafab, with suppliers seeing an over 80% chance of a deal. COMMUNICATIONS: BT Group (BT/A LN) has reportedly agreed a rescue of TalkTalk via a pre-pack administration, acquiring its wholesale and consumer businesses, Sky News reports citing sources; BT will pay about GBP 100mln to Ares Management (ARES) and around GBP 60mln to KKR & Co. (KKR). All 900 TalkTalk employees are expected to transfer, while shareholders including founder Sir Charles Dunstone will be wiped out. CONSUMER CYCLICAL: Of note for automakers in the UK, the UK is preparing tariffs on Chinese EVs to retain access to EU Made in Europe local-content rules, The Times reports. Chinese brands including BYD, SAIC Motor’s MG and Chery’s Jaecoo took 23% of UK new-car sales in September, and officials are concerned about possible Chinese retaliation against Jaguar Land Rover. Renault (RNO FP) CEO Francois Provost said the automaker plans to invest more than EUR 10bln in French EV production over the next five years if political and social conditions permit; Provost also said instability in France could significantly affect Renault, which generates 20% of its business and employs 40% of its workforce there. FINANCIALS: Intesa Sanpaolo (ISP IM) raised its takeover offer for Monte Paschi (BMPS IM), adding EUR 800mln in cash if shareholders reject BMPS’s counter-strategy; Intesa now offers EUR 1.25 cash plus 1.6 new Intesa shares per MPS share. Intesa Sanpaolo said its sweetened offer has secured backing from top shareholder Delfin, which will tender its 17.6% stake in Paschi. Intesa could still abandon its EUR 34bln bid if MPS shareholders approve alternative takeover plans on 29th October. Of note for UK financials, City of London executives are concerned the UK government may impose a windfall tax on domestic banks in the Autumn Budget; officials reportedly believe that banks have not done enough to support small businesses, with any additional revenue potentially used to reduce business costs. ENERGY: Eni (ENI IM) and Repsol (REP SM) are considering selling portions of their 50% stakes in Venezuela’s Perla gas field to outside investors to fund development, Bloomberg reports citing sources; the companies aim to more than double production and begin LNG exports by end-2031 from a floating terminal. MATERIALS: Akzo Nobel (AKZA NA) agreed to sell its south-east Asian decorative paints business to Nippon Paint for USD 1.35bln; the deal is expected to close in mid-2027 and is separate from Akzo’s planned merger with Axalta. Air Liquide (AI FP) targets a sales CAGR of 5%, recurring net EPS growth of 10%, recurring ROCE above 11% and margin improvement of 400-600bps under its 2030 strategic plan; it also plans to launch a EUR 4bln share buyback programme over 2027-2028. INDUSTRIALS: India reportedly aims to sign a deal with France for 114 Dassault Aviation (AM FP) Rafale fighters within five months; the agreement is estimated at USD 30-35bln, with price negotiations in their final stages. HEALTHCARE: Bayer (BAYN GY) plans to invest USD 2.2bln in a new pharmaceutical manufacturing site in New Albany, Ohio. The project is expected to create about 600 permanent jobs and 1,500 construction roles. Genmab (GMAB) said Part C of the Phase 1/2 RAINFOL-01 trial showed rinatabart sesutecan achieved a confirmed ORR of 45.9% in 109 patients with platinum-resistant ovarian cancer, including five complete responses; median duration of response was 12.1 months, with 51% of responders still responding at one year. Novo Nordisk (NOVOB DC) said the US FDA’s review of denecimig for haemophilia A in adults and children, with or without inhibitors, remains ongoing; the FDA has not provided a new timeline for regulatory action on the BLA. NOTABLE BROKER UPDATES: Goldman Sachs initiated Burberry (BRBY LN), Brunello Cucinelli (BC IM) and Kering (KER FP) with Neutral ratings; LVMH (MC FP), Richemont (CFR SW) and Moncler (MONC IM) were initiated with Buy ratings; Swatch (UHR SW) was initiated with Sell rating. Brunello Cucinelli (BC IM) upgraded at RBC; Neste (NESTE FH) upgraded at AlphaValue; Evonik (EVK GY) upgraded at Berenberg; Continental (CON GY) upgraded at Morgan Stanley. Societe Generale (GLE FP) downgraded at AlphaValue; Hermes (RMS FP) downgraded at UBS. Kepler initiated Hannover Re (HNR1 GY) with a Hold and Swiss Re (SREN SW) with a Reduce. DAY AHEAD: DATA: In Europe, final Eurozone services PMI is seen at 53.0 (prev. 51.6), German is expected to rise to 52.9 (prev. 49.7), France to 51.4 (prev. 48.0), UK is seen easing to 51.7 (prev. 52.5). Eurozone August PPI (prev. 1.6% M/M; prev. 5.8% Y/Y). In North America, US ISM services PMI headline is seen rising a touch to 55.7 (prev. 55.4) with business activity at 61.5 (prev. 61.7), prices up to 72.9 (prev. 72.6), new orders at 60.3 (prev. 60.9) and employment at 48 (prev. 47.8); S&P Global final services PMI (exp. 58.7, prev. 56.5) and composite (exp. 58.4, prev. 56.0) are also due. CENTRAL BANKS: ECB’s Schnabel participates in a meeting (slides released); Fed’s Goolsbee (2027 voter, neutral) gives an interview to Fox News. WEEK AHEAD: This week’s data highlights include: FOMC and ECB minutes, US ISM Services PMI, Canadian Jobs data. Notable corporates reporting this week include: PepsiCo (PEP), Delta Air Lines (DAL), Constellation Brands (STZ).