2 Stocks That Got Deals Done Monday

Investors have been hoping for a Santa Claus rally, but the stock market hasn't been able to overcome concerns about the prospects for the economy in 2023. As we've seen on numerous occasions in the past, the Nasdaq Composite (^IXIC 1.99%) suffered the biggest declines among major market benchmarks, but the Dow Jones Industrial Average (^DJI 1.18%) and S&P 500 (^GSPC 1.26%) lost ground as well.

Data source: Yahoo! Finance.

Mergers and acquisitions often get announced on Mondays, and a couple of deals attracted the attention of investors. Neither Aerojet Rocketdyne Holdings (AJRD) nor Mondelez International (MDLZ -0.86%) saw major moves in their share prices, but both made strategic moves that have significant implications for their respective businesses.

L3Harris looks to purchase Aerojet

Shares of Aerojet Rocketdyne finished higher by a bit more than 1% on Monday. The company announced on Sunday that it had signed an agreement that will allow defense contractor L3Harris (LHX 0.43%) to acquire it in a deal valued at $4.7 billion.

Under the terms of the deal, L3Harris will pay $58 per share in cash to Aerojet shareholders. The two companies anticipate that the deal will close at some point during 2023, although given the extent of regulatory review and clearances required, they didn't offer any more specific guidance.

The big reason the stock price didn't move very much was that investors had already known that Aerojet was the subject of takeover interest. About three weeks ago, reports surfaced that L3Harris was among several companies looking to acquire the rocket manufacturer, as Aerojet tried to move forward after its plans to sell itself to Lockheed Martin ran into resistance from regulators on antitrust concerns early in 2022.

For L3Harris, the buy marks its second acquisition this year, as it looks to scale up its business to meet the changing needs of the U.S. Department of Defense and other customers. Aerojet sees the deal rewarding its shareholders while also allowing the business to accelerate its innovation efforts. Even though L3Harris stock fell almost 4%, the rocket maker expects great things to come from the business combination.

Mondelez cashes in on its gum business

Meanwhile, shares of global consumer products giant Mondelez International dropped less than 1%. The company announced a deal that will involve scaling back its business to concentrate on what it sees as higher-growth opportunities.

Mondelez entered into an agreement to sell its chewing gum business in the U.S., Canada, and Europe to European confectioner Perfetti Van Melle Group. Under the terms of the deal, Perfetti will pay $1.35 billion in cash to Mondelez in exchange for the assets, which include well-known brands including Trident, Dentyne, and Bubblicious.

For Mondelez, the sale helps the company move forward with its broader strategic plans, which include an emphasis on what it sees as the core elements of its business. That includes various chocolates, cookie products, and baked snacks, in which Mondelez sees better opportunities for growth as a result of increased investment. At the same time, though, the company is retaining its rights to market its gum products in other parts of the world, including the key Chinese consumer market.

In turn, Perfetti will be able to get a big leg up in its efforts to capture market share in key areas of the world. Combining the acquired brands with its Mentos candy and other global products, Perfetti believes it can capitalize on their value even as Mondelez looks to move on.