China has closed manufacturing hubs Shenzen and Changchun in recent days as Covid-19 cases jump, halting local output from companies including Toyota Motor Co. (TM) and Foxconn Technology Group, which assembles Apple Inc. (AAPL) iPhones.
The lockdowns are helping Moderna Inc., (MRNA) whose stock soared yesterday as China puts more than 50 million people in lockdown because of a new outbreak of the omicron variant of the virus. Other COVID-19 vaccine makers are rising as well. The outbreak is hurting the stock of other companies like Alibaba Group Holding (BABA) and other China-based firms.
The entire province of Jilin, home to Changchun, was placed in lockdown late last week. Hon Hai Precision Industry Co., known as Foxconn, said it was halting operations in Shenzen.
Toyota said today it's closing its Changchun plant, Nikkei Asia reported. It had already shut down a joint venture in Tianjin in January.
Stock of the Day: Turquoise Hill (TRQ)
Shares of Canadian mining company Turquoise Hill Resources Ltd. (TRQ) rose yesterday after Anglo-Australian miner Rio Tinto Plc (RIO) offered to buy approximately 49% of the company it doesn’t already own.
Rio Tinto bid $2.7 billion for the stake, or $26.64 per share in the all-cash deal. That’s a 32% premium to Turquoise Hill Resources' closing price Friday of $20.13.
Rio Tinto said the motivation for the move was the recent agreement reached between the two companies and the government of Mongolia to move forward with the Oyu Tolgoi copper mining project. The company noted when completed, Oyu Tolgoi would be the fourth-largest copper mine in the world.
CEO Jakob Stausholm added a complete merger with Turquoise Hill Resources would expedite the work on the mine by offering a simpler and more efficient ownership and governance structure.
Special Committee to Review Offer
Turquoise Hill Resources acknowledged receipt of the offer, and explained the board would be creating a special committee of independent directors to review and consider it.
Turquoise Hill Resources shares are gaining 32%, and are up 670% from their all-time low set during the beginning of the COVID-19 outbreak in March 2020. Rio Tinto shares are down 3%.