Anheuser-Busch InBev and SABMiller have agreed on terms for a takeover, with the world's largest brewer set to pay £44/share for its smaller rival, valuing the group at £69B ($106B). The deal brings one out of every three beers sold worldwide under a single company, and will benefit SABMiller's (OTCPK:SBMRY) two largest shareholders - Altria (NYSE:MO) and BevCo - which account for 41% of the company. Under terms of the agreement, AB InBev (NYSE:BUD) would pay a $3B reverse break fee to SABMiller should the transaction fail to clear regulatory hurdles or shareholders don't approve of it. SABMiller +9% in London; BUD +2.4% premarket.

Economy

China's trade slump has extended into September, adding more evidence that the world's second largest economy is stalling. Dollar-denominated imports plunged 20.4% Y/Y last month, while exports slipped 3.7%, translating into a trade surplus of $60.34B. In yuan terms, imports fell 17.7%, while exports dropped 1.1%. China's official GDP data is due on October 19.

After erasing last week's big gains through yesterday's 5.3% drop, oil prices now have even less to look forward to: the Iran nuclear deal. Tehran's parliament passed a bill this morning supporting the nuclear accord reached with six world powers, removing a major obstacle to putting the agreement into practice. Should sanctions be lifted, Iran would double its oil exports to 2.3M barrels a day, multiplying tensions in the world's sensitive oil markets. Crude futures -0.5% to $46.86/bbl.

Russia's economy could shrink 3.8% this year on the back of lower oil prices and international sanctions, the country's finance minister told CNBC, outlining that trade restrictions may not even be removed any time soon. "We don't anticipate they'll be lifted next year, though of course we would want it to happen as soon as possible," Anton Siluanov declared. Despite a GDP contraction this year, Siluanov feels the economy is turning a corner and could see positive growth of 0.7% in 2016.

The U.K. inflation rate turned negative again last month, dropping 0.1% Y/Y due to a smaller than usual rise in clothing costs and falling gasoline prices. Although the Consumer Price Index rate has been at or close to zero for most of 2015, the last time it was in negative territory was April. The Bank of England said this past week it did not expect inflation to reach its 1% target until spring 2016. FTSE 100 -0.7% to 6,323.

Germany's economic morale plunged to a one-year low in October, with ZEW's investor confidence index tumbling to 1.9 from 12.1 last month. "The exhaust gas scandal of Volkswagen and the weak growth of emerging markets has dampened economic outlook for Germany," ZEW President Clemens Fuest said in a statement. "However, the performance of the domestic economy is still good and the euro-area economy continues to recover." DAX -1% to 10,016.

Stocks

SAP +6% premarket after reporting a 19% rise in Q3 operating profit (€1.62B), beating the most optimistic analyst estimates. The results show yet another sign the German software maker is managing an industry-wide shift to cloud-computing programs without sacrificing margins. SAP (NYSE:SAP) also said it would stick to its outlook for full year non-IFRS operating profit of €5.6B-€5.9B, representing 0-5% growth from €5.6B in 2014.

Dell's $67B buyout of EMC appears to be a win for nearly everyone involved - except for the data storage company's bondholders, Bloomberg reports. Investors in EMC's (NYSE:EMC) $5.5B of bonds are down about $338M since news of the deal first became public last week. Why's that? Dell's plan to raise about $50B in debt for the acquisition will push existing bondholders down the capital structure (the notes lack protections that would've allowed for early repayment in the event of an ownership change).

The rumors are true: Pepsi (NYSE:PEP) is apparently making an Android phone called the Pepsi P1. "Available in China only, this effort is similar to recent globally licensed Pepsi products which include apparel and accessories," a company spokeswoman confirmed. The P1 will feature a 5.5-inch 1080p screen, 2GB of RAM, a 1.7GHz processor, a 3,000 mAh battery, and a 13-megapixel camera. The price point for the model will also be a key feature - only 1,299 yuan ($205).

Meanwhile, Pepsi is also competing against Coca-Cola (NYSE:KO) for an investment in Chobani that could value the Greek yogurt maker at $3B including debt, Reuters reports. Chobani is looking to sell a minority stake to someone who could help it with distribution and production and is reportedly working with Goldman Sachs (NYSE:GS). The company ran into liquidity issues last year before an investment from private-equity firm TPG.

Nickel prices are in rebound mode after falling to a near seven-year low last week, buoyed by market speculation that Glencore (OTCPK:GLCNF) could slash output following cuts to its copper and zinc production. London Metal Exchange nickel stood at $10,460 a tonne on Tuesday, 15% above the $9,100 it fetched on August 12, its lowest price since December 2008. Glencore, whose shares have been hammered on debt burden worries, declined to comment on the speculation.

Executive Chairman John McFarlane told a meeting of top Barclays (NYSE:BCS) executives last week that he was close to appointing a new CEO, Sky News reports. Among those whispered to have a shot are Morgan Stanley's (NYSE:MS) Colm Kelleher, and former JPMorgan (NYSE:JPM) banker Jes Staley, who was offered the role in 2012. McFarlane, aka "Mack the Knife," led the axing of previous CEO Antony Jenkins last June.

The proposed labor contract between the United Auto Workers union and Fiat Chrysler (NYSE:FCAU) isn't necessarily the same wage deal that will be pressed upon other Detroit automakers, UAW Vice President Jimmy Settles told Ford (NYSE:F) workers. For several years, contract deals struck by Ford, General Motors (NYSE:GM) and Chrysler have largely mirrored one another, but the union's longtime commitment to pattern bargaining seems to be weakening based on diverging finances of the carmakers.

Making some new announcements, Volkswagen (OTCQX:VLKAY) declared it will switch to a new emissions control setup in Europe and North America as well as cut €1B ($1.1B) in annual investment spending. The new system will be installed "as soon as possible," and will use a mixture of the chemical substance urea and water, VW brand head Herbert Diess said in a statement. Yesterday, Standard & Poor's lowered its rating on Volkswagen from A to A- on concerns over the emissions scandal.

Monday's Key Earnings
Infosys (NYSE:INFY) -6.6% after cutting its revenue guidance.

Today's Markets

In Asia, Japan -1.1% to 18235. Hong Kong -0.6% to 22600. China +0.2% to 3293. India -0.2% to 26847.
In Europe, at midday, London -0.8%. Paris -1.3%. Frankfurt -1%.
Futures at 6:20, Dow -0.5%. S&P -0.6%. Nasdaq -0.7%. Crude -0.5% to $46.86. Gold -0.9% to $1154.40.
Ten-year Treasury Yield -4 bps to 2.05%

Today's Economic Calendar

6:00 NFIB Small Business Optimism Index
8:00 Fed's Bullard: U.S. Economy and Monetary Policy
8:55 Redbook Chain Store Sales
2:00 PM Treasury Budget