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Companies used to fear that activist investors would pressure them to sell. Now they fear activist pressure to not buy.

Driving the news: Bill Ackman is urging United Technologies to scrap its mega-merger with Raytheon.

  • Ackman's Pershing Square Capital has less than a 1% stake in UTX, valued at around $745 million. Twenty-two other outside investors hold larger positions.
  • But he has one of Wall Street's loudest megaphones, and is threatening to publicly oppose the deal, per a memo obtained by The Wall Street Journal.

More from the memo:

It "makes no sense to us why you would consider a stock acquisition using today's massively undervalued UTC common stock to buy a large business of inferior quality to the company's existing businesses, and for which we cannot comprehend the strategic logic."

Carl Icahn is suing Occidental Petroleum, in which he reportedly built a position worth north of $1 billion, over its proposed purchase of Anadarko.

  • Icahn thinks the deal is overpriced, with Occidental succumbing to pricing pressure from earlier Anadarko bidder Chevron. Moreover, he thinks that financing terms given to Warren Buffett were far too generous.
  • He also argues Occidental would be better off selling itself than buying Anadarko, saying the deal's debt-laden math can only work (possibly) if oil prices rise and don't fall for years.
  • But he's not threatening to vote against the deal, as Ackman is with UTX/Raytheon, because Occidental structured its offer in a way that sidesteps the need for a shareholder vote. So add that to the list of things that bother Icahn.

The bottom line: Ackman and Icahn have history as antagonistic rivals. But they often swim in similar strategic directions.

Go deeper: United Technologies, Raytheon reach aero-space mega-merger

Go deeper

2 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Updated 4 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December Black Friday shopping across the U.S., in photosAmazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.