The deal announced Monday represents Mayer’s boldest move yet since she left Google 10 months ago to lead Yahoo’s latest comeback attempt. It marks Yahoo’s most expensive acquisition since the Sunnyvale, Calif., company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.

Yahoo is paying all cash for Tumblr, dipping into some of its remaining stash from a $7.6 billion windfall reaped last year from selling about half of its stake in Chinese Internet company Alibaba Holdings Group. Taking over Tumblr will devour about one-fifth of the $5.4 billion in cash that Yahoo had in its accounts at the end of March.

While hailing Tumblr as fount of creativity that attracts 300 million visitors per month, Yahoo pledged “not to screw it up.” David Karp, a high school dropout who started Tumblr six years ago, will remain in control of the service in an effort to retain the same “irreverence, wit and commitment to empower creators,” Yahoo said.

Karp, 26, who may now have a managerial mentor in Mayer, 37. Tumblr, which will remain based in New York, has about 175 employees while Yahoo has 11,300 workers.

Mayer, who worked closely with Google co-founders Larry Page and Sergey Brin, had high praise for Karp in a statement. She described him “as one of the most perceptive, capable entrepreneurs I’ve ever worked with.”

In his statement, Karp predicted Yahoo would help Tumblr grow even faster as he strives “to make the Internet the ultimate creative canvas. “

Tumblr now figures to play a pivotal role in Mayer’s attempt to reshape Yahoo. To take on the challenge, Mayer ended a highly successful 13-year career at Google, which she helped surpass Yahoo as the Internet’s most influential company. Since coming to Yahoo, Mayer has concentrated on improving employee morale, redesigning services and bringing in more engineering talent through a series of small acquisitions that have collectively cost less than $50 million.

Her efforts have been well-received on Wall Street so far, although most of the 69 per cent surge in Yahoo’s stock price under Mayer’s leadership has been driven by the rising value of Yahoo’s remaining 24 per cent in Alibaba. When Alibaba goes public within the next few years, analysts have estimated Yahoo could collect another $10 billion to $20 billion by selling the rest of its Alibaba stock.

If this deal pays off the way Mayer envisions, Tumbler could help Yahoo finally get its stock price to $33. That would be a major coup because many investors soured on Yahoo after a previous regime led by co-founder Jerry Yang squandered an opportunity five years ago to sell the entire company to Microsoft for $33 per share. The stock spent more than four years trading below $20 before the recent surge that lifted the price to $26.52 through last week.

The deal could backfire though if Yahoo’s effort to make more money alienate a Tumblr user base that so far has been subjected to hardly any advertising during the service’s six-year history.

“Yahoo has to manage this acquisition in a way that keeps Tumblr’s user base while trying to add advertising, which historically tends to turn off a lot of people,” said Forrester Research analyst Zachary Reiss-Davis.

Yahoo said it will work with Tumblr to create ads that “are seamless and enhance the user experience.”

Mayer is betting that Tumblr will provide Yahoo with a captivating hook to reel in more traffic and advertisers on smartphones and tablet computers. That rapidly growing market is expected to become even more important during the next decade as people increasingly consume digital content on mobile devices instead of laptop and desktop machines.

Besides offering one of the top mobile apps, Tumblr also runs one of the world’s busiest websites, featuring 75 million daily posts about everything from politics to pets. Advertising has been a missing ingredient so far as Tumblr, like many online services in their early stages, focused on building a loyal audience before turning its attention to making money.

The deal also has some symbolic significance for Yahoo, an 18-year-old company that had spent much of the past decade aimlessly drifting under different management teams while Google Inc. overtook it in terms of size and influence. At the same time, newcomers such as Facebook Inc. and Twitter began to command the attention of people who found themselves spending less and less time on Yahoo.

Part of Yahoo’s problems stemmed from missed chances to improve its service and technology.

Yahoo flirted with potential acquisitions of Google and Facebook in those two companies’ early days, only to have the talks unravel because Yahoo wasn’t prepared to pay asking prices that were far below the current market values of Google ($300 billion) and Facebook ($63 billion). Yahoo also considered buying YouTube in 2006, only to be outbid by Google, which snapped up the world’s leading online service for $1.76 billion — a price that now looks like a bargain.

Even when Yahoo did pull off deals, the company has been criticized for mismanaging a list of acquired services that includes photo-sharing Flickr, online help-wanted service HotJobs and content-sharing service Del.icio.us. Yahoo ended up selling HotJobs and Del.icio.us, but Mayer has been looking at ways to spruce up Flickr and blend its photos into more of Yahoo’s other services. Mayer is expected to discuss more changes for Flickr at an event in New York Monday evening.

Tumblr could help Yahoo recapture some of its cachet with teens and adults in their early 20s, a demographic that has become tougher for Yahoo to reach in recent years as it fell behind the technological curve and struggled to develop compelling services.

While Facebook has turned into a mainstream social network where even grandparents now connect family and friends, Tumblr has become one of the places where the cool kids hang out.

“Tumblr is redefining creative expression online,” Mayer said. “On many levels, Tumblr and Yahoo! couldn’t be more different, but, at the same time, they couldn’t be more complementary.”

Tumblr emerged as a trendy online hangout by providing a service that makes it easy to share blog posts, photos, video and other content in an enthralling mosaic. The service says it has amassed more than 50 billion posts from 108 million blogs. Tumblr users rely on a dashboard to pinpoint the kinds of blogs that they want to track and also have tools to pass along the posts that interest them.

That wealth of content could be interwoven into Yahoo’s other services that provide coverage of general news, sports, finance and entertainment. Tumblr also will fill Yahoo’s gaping void in the realm of social media. Yahoo so far has had to connect its services to Facebook and Twitter to give its users a social networking outlet.

Having its own social networking service will also give Yahoo more insights into the things that people like — a key to distributing ads to consumers most likely to be interested in a specific products. That data, in turn, should help Yahoo sell more ads and accelerate its revenue growth. After three successive years of declines, Yahoo’s revenue rose slightly last year, but lagged far behind the growth at Google and Facebook. Mayer has vowed to bring Yahoo’s revenue growth back to at least the level of the overall Internet ad market.

Yahoo’s acquisition will deliver a jackpot to Karp, who dropped out of high school to concentrate on computer programming. He ended up being home schooled while taking classes in Japanese and working on gambling software. Later, he became a product executive at a parenting website called UrbanBaby. After CNet bought the site in 2006, Karp set up his own a development service called “Davidville” before deciding to create an outlet for personal expression — an endeavour that hatched Tumblr.

Karp’s cut from the Yahoo deal is about $275 million. Most of the rest of the money will be paid to the venture capitalists that invested about $125 million into Tumblr. That list includes Spark Capital, Sequoia Capital, Greylock Partners, Union Square Ventures and Insight Venture Partners.

The announcement Monday comes after the companies said earlier this month that they were in talks about a possible pairing of one of the world’s largest generic drugmakers, Actavis Inc., with an Irish company that has a portfolio of established, branded drugs.

The combined company will be incorporated in Ireland, and analysts say that country’s lower tax rate is a key to making the deal work. Actavis said it expects about $400 million in after-tax savings and cost cuts from the combination, counting the lower tax rate.

Generic drugmakers like Parsippany, N.J.-based Actavis have benefited the past couple years from the expiration of patents protecting top-selling drugs like the cholesterol fighter Lipitor. But many companies are competing for that revenue source, and analysts expect it to start drying up over the next few years.

The Warner Chilcott PLC deal will give Actavis an earnings jolt starting next year, Susquehanna Financial Group analyst Andrew Finkelstein said in a research note. But he added that he expects revenue from Warner Chilcott’s product portfolio to decline modestly.

Morningstar analyst Michael Waterhouse said Warner Chilcott’s pipeline of products under development also is weak, and he thought both companies were a bit overvalued heading into the deal.

“I would say we’re probably not as enthusiastic as the market has been (about the acquisition),” Waterhouse said.

Actavis was formed last fall through a $5.6 billion combination of Watson Pharmaceuticals of New Jersey and Actavis of Switzerland. It sells versions of Lipitor and the attention deficit hyperactivity disorder drugs Adderall XR and Concerta, among many other products.

Warner Chilcott’s products include the ulcerative colitis treatment Asacol, which is its top-selling drug, and Delzicol, another ulcerative colitis medication approved in February. Its revenue has been hurt the past couple years in part because low-cost generic versions of its osteoporosis drug Actonel went on sale in Western Europe and Canada in 2010, and U.S. sales have slipped as well.

In the deal announced Monday, Warner Chilcott shareholders will receive 0.160 shares of the new company for each share they own. This equals $20.08 per share, which is a 34 per cent premium to the stock’s closing price on May 9, the day before the companies said they were talking about a deal.

Warner Chilcott shareholders would then own a 23 per cent stake in the new company.

Actavis Inc. shareholders will receive one share of the new company for each share they own.

Actavis CEO Paul Bisaro said in a statement that the deal will provide support for the launch of new products over the next several years, specifically in the women’s health category. He said it also gives Actavis a broader portfolio of specialty products that have sales potential outside North America.

Both companies’ boards unanimously approved the deal, which is expected to close by year’s end. It still needs the approval of the majority of shareholders of both companies.

The new company will be called Actavis PLC, and its U.S.-traded shares are expected to trade under the “ACT” ticker symbol on the New York Stock Exchange.

Monday’s announcement follows reports that Actavis had rebuffed takeover bids from generic drugmaker Mylan Inc. and Canada’s Valeant Pharmaceuticals International Inc. and that Novartis AG was considering a bid, something the Swiss drugmaker later denied. Analysts say any companies interested in Actavis could still step in with a fresh offer before the Warner Chilcott deal is completed.

Shares of Actavis climbed more than 2 per cent, or $3.11, to $128.61 in Monday morning trading, while the Standard & Poor’s 500 index was flat. The stock price has spiked 20 per cent since the companies said on May 10 that they were in talks about a combination.

U.S.-traded shares of Warner Chilcott climbed more than 3 per cent, or 60 cents, to $19.81. That price has climbed 32 per cent since closing at $15.01 on May 9.

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Tom Murphy contributed from Indianapolis.

Should nobody pick the correct six numbers, the prize money will roll over to next week’s drawing and almost certainly eclipse the $656 million doled out to winners in Illinois, Kansas and Maryland in the Mega Millions game in March 2012.

But the record could fall Saturday night too if a flurry of last-minute ticket purchases pushes the jackpot much above its current $600 million level. Since the previous drawing on Wednesday, it had grown by at least $236 million.

“If there was no chance, you wouldn’t do it,” said New Jersey attorney Rubin Sinins, who represented five construction workers who claimed a colleague cheated them out of a share of a multimillion-dollar lottery jackpot.

It seems simple enough: Just correctly pick five white balls out of a drum of 59 and one red one out of a drum of 35.

However, the odds of a single $2 ticket hitting the correct combination are about 1 in 175.2 million. That’s slightly less likely than randomly drawing the name of one specific female in the United States: 1 in 157 million, according to the last census.

With such an astronomic payoff available for the lucky ticket holder, some buyers are content to settle for just a share of the winnings.

In Houston, city firefighter John Paetow and a dozen of his colleagues kicked in $10 each for the drawing, as they do occasionally when a the stakes soar into the lottery stratosphere.

“With firemen it’s a camaraderie thing,” said Paetow, 59. “It just makes sense to pool our money; it buys more tickets, gives us a better chance of winning.”

Even if Saturday’s drawing doesn’t top last year’s Mega Millions jackpot, it’s already the highest in Powerball history, surpassing that game’s $587.5 million record set in November 2012.

A major reason for the sales surge is that last month, Powerball landed the nation’s most populous state as California joined 42 others that offer the game. California lottery director Robert O’Neill said the state had brought “sunshine and good fortune” to Powerball.

The Multi-State Lottery Association conducts the drawing live Saturday night from Tallahassee, Fla. The balls are weighed and X-rayed, and there are practice runs before the official televised version.

The loonie fell a penny to 97.12 cents US.

The federal agency says the annual inflation rate dipped six-tenths of a point to 0.4 per cent, below what economists had been expecting.

There was also an outward decline month-to-month, with prices dropping 0.4 per cent from March. The biggest contributor to the decline was gasoline, which fell six per cent from last April.

On a month-to-month basis, gasoline, clothing, restaurant meals, furniture and mortgage interest costs were all lower last month than they were in March.

But the Bank of Canada’s core inflation index, which excludes volatile items such as gasoline, just managed to stay within the central bank’s desired one-to-three range, falling only three-tenths of a point to 1.1 per cent.

Meanwhile, gold prices continued to pull back. June gold bullion dropped $8.10 to US$1,378.80 an ounce, down nearly five per cent this week. On Wednesday, it closed under $1,400 an ounce for the first time in a month.

The June crude contract was up 65 cents to US$95.81 a barrel and July copper climbed four cents to US$3.33 a pound.

Overseas markets were subdued after the European Union statistics office reported that nine of the 17 countries that use the euro are in recession, including France. The combined economy of the 17 countries shrank by 0.2 per cent in the first three months of 2013 compared to the prior quarter.

Gasoline prices at the pump in April was down six per cent from a year earlier, also the largest year-to-year since October 2009.

On a month-to-month basis, consumer prices also fell by a bigger than expected 0.4 per cent. Analysts had been looking for a decline of 0.2 per cent month-to-month, according to a consensus estimate.

The steep drop-off in inflation will likely bring to a halt any talk about the Bank of Canada needing to start raising interest rates, given that inflation is far from the bank’s ideal of two per cent annual inflation and below low end of its target range.

Two provinces — BC and New Brunswick — did fall into negative inflation territory, registering overall price decreases of 0.8 per cent and 0.2 per cent respectively.

Even the central bank’s core inflation index, which excludes volatile items such as gasoline, is getting closer to falling out of the desired range of one-to-three per cent, after dropping to 1.1 per cent in April from 1.3 per cent the previous month.

Analysts had expected the core rate to be 1.2 per cent.

While prices have been moderating the past couple of months, April’s report saw outright price declines across a broad range of consumer goods and services.

Aside from gasoline, overall transportation costs fell 2.1 per cent, while mortgage interest costs dropped 4.3 per cent, video equipment 10.9 per cent, automobiles 0.7 per cent and travel tours 4.8 per cent. On a month-to-month basis, clothing, restaurant meals and furniture also fell.

Prices were not lower for all items, but in many cases the pace of increases moderated.

Food prices rose 1.3 per cent following a 1.8 per cent increase in March, while restaurant meals increased by 1.2 per cent following a 2.2 rise in March.

Shelter costs did increase to 1.3 per cent annualized, from 1.1 in March, as electricity rose 4.2 per cent and rent advanced by 1.6 per cent. Also registering gains were property taxes, natural gas and homeowner replacement costs.

Regionally, aside from the negative inflation in British Columbia and New Brunswick, most provinces saw slowing price pressures. The exceptions were Prince Edward Island, which saw a 0.6 per cent increase to 1.8 per cent, and Alberta, where the inflation rate rose to 1.3 per cent.

Federal prosecutors are asking a judge to sentence 58-year-old Christine Daniel to 27 years in prison for crimes they deem cruel, despicable and heinous. Daniel was found guilty of 11 counts, including wire fraud, tax evasion and witness tampering.

Authorities say Daniel enticed patients to take her herbal product. She charged as much as $100,000 for a six-month treatment program that she claimed could cure cancer, diabetes and multiple sclerosis.

Some of her patients, however, died from complications of cancer within three to six months after taking the supplement.

Toronto Stock Exchange (12,507.60 up 33.95 points):

Surge Energy Inc. (TSX:SGY). Oil and gas. Up 34 cents, or 8.17 per cent, at $4.50 on 15.78 million shares. The energy sector was up 0.21 per cent as the price of crude oil rose 86 cents US to $95.16 per barrel on the New York Mercantile Exchange.

Bombardier Inc. (TSX:BBD.B). Transportation equipment. Up 11 cents, or 2.42 per cent, at $4.66 on 9.60 million shares.

Twin Butte Energy Ltd. (TSX:TBE). Oil explorer. Up two cents, or 0.93 per cent, at $2.16 on 5.96 million shares.

Barrick Gold Corp. (TSX:ABX). Miner. Down 13 cents, or 0.66 per cent, at $19.61 on 5.91 million shares.

Orbite Aluminae Inc. (TSX:ORT). Mining technology. Down 16 cents, or 20.51 per cent, at 62 cents on 5.76 million shares. The Calgary-based company posted a first-quarter net loss of $500,000, or 0.3 per share, shrinking its loss of $3.8 million or two cents per share in the same period a year ago.

Uranium One Inc. (TSX:UUU). Miner. Up a penny, or 0.36 per cent, at $2.79 on 5.34 million shares.

Toronto Venture Exchange (932.86 down 4.01 points):

Fission Uranium Corp. (TSXV:FCU). Uranium explorer. Unchanged at 55 cents on 5.95 million shares.

Med BioGene Inc. (TSX:MBI). Life science. Up three cents, or 17.65 per cent, at 20 cents on 4.77 million shares.

Companies reporting major news:

CAE (TSX:CAE). Flight simulators. Up 66 cents, or 6.23 per cent, at $11.26 on 2.16 million shares. The stock closed at a high not seen since mid-2011 after CAE reported adjusted income was $190.7 million or 74 cents per share, four cents above analyst forecasts and said its order backlog reached a record $4.1 billion.

Telus (TSX:T). Telecommunications. Up 39 cents, or 1.06 per cent, at $37.34 on 1.13 million shares. Telus has offered to buy wireless firm Mobilicity for $380 million and said it was seeking an “expedited review” of the deal by regulators since the small carrier can’t make it financially on its own.

The small First Nation of Hartley Bay says the crew showed up uninvited to carry out work on a project that has not been approved — and that the Gitga’at continue to oppose.

Coun. Marven Robinson says Calgary-based Enbridge (TSX:ENB), the proponent of the 1,600-kilometre pipeline and oil tanker port, has “screwed-up” relations with First Nations and continues to do so.

Consultation with native bands has been a major stumbling block for the $6-billion project that would connect the Alberta oil sands to Asian markets.

Many in the industry are hopeful that a surprise Liberal victory in B.C.’s provincial election this week renews hope that the much-maligned project may yet go ahead.

The federal review panel weighing the project will begin hearing final arguments next month in Terrace, and must issue its report to the federal government by the end of the year.

Critics say the changes will allow major Wall Street banks to continue to dominate the $700 trillion derivatives market.

The Commodity Futures Trading Commission approved the rule on a 4-1 vote. Commissioner Jill Sommers cast the lone dissenting vote.

Under the rule, investment firms would be required to request price quotes for a derivatives contract from a minimum of two banks this year and three beginning in 2014. An earlier proposal had called for price quotes from at least five banks.

Derivatives are investments whose value is based on some other investment, such as oil and currencies. The market was largely unregulated before the 2008 financial crisis. The rule was mandated by Congress under the 2010 financial regulatory overhaul.

By requiring fewer price quotes, critics worry that the market will be less competitive. Five of the largest U.S. banks — JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Morgan Stanley — account for more than 90 per cent of total derivatives contracts.

Dennis Kelleher, the president of Better Markets, a group that advocates stricter financial regulation, said banks opposed the requirement for more price quotes “to prevent a level playing field, competition and transparency.”

Requiring a larger number of quotes gives banks and financial firms that aren’t in the dominant group the opportunity to enter the market and makes it more competitive. That could potentially lower prices for all users of derivatives, such as farmers, airlines or oil companies.

Under the rule, banks and other financial institutions would be required to trade derivatives contracts on new electronic exchanges.

CFTC Chairman Gary Gensler says that will create more transparency because everyone who wants to compete in the marketplace will be able to see prices before deciding to invest. Prior to the rule, they could not.

“This is a significant shift toward market transparency from the status quo,” Gensler said.

Commissioner Bart Chilton said the commission could have achieved greater transparency by approving the original proposal. But he said a compromise was better than no action.

“By failing to act, we leave in place unregulated dark markets. These are the very dark markets that got us into the economic mess in 2008,” Chilton said.

Wall Street banks had opposed requiring a minimum number of bids for derivatives contracts.

An official for the Securities Industry and Financial Markets Association, Wall Street’s largest lobbying organization, says the rule could ultimately hurt the everyday investor that it seeks to protect.

Kenneth E. Bentsen, Jr., acting president and CEO for SIFMA, contends that more bids could chase financial firms out of the trading exchanges. That’s because some might fear confidential price information could be widely broadcast. Fewer firms could lead to less liquidity in the market. That would slow trading.

Under the rule, however, the bids would not be made public.

The lower requirement illustrates how banks have managed to tweak rules written by Congress three years ago that are still being finalized by regulators.

The banks have also succeeded in weakening a rule that would ban banks from trading for their own profit. The latest version of the so-called Volcker Rule includes an exemption for banks to make such trades when they are used to offset others risks taken.

The rule was named after former Federal Reserve Chairman Paul Volcker. Its adoption has been delayed largely because of the banks’ objections.

This province’s exports will grow by 11 per cent this year and 12 per cent next year, says Export Development Canada.

EDC chief economist Peter Hall says “BC is enjoying an exceptional recovery in forestry and very strong gains in ores and metals” and is in “an international sales sweet spot.”

EDC expects forestry exports, due to US housing demand and rising prices, will soar 25 per cent this year and 17 per cent next year, after rising just two per cent last year. Hall predicts higher prices but lower volumes for exports of natural gas.

Hall says coal exports are “being hard hit by the sharp price declines that took hold late last year” and are expected to fall 12 per cemt this year.