US antitrust push invites creative dealmaking 4 Apr 2024 Policymakers and trustbusters are eyeing new restrictions on mergers and acquisitions. In this Viewsroom podcast, Breakingviews columnists unpack some imaginative workarounds being used by companies ranging from Big Tech to fast food.
Ben & Jerry’s rocky ESG road bucks vanilla trends 4 Apr 2024 The purpose-driven ice cream brand is being scooped out of Unilever as corporate activism increasingly invites controversy. And yet the maker of flavors like Empower Mint has grown faster than its parent. Social values, especially when authentic, can mix well with financial aims.
McDonut is a happy meal without M&A mess 26 Mar 2024 Krispy Kreme will sell donuts at McDonald’s, sending shares in the pastry maker up 25%. That cuts costs to build stores, akin to synergies, while the $200 bln burger chain takes on little risk. In a world with high rates and harsh trustbusters, it’s a smart twist on dealmaking.
Unilever’s sweet exit comes with sour aftertaste 19 Mar 2024 The $126 bln consumer giant is splitting off its unit that makes Cornetto ice cream. Doing so cuts exposure to food, and may boost sales growth. But Unilever investors are bearing the costs of the split, and their company remains big in the edible version of stranded assets.
Stolen razors are least of US drugstores’ concerns 1 Mar 2024 Walgreens and CVS have locked up items from deodorant to toothpaste. But a hyper-focus on theft is a reflection of drugstores’ more dire straits. Online competition, labor issues, and inflation are cutting into margins. Larceny is just the thing that pharmacies can control.
DSM’s China de-risking plan hinges on booster shot 15 Feb 2024 Shares in the $30 bln Dutch firm surged 14% on plans to hive off its unit that makes vitamins for cattle. DSM is right to steer away from a business hurt by Chinese competition. But management needs it to recover to justify investors’ enthusiasm.
Uber gets the hang of navigating multiple lanes 14 Feb 2024 An inaugural stock buyback, at $7 bln, helps validate the hybrid business model under CEO Dara Khosrowshahi. The company commands a premium to ride-sharing rival Lyft, but a discount to food-delivery specialist DoorDash. It’s safe for investors to let go of the grab handle now.
Heineken dilutes beer’s merrier future 14 Feb 2024 The $54 bln group’s higher prices led to lower volumes, at odds with Carlsberg’s cheerier numbers. Diageo reckons drinkers are shifting from spirits to beer, which should help brewers. Still, without clear evidence investors may not price in the growth a windfall should imply.
The green agenda’s best shot at a revival 13 Feb 2024 Economic distress prompted by globalisation undermines support for the energy transition, climate change economist Valentina Bosetti tells The Exchange podcast. That matters as key US and EU elections approach. Using proceeds from carbon taxes to address inequality is paramount.
The obesity drug craze is entering its next phase 8 Feb 2024 Eli Lilly and Novo Nordisk can’t keep up with demand for their weight loss medications. In this Viewsroom podcast, Breakingviews columnists discuss the hype among celebrities, the different approaches to prescribing them in the US and Europe, and how they can reshape the world.
Even McDonald’s feels the bite of inflation 7 Feb 2024 McDonald’s admitted that post-Covid price hikes are now deterring low-income diners, while Yum Brands posted meager sales growth. Unlike other staples, consumers can simply forego eating out. With groceries looking relatively cheaper, that will curb profit-bolstering price rises.
Unilever is test case for ‘edible stranded assets’ 2 Feb 2024 The $123 bln consumer goods group relies on brands that look vulnerable to sugar taxes and changing eating habits. Like oil majors facing lower demand, Unilever and others like Nestlé may have to write down the value of these assets. Unfortunately, the problem defies easy fixes.
Capital Calls: HSBC, Delivery Hero 30 Jan 2024 Concise views on global finance: The global bank will pay a 57 mln pound penalty for misreporting depositor protection data; the Frankfurt-listed meal delivery company has sold a 4.5% stake in rival Deliveroo, at a loss.
Diageo investors seem braced for a beerier future 30 Jan 2024 The $78 bln drinks giant’s sales of spirits fell in the second half of 2023, but Guinness held up. If investors thought Diageo could hit its sales targets, it would be worth more. One takeaway is that they think more of its future revenue could come from less highly valued beer.
Capital Calls: Intel 26 Jan 2024 Concise views on global finance: A 67% rise for the chipmaker’s stock over the past year implied problems have melted away. The company’s warning that first-quarter earnings would fall 60% short of expectations is not the last reality check.
ADM accounting mess highlights risky exec comp 23 Jan 2024 The grain trader’s shares fell 24% after suspending its CFO amid an accounting investigation. One segment generating only 10% of profit determined a big chunk of executive bonuses. Whatever emerges, putting so much weight on small shifts in results invites problems.
Capital Calls: UK real estate merger 11 Jan 2024 Concise views on global finance: LondonMetric’s all-share move for domestic peer LXi isn’t a bargain, but creates a 4 bln pound landlord with benefits for both sides.
Capital Calls: Cognac, Euro zone inflation 5 Jan 2024 Concise views on global finance: China’s new brandy probe may not be French drinks giants’ main headache; new euro area inflation figures sit all the more awkwardly with the ECB’s refusal to consider rate cuts.
‘Polluter pays’ doctrine will take on new meaning 3 Jan 2024 Carbon-intensive throwaway fashion and ubiquitous plastic waste are dirtying the globe. That may change as governments start to crack down on discarded textiles and polymer-based items. Companies and their investors face a costlier journey to a more sustainable world.
Deflation will help big grocers gobble up minnows 29 Dec 2023 Supermarkets like Walmart and Tesco are expecting goods prices to finally fall. That will help larger chains to cut shoppers’ bills by putting pressure on suppliers such as Unilever. Smaller rivals may find it harder and end up losing customers, making them ripe for takeovers.