The $160 bln mostly stock deal will create a combination gushing $25 bln of operating cash flow annually. An offshore tax address means there’s no reason to keep over $60 bln of cash on its balance sheet. That’s a lot of financial firepower to buy back shares and fuel more M&A.
Latin America’s biggest economy will get worse before it gets better. The arrest of billionaire banker André Esteves suggests room for further nasty surprises from the Petrobras corruption probe. But feisty independent courts and stronger institutions point to a brighter future.
Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.
Capital levels, profitability and lending rose in the six months to June, the European Banking Authority says. Bad loan ratios are almost double those of U.S. banks, and more EU quantitative easing could be bad for business. Even so, lenders are proving surprisingly healthy.
The heavily indebted engineering firm is seeking creditor protection after a new investor backed out of injecting fresh equity. Abengoa is probably viable, but only with a lot less debt. That makes debt-for-equity swaps and writeoffs the likely next step.
The U.S. pension giant revealed that $24.2 bln of net gains from the asset class over 25 years came at the cost of $3.4 bln in so-called carried interest for fund managers. Private equity is pricey and hitherto opaque, but CalPERS’ analysis so far helps justify the fees.
The $160 bln acquisition of Allergan will cut taxes and add solid assets, but it’s also causing Pfizer to defer until 2018 a decision on splitting up. Even though the company’s disposals have added greater value than acquisitions, CEO Ian Read seems more eager to bulk up.
Finance minister George Osborne isn’t quite the budget zealot his Nov. 25 spending cuts suggest. The UK has run bigger deficits relative to GDP than France during his tenure. He has also executed tax and spending U-turns when required. It helps that gilt investors buy the hype.
Lenders’ capital ratios are higher than previously calculated, the European Banking Authority has said. The watchdog’s technocratic remit makes the error galling. Such confusion could deter investment just as the region’s financial institutions are doing more to deserve it.
Low-cost iron ore miners BHP Billiton and Rio Tinto are accomplished experts digging for the ferro-raw material. They are much less good at consumption estimates. With the ore at 10-year lows, the companies’ investment cases depend on them getting ahead of China’s demand curve.
Hong Kong shareholders rejected the tycoon’s $12.4 bln bid to merge his listed energy and infrastructure units. It’s another sign institutions in the Chinese territory are increasingly willing to exercise their limited powers. Companies can no longer take support for granted.
The activist took a 7.1 pct stake in the faded technology icon, which appears to be in a state of permanent restructuring. The $10 bln copier maker has some decent assets inside a disappointing whole. Finding buyers for some, and milking others for cash, looks logical.
The European Commission wants a mutualised deposit insurance scheme for banks by 2024. Berlin may be averse to the idea of financing non-German busts. But there are some safeguards, and unpicking the link between banks and states would better avoid trouble in the first place.