Southern Europe may miss Wolfgang Schaeuble 27 Sep 2017 Germany’s finance minister is ready to step down to become the head of the lower house of parliament. An insistence on budget discipline made him popular at home but reviled in crisis-hit euro zone countries. His replacement may come from a party that takes an even tougher line.
EU probe may be least of EssilorLuxottica problems 27 Sep 2017 Brussels is polishing its glasses for a close antitrust read of the $54 bln merger of Essilor and Luxottica. But the eyewear behemoths face other headaches, like customer defections and new competitor alliances. By the time the deal closes, its benefits could look fuzzy.
Hadas: Fighting corruption delivers small payoffs 27 Sep 2017 Miner BHP wants to see if 20 years of more openness has made lives better. It’s doubtful. The "Panama Papers", Brazil's "Car Wash" and Olympics scandals suggest graft remains standard practice. Public outrage may be subdued, though, because obvious economic harm is hard to find.
Alstom gains upper hand in Franco-German rail deal 27 Sep 2017 The French group’s shareholders will own nearly half the combination with Siemens’ train unit, despite contributing just a third of the operating profit. Alstom also keeps its CEO and head office. Hefty cost savings and the creation of a European champion justify the concessions.
Fortum price for Uniper implies another bite later 27 Sep 2017 The Finnish power group will offer 8.1 billion euros for its German target. E.ON, with 47 percent of Uniper, is on board, but other shareholders can reasonably expect a bigger premium. If Fortum wants full ownership, it may take more time – and more money.
Cerberus tests demand with long-awaited Bawag exit 27 Sep 2017 The U.S. buyout firm is planning an IPO of the Austrian lender it bought, damaged by the Refco trading scandal, in 2006. For Cerberus and its partners, it has been a drawn-out turnaround. For new investors, Bawag is temptingly digital and efficient. The caveat: it’s still a bank.
India walks tightrope with “black money” fight 27 Sep 2017 Premier Narendra Modi has unleashed a raft of initiatives to root out income obtained illegally or hidden from the taxman. The cost has been a sharp slowdown in growth. The potential prize is a big uptick in India’s ability to spend – and an easier path for Modi to re-election.
Siemens and Alstom put European engine on track 26 Sep 2017 The German firm is merging its rail unit with its French rival. It's a deal that has long made strategic sense but stumbled over turf issues. That the two countries are pulling it off after Angela Merkel’s election setback suggests fresh steam for the continent's political unity.
Trump’s new Democrat friends put China on notice 26 Sep 2017 The U.S. president touted his common ground with congressional minority leaders Chuck Schumer and Nancy Pelosi when it comes to Beijing. They talk tougher on currency manipulation and trade than some in the White House. Their chumminess could put more economic pressure on China.
College-sports fraud case obscures the real crime 26 Sep 2017 Federal prosecutors have charged 10 people, including four coaches, with using bribes to influence university basketball players. The government says the case exposes the dark underbelly of the sport. But fraud flourishes largely because the NCAA cartel refuses to pay athletes.
Marc Andreessen’s software prophecy reverses 26 Sep 2017 It's now the world doing the eating. Technology takeovers, led by acquirers from far beyond the sector, are outpacing the overall M&A market, a BCG study finds. Many of these deals waste capital, however, and they provide a shaky underpinning for lofty industry valuations.
U.S. will pay for Puerto Rico one way or another 26 Sep 2017 The already-bankrupt commonwealth is reeling from the devastation wreaked by Hurricane Maria. Blackouts may persist for months even as a $72 bln debt bill looms. Without swift and generous aid from Washington, a mass exodus for the mainland will only increase the ultimate cost.
Botched SEC hack probe a warning for other agencies 26 Sep 2017 Chair Jay Clayton says he doesn’t know the exact timing of a 2016 breach and his predecessor may not have been notified. It’s troubling given the sensitive market data kept there, and a heads up for the CFTC and other watchdogs. Investor worry over their defenses is justified.
Macron’s European vision too honest for own good 26 Sep 2017 The French president set out comprehensive proposals to overhaul defence, taxes, social policy and more. Though he deserves credit for articulating Europe’s potential, his detractors have many targets to attack. Candour about EU integration makes such dreams harder to realise.
Italian banks become unlikely governance converts 26 Sep 2017 UniCredit will give its board authority to propose directors. Mediobanca has taken similar steps. This reflects the loss of power of foundations and investor blocks. Broader shareholder representation could make banks healthier, if boards resist the urge to feather their nests.
Equifax can’t even oust its failed CEO effectively 26 Sep 2017 Rick Smith is "retiring," as the euphemism goes, after a massive cyber attack and fumbled response - and with little financial penalty. The interim management plan makes clear the board hadn't planned succession adequately either. Equifax needs regime change at every level.
Uber finally seeks permission, not forgiveness 26 Sep 2017 Facing a ban in London, the ride-hailing app’s new CEO conceded mistakes. It’s a big shift for a company that famously takes few prisoners. Londoners may want Uber’s service but rules are mostly there for a reason. Compromise could be the Silicon Valley invader’s reboot strategy.
Nestlé turnaround plan is bravely boring 26 Sep 2017 Under activist pressure, Europe’s largest food group is aiming to boost profitability. But the newish CEO isn’t inclined to flashy moves like a sale of the L’Oréal stake or a big acquisition. That’s praiseworthy in a way, but it will disappoint Nestlé’s more impatient investors.
Market to Rocket Internet: initiate breakup mode 26 Sep 2017 The $4 billion German tech investor trades at a whopping discount to the sum of its parts. To unlock that value, Oliver Samwer’s company needs urgent repair. Returning spare cash to shareholders and spinning off its stake in Delivery Hero would be a good start.
German vote bodes ill for utilities and autos 26 Sep 2017 Chancellor Angela Merkel may well turn to the Greens to form a coalition government. The party’s priority is combating climate change. Carbon-heavy power producers like RWE and carmakers wedded to the internal combustion engine are likely to be the first in the firing line.
Alibaba trades margins for clarity in logistics 26 Sep 2017 The tech giant is paying about $800 mln to lift its stake in logistics arm Cainiao slightly to 51 pct. Keeping the unit at arm’s length had prompted SEC scrutiny. But absorbing the capital-intensive and loss-making Cainiao into the parent’s accounts will weigh on margins.
Macau mobster’s ICO is ideal test for watchdogs 26 Sep 2017 Former gangland boss “Broken Tooth” is backing a $500 million initial coin offering, according to Hong Kong’s SCMP. The convicted money-launderer’s deal lends ammo to those calling for the suppression of new crypto-currencies. But this is a great opportunity to refine rules.
Sunac’s spending spree leaves no room for error 26 Sep 2017 Investors have rewarded the Chinese property developer’s debt-fuelled expansion. Chairman Sun Hongbin's aggressive land-grab may well pay off, especially if the sector consolidates. But as property prices cool and political risk rises, a small misstep could be life-threatening.
High yield earns stamp of approval for Japan Post 26 Sep 2017 Tokyo has sold $11 bln of stock in the postal operator, mostly to Japanese households. This sequel to a huge privatisation in 2015 owes little to the former state monopoly's growth prospects, and almost everything to its cheap valuation and unusually high dividend.
Greenhill takes painful path back to the old days 25 Sep 2017 The M&A boutique is piling on debt to buy back a third of its stock and may scrap the dividend. CEO Scott Bok and staff will own almost half the firm, making it more like a Wall Street partnership of yore. The move, however, is being made from a position of weakness not strength.
Cox: Facebook’s about-face is only partial victory 25 Sep 2017 Opponents of multi-class share structures can hail Mark Zuckerberg's nixing of zero-vote stock as a landmark moment. But the social network is facing other challenges that probably made it expedient to avoid a courtroom fight with investors. The battle for good governance rages on.
NFL fumble leaves broadcasters facing the penalty 25 Sep 2017 President Trump is attacking football players who don’t stand for the national anthem. But falling TV ratings are a deeper-seated problem for the sport. The likes of Disney and Fox that shelled out billions for the rights face pain. But CBS could be in for a major sack.
Retailer puts huge discount on activist overreach 25 Sep 2017 Two hedge funds want to oust Tuesday Morning’s Steven Becker, a fellow pushy investor who ended up as CEO. The home-furnishing chain’s stock has fallen 62 pct on his watch - a reminder that having smart financial ideas doesn’t mean activists make good corporate chieftains.
UK banks are trapped in a pincer movement 25 Sep 2017 The Bank of England says lenders will face higher capital requirements – and all the more so if they are vulnerable to consumer loans souring. Meanwhile the opposition Labour party wants to cap credit card interest. Investors may have to give up hopes of ever-larger dividends.
AIG deserves to be SIFI-free, with caveats 25 Sep 2017 Watchdogs delayed a decision on whether to remove the insurer’s status as a systemic risk. It seems justified, as AIG has halved in size since its $182 bln bailout and long ditched the unit behind its collapse. But regulators should use safeguards to avoid deregulating too far.