European energy’s biggest M&A impasse has an exit 26 Apr 2019 Activist Knight Vinke has an idea to break the stalemate preventing Finnish group Fortum from taking control of 10 bln euro German utility Uniper. Splitting the latter’s business requires fellow investor Elliott and the two companies to compromise. That’s better than gridlock.
Sony missteps arm activists with breakup bombs 26 Apr 2019 The $60 bln electronics giant forecasts a big drop in annual operating profit as PlayStation sales slow. Smartphone losses are mounting, too. After the return of Dan Loeb’s Third Point, the weak outlook is one more spur for boss Kenichiro Yoshida to separate disparate businesses.
Emperor’s new holiday tests wary Japanese shoppers 26 Apr 2019 The world's third-largest economy will take a 10-day break as the crown prince ascends to the Chrysanthemum Throne. Travel agents and malls hope for a spending spike, but this nation of workaholics may disappoint. If they do, that may delay a much-needed consumption tax hike.
Ford zips out of the pits early 26 Apr 2019 The $37 bln automaker has raced past first-quarter estimates, thanks to pickup trucks and promised cost cuts. That suggests some of CEO Jim Hackett’s fixes are starting to gel. Now he needs demonstrable progress on electrification and autonomous driving too.
Yum China plays proficient game of deal chicken 26 Apr 2019 Boss Joey Wat and her board rejected an $18 bln buyout approach led by Hillhouse last summer. After detailing KFC expansion plans and a Pizza Hut turnaround, the shares are now flirting with the offer price. That puts pressure on Yum China to fully justify a standalone strategy.
Amazon’s best weapons are sprawl and usefulness 25 Apr 2019 With revenue of $60 bln in the last three months alone, it’s hard for Jeff Bezos’s firm to stay camouflaged. U.S. presidential hopeful Elizabeth Warren has already made Amazon a target. Expect more cash to be diverted into socially helpful technology and geographic dispersion.
Facebook will join Wall St in fine-and-forget club 25 Apr 2019 The social network’s market value surged as much as $40 bln after first-quarter earnings despite a likely U.S. data-privacy fine of up to $5 bln. Mark Zuckerberg’s giant can easily absorb multiple hits that size and, just like banks after the financial crisis, move on.
Viewsroom: Will millennials kill Silicon Valley? 25 Apr 2019 Young, tech-savvy adults say everything from high prices to climate change may prompt them to leave the San Francisco area. Other U.S. cities can benefit. Also: Why CEO Jack Dorsey should favor Square over Twitter. And what to expect from Indonesian President Widodo’s second term.
GM’s mostly female board shows it can be done 25 Apr 2019 The $56 bln automaker is set to have a majority of female directors, led by CEO Mary Barra. Gender diversity is improving more quickly in Europe thanks to legal mandates. But GM has shown there are enough qualified women to fill the jobs. It can lead the U.S. charge by example.
Hadas: Profit flows freely, companies behave badly 25 Apr 2019 An IMF study shows a significant increase in companies’ pricing power since 2000 in developed economies. The trend in profitability is likely to bring less investment, more market-stifling mergers and more smugness from managers. Change requires a rethink of how competition works.
Commerz Plan B would leave Deutsche Bank on Plan C 25 Apr 2019 Germany’s two biggest banks have ditched merger talks. Commerzbank is in play, and UniCredit is the likeliest suitor. If that deal occurs, Deutsche can’t wait for a new opening – meaning boss Christian Sewing would need more radical surgery to raise dire shareholder returns.
UK supermarket M&A will return in bargain bin 25 Apr 2019 The competition watchdog blocked Sainsbury’s proposed $9 bln takeover of Asda. CEO Mike Coupe has few palatable options to cope with German discounters and the revival of UK peers. Deal fever will resurface after the rot sets in and the grocer’s share price has fallen further.
Invisible India exposes Uber’s growth dilemma 25 Apr 2019 The ride-hailing firm has retreated from China but the IPO prospectus mentions it twice as much as India. Uber has tried to check out of local food delivery. Now a top executive’s exit suggests the cash-sapping subcontinent’s future is far from certain.
Ross McEwan will leave RBS at its peak 25 Apr 2019 The outgoing Kiwi boss helped the loss-making lender become a profitable dividend payer. His successor will face new challenges, including a cooling economy, Brexit, fast-growing digital rivals and the risk of a political lurch to the left that may keep the bank in public hands.
Bayer shareholder revolt rests on shame factor 25 Apr 2019 BlackRock and others want to punish the German chemicals group for its takeover of Monsanto, which destroyed $33 bln of value. But the likely vote of disapproval is more bad PR than a binding order. It’s a sign of the limits of shareholder activism in Germany.
Barclays bolsters devil-you-know retort to Bramson 25 Apr 2019 The UK bank’s traders made a 9 pct return in the first quarter. They’re still not earning their keep, but the result shows the merits of a broad investment bank. That, and a pledge to prune bonuses, may help investors resist the upheaval touted by activist Edward Bramson.
Nomura’s star rainmakers face a drier spell 25 Apr 2019 The $13 bln bank’s Japanese advisory arm had a blowout year, a bright spot in otherwise dismal earnings, thanks to mandates for SoftBank and Takeda. Yet cost cuts abroad, uncertainty around deals like Toshiba Memory's IPO and an apparent snub by Japan Post could tarnish 2019.
Guest view: Halve Bank of Japan’s inflation target 26 Apr 2019 Consumer prices are rising more slowly than the central bank’s 2 percent goal. Aiming for 1 percent is acceptable in a country with a low jobless rate, Koichi Hamada, economic adviser to Prime Minister Shinzo Abe argues. Any resulting yen appreciation will be manageable.
Hyundai Motor’s U-turn may stutter in South Korea 25 Apr 2019 The $29 bln automaker's first quarter sparkled, good news after a loss the previous period. New models revved sales despite a slowdown in China and U.S. safety issues. Worsening economic conditions in its home market, however, could put this turnaround into a spin.
Belt and Road repairs fix only some potholes 25 Apr 2019 Beijing's gathering this week to promote its $1 trln-plus foreign policy push comes after a year of unprecedented troubles, from Pakistan to Malaysia. Under pressure, China has shown some welcome flexibility. But U.S. hostility is ramping up too; that’s far harder to pave over.
Tesla toils in first circle of ‘production hell’ 24 Apr 2019 CEO Elon Musk’s 2017 lament about the Model 3 is taking wider hold. Demand has softened, the battery Gigafactory is underperforming, and capex and cash flow are falling. Yet Musk keeps promising new models and bumper sales, while changing tactics on the fly. The limbo can’t last.
Instagram is becoming Facebook’s sugar daddy 24 Apr 2019 The $521 bln social network’s image-sharing unit is a big reason for strong first-quarter top-line growth. There’s room to wedge more revenue-earning ads into users’ feeds. The risk, though, is the distractions and dodgy content that hamper the “old” Facebook spread to Instagram.
At least Uber investors will have a say on losses 24 Apr 2019 The ride-hailing app touts a separate chair and CEO, one vote per share and annual director elections. Rival Lyft and image-search firm Pinterest by contrast have insiders with supervoting stock and staggered boards. All lose money but only Uber shareholders can push for change.
Occidental gives Anadarko an ill-judged bear hug 24 Apr 2019 Its $38 bln cash-and-stock offer trumps bigger rival Chevron’s bid for the U.S. oil producer, is a two-thirds premium and in theory helps both sides. Yet Occidental’s shares are less attractive and its debt would jump. Chevron only need sweeten its offer a bit to regain its edge.
Deutsche asset unit deal will hinge on the how 24 Apr 2019 Suitors are circling the German bank’s money management division. Allianz or Amundi are interested and have deep pockets. And talks are underway with UBS’s asset manager, the FT reports. Deutsche’s problems make the structure of any transaction as important as the price tag.
Cox: Emmanuel Macron is succumbing to shortcuts 24 Apr 2019 The French president’s plan to close ENA, the elite school that churns out civil servants and CEOs, smacks of symbolism. So does his pledge to fix Notre-Dame in five years. Reforming the economy, like rebuilding a great cathedral, demands tough choices, not political gimmicks.
Picking the next Bank of England chief 24 Apr 2019 The hunt is on for a replacement for Governor Mark Carney, who leaves in early 2020. Breakingviews’ interactive yardstick helps sift through the runners and riders.
How to pick the next Bank of England chief 24 Apr 2019 The hunt is on for a replacement for Governor Mark Carney, who leaves in early 2020. Only talented economists with top-notch central bank experience need apply. Creativity and grit are also required. Breakingviews’ interactive yardstick helps sift through the runners and riders.
SoftBank’s easy credit doesn’t extend to Wirecard 24 Apr 2019 The Japanese group is putting $1 bln into the under-fire fintech firm. Unlike some of SoftBank’s flightier deals, this will be done with convertible debt. Wirecard gets validation from a respected backer, which gets a disruptor on the cheap without taking upfront equity risk.
Credit Suisse’s Thiam needs more than self-help 24 Apr 2019 The Swiss bank’s profit rose in the first quarter, helped by falling costs. But a 4 pct revenue decline makes it harder for CEO Tidjane Thiam to hit his 10 pct return-on-equity target unless the top line recovers. That requires calm markets, and a more profitable investment bank.