Rare-earth gun is best left in Beijing’s holster 29 May 2019 China, which dominates supply of minerals like neodymium, has hinted it might squeeze exports to the United States. In the past, similar embargos caused buyers to find substitutes; bans are hard to enforce, too. The threat suggests retaliatory options are limited.
Hostile markets will cap Salvini’s electoral yield 29 May 2019 Italy’s eurosceptic League party won big in EU elections. That may tempt leader Matteo Salvini to call a snap poll, ushering in a far-right executive. But a budget battle with the European Commission could rouse bond investors. And delaying may strengthen his hand with Brussels.
Berlusconis’ German TV raid looks opportunistic 29 May 2019 Mediaset, controlled by the former Italian prime minister’s family, snapped up 10% of Germany’s ProSieben. There’s a case for Europe’s media groups to combine to fight Netflix, but the move brings the Italians few real benefits. A cheap price is probably the main draw.
Iceland butcher hopes for a killing by moving out 29 May 2019 High-tech abattoir-maker Marel, Iceland’s biggest company, is raising up to 390 mln euros through a secondary listing in Amsterdam. Opening up to global investors should help the 3 bln euro group expand. The big risk is climate-change pressure putting the knife into meat-eating.
Arduous road awaits refueled Chinese used-car app 29 May 2019 Uxin is issuing $230 mln of convertible bonds, including to existing investors TPG and Warburg Pincus. It follows a 70% loss in market value since last year's IPO. A short attack, China’s slowdown and generous terms make it hard to see the deal as accurately calling a bottom.
Macau’s Las Vegas ambitions face reality check 29 May 2019 Millions of Chinese visitors are swarming the tiny territory across a new bridge. The $38 bln gaming hub doesn’t seem to know what to do with them, and is mulling a tourist tax to reduce congestion. The city’s Nevada-inspired economic diversification strategy is due a rethink.
For U.S. patients, knowledge isn’t power 28 May 2019 Forcing hospitals and doctors to disclose net prices to consumers, as President Trump is proposing, is a good idea. Patients can only shop around if they know what they will pay. Even so, healthcare still fails many other tests of being a competitive market.
Payments bonanza has spoils even for latecomers 28 May 2019 Global Payments’ $22 bln merger with Total System Services is the sector’s third big deal this year. What it lacks in first-mover advantage it makes up for with sensible terms – the premium is less than FIS is giving Worldpay. Missing consolidation would have been a worse fate.
UK contractor crisis leaves lasting scars 28 May 2019 Galliford Try rebuffed Bovis’ $1.3 bln bid for its housebuilding unit. The offer left behind a challenged construction business, that could struggle to access capital. After the collapse of Carillion, investor aversion will force public contractors to shrink, or merge.
Breakdown: ESG investing faces sustainability test 28 May 2019 Assessing environmental, social and governance risks is the hot topic in asset management. Support from politicians, millennials and fund houses, along with high-profile votes like those at Amazon and BP, should boost the $1 trln asset class. But success could create problems.
Airtel debt diet prepares it for Africa price war 28 May 2019 The Indian telecom giant is floating 25% of its African arm in London to help cut debt. The continent’s telecom market is growing quickly but competition is fierce. With less debt Airtel will be better positioned to fight back.
Fiat-Renault deal leaves Peugeot in the M&A dust 28 May 2019 The $21 bln auto group looks strategically boxed in now its Italian-American suitor may pair with French rival Renault. CEO Carlos Tavares could try Indian-owned Jaguar Land Rover or General Motors. Yet both Plan Bs lack the $6.3 bln of cost savings he’s missed out on with Fiat.
Nissan gets cheap ride on Fiat Chrysler bandwagon 28 May 2019 The Japanese carmaker could reap over 1 bln euros of savings if 20-year partner Renault merges with its Italian-American rival. It also would curb France’s influence, give Nissan a seat at a bigger table and buy it time to regroup. Diluted strategic clout is a small price to pay.
Central banks’ plain talking has perils 28 May 2019 Monetary policymakers increasingly want to speak directly to the public, partly to defend and justify their independence. A conference in Ukraine showcased this desire – but also the resulting imperative to speak more simply. Stripping away nuances and caveats may backfire.
Snap election will limit Greek policy errors 28 May 2019 Prime Minister Alexis Tsipras has called an early vote. He was likely to lose to the pro-business New Democracy party even if he had held out for a few more months. An early ballot is better for the economy given his Syriza party’s attempts to woo voters with giveaways.
Veteran Hong Kong tycoon leaves bank in a bind 28 May 2019 After 38 years as Bank of East Asia’s CEO, David Li is stepping back and his sons will take over. Returns have been lacklustre as the $9 bln lender battles Paul Singer’s Elliott, which has sued over a share issuance and wants the board to sell. A shakeup is overdue.
Aussie telco buyout exhibits fibre-optic fever 28 May 2019 Sweden’s EQT has offered to buy Vocus for $2.3 bln, a 35% premium to its undisturbed price and far higher than 2017 bids from KKR and Affinity. The price reflects hype around fancy fibre networks, which may not last. Shareholders will be grateful for the opportunity to exit.
Alibaba’s cracks show by revisiting Hong Kong 28 May 2019 The $400 bln e-commerce company plans to raise up to $20 bln from a second listing, five years after its New York IPO. Investors closer to home may give Alibaba a richer valuation. But seeking fresh capital alongside younger rivals also suggests its dominance is under threat.
Fiat gets motors revving on auto consolidation 27 May 2019 The Italian-American car group proposed a 33 bln euro merger with Renault that should keep Nissan warm, please the French state and give the Agnelli family a chunk of cash. More importantly, it unlocks a 5 bln euro bonanza of cost savings that will put industry rivals on notice.
Fragmented election muddles Europe’s politics 27 May 2019 Nationalist forces failed to make big gains in the European Parliament. But dominant groups lost ground to liberal and green rivals, complicating the choice of European Commission president. Victory for Italy’s Matteo Salvini and the UK Brexit Party will shape domestic decisions.
China’s small bank bailouts duck bankruptcy test 27 May 2019 Baoshang, linked to missing billionaire Xiao Jianhua, has been brought under state control. Despite vocal threats, Beijing remains reluctant to allow even disgraced local lenders to fail. Consolidation is the alternative, but healthy peers will prove unwilling partners.
Hitachi’s spinoff lacks buyout chemistry 27 May 2019 Bain and KKR are eyeing the Japanese giant’s $6 bln chemicals arm. Steady cash flow, modest debt – plus turnaround prospects – account for the attraction. But it’s pricey relative to rivals, and a splashy push into next-gen telecoms and electric cars could take years to pay off.
Car industry second-stringers lock arms to compete 26 May 2019 Renault and Fiat Chrysler are crafting an alliance that could let them cut costs, pool technology and better bargain with rivals. Even without merging, savings could be worth more than Renault’s 15 bln euro market value. Former Fiat boss Sergio Marchionne’s dream is coming true.
Water can flow around U.S. infrastructure blockage 24 May 2019 The $1 trln needed to fix the nation’s aging pipes and other H2O infrastructure isn’t coming any time soon – as a new delay to a U.S. funding plan makes clear. The industry still has room for improvement, though, starting with better use of technology, data and capital.
Hollywood superagents demand investor tolerance 24 May 2019 Endeavor, the owner of William Morris, IMG and UFC mixed martial arts, is going public with a complex structure. In a town built on relationships there are benefits to keeping those with the best contacts close. But governance and an industry in flux confuse the IPO script.
May’s replacement will face same Brexit dilemma 24 May 2019 The British prime minister’s resignation was inevitable. But the Conservative party’s next leader will have no chance of negotiating a better Brexit deal, and faces the same parliamentary opposition. That leaves a risky election as one of the few remaining options.
Parent’s bankruptcy loosens its grip on Casino 24 May 2019 The French grocery giant’s debt-riddled controlling shareholder, Rallye, sought protection from its creditors. For now, Casino will keep sacrificing growth to pay large dividends to owner Jean-Charles Naouri. But a debt restructuring might eventually free the 3.5 bln euro group.
Popular Modi puts Indian resistance to the test 24 May 2019 Prime Minister Narendra Modi has been re-elected despite concerns he strong-arms the central bank, judiciary, and media. Voters seem unfussed about checks and balances - a global trend. But if he pushes them too hard, India’s democratic institutions will struggle to hold up.
Isolated Huawei may be shoved into Beijing’s arms 24 May 2019 Important suppliers such as Arm and Intel are abandoning the Chinese telecom titan after the United States blacklisted it. That puts $50 bln in overseas revenue at risk. Huawei has cash to cope for now, but a breakup or state intrusion can’t be dismissed as potential endgames.
Chinese booze behemoth distills a sobering reality 24 May 2019 Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.