Tech firms can be citizens as well as piggy banks 23 May 2019 San Francisco is mulling a so-called IPO tax to help fund affordable housing. Money isn’t really the issue, though: useful projects get snared in local opposition. Facebook and its ilk would do more good getting staff to be engaged citizens, and even incentivizing them to do so.
Viewsroom: America’s topsy-turvy regulators 23 May 2019 Qualcomm lost a lawsuit brought by one DC overseer, even as the DOJ intervened, while $26 bln T-Mobile US-Sprint merger is getting yanked around by agencies with opposing views. Doing business is hard when agencies no longer act in unison. Plus: Is Luckin Coffee going cold?
Closing diversity gaps involves no mystery 23 May 2019 Many global asset managers think improving diversity compromises returns. Meanwhile JPMorgan persuaded most shareholders that disclosing its gender pay gap was too onerous. These are excuses. The solution is simple: show the gaps, close them, or expect lawmakers to step in.
Brazil’s Natura is Avon’s logical final house call 23 May 2019 An equity value around $2 billion is an ignominious end for the famous cosmetics brand. But the Sao Paulo-based buyer, which also owns Body Shop and Aesop, is probably the right one, strategically and geographically. Synergies worth more than 3 times the premium attest to that.
Cox: “China does it” is a bad antitrust argument 23 May 2019 Sheryl Sandberg says Facebook shouldn’t break up since its Middle Kingdom rivals never will. France and Germany pushed hard for an anti-competitive train merger because of a looming Chinese monopoly. Western values should guide competition law, not Beijing’s Communist Party.
Theme park LBO would be a low-thrills ride 23 May 2019 Activist ValueAct wants $4.3 bln Legoland-operator Merlin to sell itself to private equity. A new owner would need to splash out on fresh attractions and wait years before selling. The modest returns on offer suggest buyout groups won’t be queuing up to get on this rollercoaster.
Meituan Dianping delivers sweet-and-sour to Uber 23 May 2019 Getting bigger enabled the $40 bln Chinese company to cut its operating loss by charging restaurants for ads and fees to tote meals. Intensifying competition with Alibaba, however, will eat into cash. Uber can expect similar trouble as it squares off with Amazon-backed Deliveroo.
Breakdown: Europe’s least irrelevant election 23 May 2019 Voting for the European Parliament is typically a way for a minority of citizens to register dislike of domestic leaders. This year’s poll is no exception. Yet the results will offer clues about national politics, the power of the eurosceptics, and who gets the EU’s top jobs.
TransferWise valuation relies on heroic growth 23 May 2019 The UK-based money transfer startup’s latest fundraising values it at $3.5 bln. Justifying the price tag implies the volume of foreign exchange it handles has to grow roughly fourfold to 200 bln pounds by 2023. It’s a huge market, but competition from banks will only intensify.
Jobs will define Narendra Modi’s next five years 23 May 2019 Early results suggest India's prime minister has won a second term. After a campaign tinged with nationalism, voters looked past an employment crisis, but their leader cannot do the same. Missing out on a demographic dividend will have dire consequences for haves and have-nots.
FamilyMart fracas reheats Chinese corner-store war 23 May 2019 The $13 bln Tokyo-based chain is suing to end its mainland joint venture. It already ranks second in China, ahead of Japanese peers Lawson and 7-Eleven. Untethered, it could expand faster, find a tech-savvier partner, and perhaps take the lead.
Boeing boss’s job is to restore trust – or quit 22 May 2019 The aerospace giant has a technical fix to the problem that caused two 737 MAX crashes. The real challenge for CEO Dennis Muilenburg is to regain the confidence of regulators and the public. That starts with owning up to mistakes made. If he isn’t up to the task, he should go.
Canada adds startup-like optimism to tech turf war 22 May 2019 The country has simpler immigration, livable cities and lower valuations than its southern neighbor. Capitalizing on U.S. dysfunction in a bid to become a tech magnet is smart. But if Silicon Valley is any guide Prime Minister Justin Trudeau should be careful what he wishes for.
Qualcomm, Sprint show U.S. policy blowing in wind 22 May 2019 A judge ruled against the $94 bln chipmaker in an Obama-era case the current administration failed to stop. The DOJ may block the FCC-recommended $26 bln telecom merger with T-Mobile US. Such cases highlight the random nature of Trump-era oversight. That’s bad for business.
Pret’s veggie buyout more appetising than it looks 22 May 2019 The ubiquitous sandwich chain has gobbled up loss-making rival Eat. Taking on nearly 100 extra stores when rivals are struggling to survive sounds reckless. But using the outlets to roll out its vegetarian offering is an established way to boost sales.
Hadas: “Zero privacy” is both blessing and curse 22 May 2019 Back in 1999 a computer executive told people worried about disclosing personal data to “get over it”. They mostly have. Shared information is now too useful for regulation to restore lost innocence. For oppressive governments, meanwhile, individualised media is also valuable.
UK rail IPO comes with noisy fellow travellers 22 May 2019 KKR may float travel-booking company Trainline, used by Brits to book coach and train tickets, for $2 billion. It’s a rare IPO that is growing quickly and generating cash. The problem is that Trainline is pulling into the station soon after a few high-profile UK tech flops.
Barrick’s lowball Acacia offer is easy to refuse 22 May 2019 The Canadian bullion producer offered to buy out minority shareholders in the Tanzanian miner at an 8% discount. That gives an out from an $180 bln tax dispute with the East African country. It’s a bitter pill, but looming arbitration gives shareholders reason not to swallow it.
Generali’s M&A push defies nationalist reflex 22 May 2019 The insurer wants to buy MetLife’s eastern European assets for 2 bln euros, Bloomberg reports. That would strengthen its base outside Italy. Diversification offers investors better prospects than some large shareholders' obsession with keeping Generali in Italian hands.
Vedanta Zambia mess tarnishes Anglo breakup pitch 22 May 2019 President Edgar Lungu wants to nationalise the Indian firm’s Konkola copper mines. The hit looks manageable for owner Anil Agarwal. But falling out with a government is an eyesore, particularly if he wants investors to back a potential carve-up of Anglo American in South Africa.
Google’s hidden costs give Beijing sticker shock 22 May 2019 Reaching for sharper trade weapons, Washington has clamped down on Huawei's access to the U.S. giant's software. Chinese handset makers selling abroad rely on Google tech: the free Android system powers their phones. A crackdown leaves much of a $175 bln export market vulnerable.
Corporate clout on the line in Hong Kong fight 22 May 2019 From Washington to Wan Chai, executives are loudly protesting the city’s plan to allow extradition to mainland China. The business community often gets its way in the financial hub. Losing in this standoff would signify a turning point in Hong Kong for more reasons than one.
BP vote pours gas on Exxon’s climate fire 21 May 2019 Owners of at least a quarter of the U.S. oil major’s shares backed the overwhelming vote for more emissions pledges from its UK rival. BP’s support helped, but the result also shows the growing power of climate activists. Exxon’s decision to fight them now looks even more risky.
Big Tech deserves Wall Street-like global cop 21 May 2019 The G20 helped rein in systemically risky banks after the financial crisis by creating the Financial Stability Board to develop new rules. Adapting that approach to set up an Internet Accountability Board would be a smart way to police the likes of Facebook, YouTube and Twitter.
Samsung reaps benefits of U.S.-China tech war 21 May 2019 Restrictions on Huawei’s use of American chips and software will make it harder to sell telecom gear outside the PRC. And Apple products could be vulnerable to a backlash in China. That leaves openings for the Korean group to sell network equipment as well as more smartphones.
BP investors take the slow road to climate action 21 May 2019 Shareholders endorsed greater disclosure of the oil major’s compatibility with Paris climate goals, but rejected binding targets. It’s a start, but hardly matches the scale of the problem. Both BP and its owners appear unsurprisingly happy to wait for greater political urgency.
Oil market constrains Trump’s Iran war talk 21 May 2019 The U.S. president’s belligerent stance towards Tehran belies his dislike of costlier crude. While Saudi Arabia could increase output, it’s an imperfect hedge to the squeeze that would follow a conflict. Tight supply means Trump has little leeway for more than sabre-rattling.
Songwriters’ Spotify protest song is off-key 21 May 2019 The Swedish streaming site gets flak from musicians angry at low payouts. It’s a legitimate gripe, but label middlemen take home more than Spotify, which doesn’t even cover its costs. Tech giants like Apple and Amazon, meanwhile, stop CEO Daniel Ek from increasing his prices.
British Steel rescue loan is worst of bad options 21 May 2019 The UK’s second-largest steel producer may fail without state credit. Politicians can nationalise the company if they want to save thousands of jobs in a strategic sector. Or they could let the group go bust. The worst outcome is a short-term fix that bails out private owners.
Huawei takes trade war into uncharted territory 21 May 2019 Washington's attack on one of China’s biggest companies will hurt suppliers. But the onslaught marks a more worrying turning point. Such a relentless assault on a corporate giant is virtually unprecedented; that makes everything unpredictable, including the rules of engagement.