Rocket exerts downward drag on German fashion IPO 26 Jun 2019 A clothing site in which Oliver Samwer’s tech investor owns 20% is struggling to float. Global Fashion Group was tainted by association with Home24, another Rocket-backed group which flopped, despite their differences. Investors’ growing aversion is a big problem for Samwer.
Switzerland can afford to gamble on EU referendum 26 Jun 2019 Fear of a popular backlash is preventing the Alpine nation from signing a deal to simplify EU relations and gain better market access. But Bern has little leverage over its trade partner and polls suggest most voters are supportive. Besides, a no vote would leave it no worse off.
Bombardier feeds Japanese jet dreams, not reality 26 Jun 2019 Mitsubishi Heavy is buying the Canadian company’s regional jet business for $550 mln. A support network and new customer ties will help get its troubled SpaceJet off the ground. But adding a struggling unit suggests executives have eyes on the sky, not the bottom line.
Bowl is half full for Japanese toilet maker Lixil 26 Jun 2019 Shareholders of the $4 bln company reinstated the former CEO months after he left, and voted for directors he supported. Yet management-backed nominees won seats too. It's a corporate governance win that leaves a large and possibly contentious board to guide Lixil back to profit.
FedEx gets caught in a trade-war vise 25 Jun 2019 The $41 bln parcel carrier is suing the U.S. government over onerous rules for exports, not least to China. Meanwhile, its own errors may land it on a Beijing blacklist. FedEx can handle a profit hit, but getting embroiled in a tariff fight would put it further behind rival UPS.
Pride brings out best in self-serving companies 25 Jun 2019 Big brands are flaunting their support for the LGBT community, including some who once did the opposite. It’s easy to be cynical, but if only short-term profit mattered, such gestures wouldn’t happen. With so much still to do, the support matters more than the motivation.
Greyhound activist gets few scraps from board coup 25 Jun 2019 Coast Capital failed in its move to revamp the board of FirstGroup, UK owner of the bus operator. True, Chairman Wolfhart Hauser won’t stand for re-election. But the board is mostly unchanged. And, having defeated one revolt, FirstGroup may take longer to break itself up.
Smith & Nephew U.S. pay wheeze hides deeper logic 25 Jun 2019 The British artificial-knee maker is considering moving its listing across the Atlantic, the FT reports. American investors’ tolerance for high wages might help keep CEO Namal Nawana happy. S&N’s business, its M&A ambitions and lowly valuation are better reasons for jumping ship.
Aging AbbVie turns to ugly $63 bln Botox remedy 25 Jun 2019 The drug maker’s Humira accounts for more than half its sales but may soon face competition. Buying Botox maker Allergan at a 45% premium looks like an excessively expensive and temporary face-lift. AbbVie’s money and time could be better spent on more invigorating targets.
Could Taylor Swift be a strategic American asset? 25 Jun 2019 The answer is obvious to her devoted fans. But they don’t get to decide. If Vivendi’s sale of a stake in $30 bln-plus Universal Music attracts China’s Tencent, the deal may need CFIUS approval. And President Trump could easily muster a reason, however thin, to shake it off.
Capgemini will toil to turn buzzwords into gold 25 Jun 2019 The French consultancy led by Paul Hermelin is buying R&D outsourcer Altran for 3.6 bln euros. It’s highly accretive to earnings, and they can cross-sell engineering and IT services to big firms. Apply a more sober financial lens, however, and the returns don’t quite stack up.
The Exchange: Escaping carbon’s grip 25 Jun 2019 Saipem made its name building drills and pipelines for fossil-fuel giants like Saudi Aramco. CEO Stefano Cao visits Breakingviews to discuss how climate change is pushing the company into greener projects – and how tech challenges and a need to protect margins will drive M&A.
New Zimbabwe dollar heading same way as old one 25 Jun 2019 Robert Mugabe’s successor has banned day-to-day use of foreign currency to promote a new local dollar. Crucially, there are no guarantees against the money-printing that killed its predecessor. Without adequate reserves, exports or popular support, the new unit is likely to fail.
Tech’s finance push is disrupting regulators too 25 Jun 2019 Innovations like Facebook’s proposed digital currency challenge established banking rules. New arrivals are hard to pin down, weaken existing players, and invert the risks and rewards of competition. A joined-up global response is necessary - but will be hard to agree.
African swine fever nudges China towards peak pork 25 Jun 2019 The outbreak has sent prices of the meat up 18% in May from a year earlier. The surge is likely to get worse, even if overall inflation remains stable. It is already encouraging a lasting shift among the world’s top buyers - one that might even complicate a trade war compromise.
Guest view: Time for Trump to give Seoul its due 25 Jun 2019 Struggling South Korea has been importing more U.S. goods while Lotte Chemical invests in Louisiana. In return, the White House should exempt the country from threatened auto tariffs and take it off a currency manipulators watchlist, says Korea Society President Thomas Byrne.
Trump will be first to blink in China stare-down 24 Jun 2019 The U.S. president and counterpart Xi Jinping will try to restart trade talks at this week’s G20 summit. Trump may be hoping Beijing will back down, but he needs a deal more – and Xi is feeling combative. That could lead to an agreement with only a superficial U.S. victory.
California’s green-power glut has a silver lining 24 Jun 2019 The Golden State wants half its electricity needs from renewables by 2025, yet last month reduced solar and wind production by the most on record. Expensive storage is the problem. That should soon change. Meantime, savvy companies can take advantage of sporadic free power.
Bristol-Myers drug sale tests $74 bln Celgene deal 24 Jun 2019 U.S. trustbusters have butted in once again, forcing the divestiture of a lucrative treatment. Bristol-Myers could have off-loaded its own nascent drug. Instead it may be hoping for a big price. That would support the idea that Celgene was undervalued, but it’s a riskier path.
Eldorado bets the farm on Caesars turnaround 24 Jun 2019 The serial acquirer of casinos is buying its big-name rival for $8.5 bln, more than twice its own market cap. Eldorado will now share Caesars’ heavy debt load. The smaller company is on a roll with a record of achieving promised synergies. It’ll need all that skill, and more.
Boris Johnson may spice up UK central bank race 24 Jun 2019 The frontrunner to succeed Prime Minister Theresa May tends to stray from the script. That increases the chances of an unconventional candidate replacing Mark Carney as the head of the Bank of England. If Johnson makes the pick, it could even be his most lasting legacy.
Metro raid is an opening salvo in longer battle 24 Jun 2019 Czech and Slovak investors have offered 5.8 bln euros for the German wholesale retailer. Though they speak for more than 30% of the shares, a 3% premium looks measly. To rebuff the assault, Metro CEO Olaf Koch needs to convince sceptical investors about his turnaround.
Natixis gives lesson in bond market fragility 24 Jun 2019 A fund unit owned by the French bank had to write down holdings of exotic bonds and penalise investors who pull money. It’s a prudent move that may stem outflows. But investors will be more nervous in future about funds that dabble in esoteric debt while promising easy liquidity.
Daimler profit crash gives new CEO cost-cut fuel 24 Jun 2019 Swede Ola Kaellenius has started his turn driving the $60 bln Mercedes-Benz owner with a profit warning. Shareholders will be exasperated by the group’s third such shock in a year. But bad news could make it easier for Kaellenius to make the case for much-needed savings.
Carrefour beats a dignified retreat from China 24 Jun 2019 The French retailer is selling its China operations to Suning after over two decades in the market. Valued at 1.4 bln euros including debt, the price looks decent given Carrefour’s slowing sales. For Suning and partner Alibaba, it opens a new front against Tencent and JD.
Delta is uncertain wingman for Korean Air Lines 24 Jun 2019 The $37 bln U.S. carrier bought a 4% stake in the parent of its Asian peer and plans to lift it to 10%. Delta is being regarded by investors as protection for the controlling family’s messy succession plan. Funds aligning against KAL, however, suggest the fight will persist.
Empire State forces U.S. climate progress 21 Jun 2019 New York is mandating net-zero emissions by 2050. That means laggard companies will have to move faster towards renewable energy. More intense investor activism should follow, especially if like-minded states generating more than half America’s $20 trillion GDP join the push.
Big Tech beware: antitrust cop can think small too 21 Jun 2019 The watchdog’s bid to stop a $1.4 bln merger of two book printers is old-school. Yet the Justice Department’s meticulous definition of the sector bodes ill for Facebook and its ilk. Narrow market definitions plus broad measures of customer harm would be the worst of both worlds.
A plutocrat president is up for re-election 21 Jun 2019 Donald Trump launched his 2020 campaign with a populist appeal to America’s forgotten men and women. His signature first-term legislation slashed taxes for companies, which now hand over the least in decades despite abundant profit. Such actions speak louder than Trump’s words.
Review: Counting the poor can miss the point 21 Jun 2019 A posthumous book by poverty expert Anthony Atkinson recounts the many complications of measuring deprivation. The efforts have been valiant and valuable. Still, numerous assumptions and estimates often hide the scandal of hardship, and the gains in the fight for human dignity.