Altria may have missed chance for merger of equals 27 Aug 2019 The tobacco giant is talking to Philip Morris, the international arm it spun off in 2008, about reuniting – a combo worth more than $200 billion. Both see their future in e-cigarettes. But Altria’s market cap was closer to equal last year. The ideal moment may have passed.
Bernie Sanders grasps wrong half of media problem 27 Aug 2019 Everyone knows the news industry is in trouble. But the U.S. Democratic presidential candidate’s proposed solutions – blocking M&A and taxing Silicon Valley – won’t revive a fading sector. The best chance of survival lies with rich patrons like Jeff Bezos and nonprofit models.
Simple math suggests huge opioid hit for pharma 27 Aug 2019 Investors boosted Johnson & Johnson’s stock after an Oklahoma judge ordered the drugmaker to pay $572 mln for its part in fomenting addiction to painkillers. Yet the state represents only about 1% of Americans and this is just one of a torrent of cases. Optimism looks misplaced.
TechnipFMC may work better with split personality 27 Aug 2019 The $11 bln French American oil and gas servicer is breaking in two not long after merging. Investors in the Paris-listed engineering unit will need a higher risk tolerance, though orders are booming. The remaining pipes and wells business should benefit from a higher multiple.
VW still grapples with Piech’s mixed legacy 27 Aug 2019 The former CEO and chairman, who died Sunday, turned a flailing carmaker into the global leader, and built heft in an industry that requires scale. Yet VW’s profitability is far from top-class, and the giant company is still recovering from the legacy of dodgy family governance.
Spain will soon face tab for policy stasis 27 Aug 2019 Prime Minister Pedro Sanchez has spent four months unsuccessfully trying to secure a parliamentary majority and may have to call another election. Political gridlock mattered less when the economy was doing well. Now it will hinder Madrid’s ability to combat slowing growth.
The Exchange: Banking on water 27 Aug 2019 Wall Street is diving into climate risk - with the exception of water. Torgny Holmgren of the Stockholm International Water Institute explains how that’s starting to change and how properly valuing the asset and smart use of technology are key to solving the crisis.
China’s car wreckage cries out for consolidation 27 Aug 2019 Falling sales hit Geely and Great Wall harder in the first half than rivals partnered with foreign manufacturers. Both companies are seeking JVs, but the good ones are mostly taken and there are too many local rivals. A better road to recovery would be to hurry domestic mergers.
New Delhi’s central bank raid helps by half 27 Aug 2019 The record $25 bln being transferred to the government should help Prime Minister Narendra Modi’s stimulus plans. State lenders could use the funds more than the well-cushioned RBI. It would be imprudent to recapitalise them, however, without accompanying governance changes.
Air China edges closer to Cathay Pacific’s cockpit 27 Aug 2019 Unrest in Hong Kong may prompt the local $5 bln airline to change course. Bookings have fallen, and Beijing’s ire over protesting employees forced out its CEO. The mounting pressure makes it a bit easier to see owner Swire selling out to its rival and big mainland shareholder.
Wall Street mistakes water for a business washout 26 Aug 2019 Big banks and investors are thin on the ground at water confabs, including this week’s bumper affair in Stockholm. Yet clean, fresh supplies are increasingly scarce. The economic and financial implications interact with climate risks, too. The finance whizzes are missing out.
Trump’s chaos theory of negotiation is a dead end 26 Aug 2019 The U.S. president says trade talks are back on with Beijing three days after escalating tariffs and calling Chinese leader Xi Jinping an “enemy.” Yet his erratic aims and tenor make it hard for counterparties to engage, as the G7 demonstrated. It’s no way to strike a good deal.
Bristol-Myers passes $74 bln deal’s first big exam 26 Aug 2019 The drugmaker is stretching to buy rival Celgene. To smooth U.S. antitrust review, it put its target’s blockbuster psoriasis treatment on the market. Amgen has won that prize, for an unexpectedly rich $13 bln. That’s a boost for Bristol-Myers’ deal rationale – and its timing.
Dan Loeb could give Ray-Bans a better look 26 Aug 2019 The pushy U.S. investor is building a stake in $63 bln EssilorLuxottica, maker of the sunglasses brand and others. Although his plans are unclear, the company has unveiled another big deal despite the lack of a CEO and messy corporate governance. A fresh outside lens may help.
Trump containment talk hardens Beijing hardliners 26 Aug 2019 The president on Friday announced fresh tariffs and “ordered” American companies to explore relocation, saying he will make sure the U.S. economy stays larger than China’s. It feeds Beijing’s suspicions that the United States now seeks to keep China down, not negotiate with it.
Chinese AI listing concentrates risk factors 26 Aug 2019 Artificial intelligence startup Megvii has filed for a Hong Kong IPO even as protests rock the city. Controversial facial recognition technology and scrutiny from Washington may alarm investors, as could plans for super voting stock. To fundraise now looks brash, or rushed.
Hong Kong leader boxes herself into a corner 26 Aug 2019 Carrie Lam keeps failing to defuse a crisis of her own making. Increasingly out of touch, she has become a liability as the economy suffers and China’s anniversary approaches. It’s getting harder to see how she will be the one to find a compromise that subdues violent protests.
Climate-denying magnate stoked potent opposition 23 Aug 2019 Billionaire David Koch’s funding for anti-global warming causes helped delay a response to a mounting crisis. He died as record fires beset the Amazon. But governments, companies and investors have already consigned his belief that free markets cure all ills to the scrap heap.
Carmakers have $372 bln incentive to defy Trump 23 Aug 2019 That’s the annual sales at risk if they don’t meet emissions rules in California and 14 other states that are tougher than the U.S. president wants. True, carmakers could lose sales elsewhere if Trump were right that cleaner cars cost more and work less well. But he isn’t.
Fed chief crafts central banker’s serenity prayer 23 Aug 2019 Jay Powell hopes to control what he can and rise above what he can’t. His speech at Jackson Hole highlighted trade battles, which he can’t influence, as a new challenge for rate-setters. But his tone suggests more willingness to weigh policy threats when shaping monetary policy.
Biggest global discontinuity risk is to the upside 23 Aug 2019 As G7 leaders prepare for a non-meeting of minds, the worldwide slide into discord seems unstoppable - from Brexit Britain and erratic Trump to troubled Kashmir and Hong Kong. Markets expect more of the same, but the biggest risk now may be a step change – for the better.
EU’s 100 bln euro tech fund scratches wrong itch 23 Aug 2019 Brussels officials, sad about not having their own Google, are cooking up an investment vehicle to fund home-grown unicorns. The bloc’s history suggests the main result will be a lot of squabbling. More important, lack of money isn’t what holds back European tech startups.
Green fears could keep UK high-speed rail on track 23 Aug 2019 The so-called HS2 link from London to northern England may end up 29 billion pounds over budget. That eats into benefits of the bullet train’s potential to narrow Britain’s troubling north-south divide. Yet concerns about global warming point to the project maintaining momentum.
India gets stuck in anti-corruption crossfire 23 Aug 2019 After tycoons, authorities are turning to politicians, arresting opposition veteran and former finance minister P. Chidambaram. The move, months after Narendra Modi's big win, fuels fears of factionalism; it also raises concerns about the unwanted consequences of a cleanup.
Peppa Pig buyer risks going too high on hog 23 Aug 2019 Hasbro has found juicy slabs of fat to cut to justify the $4 bln it is paying to buy UK studio Entertainment One, home to the porcine cartoon character. The U.S. toymaker is also larding up on debt and diluting shareholders for the deal. That could leave it stuck in some mud.
Tencent e-sports stars would play better as a team 23 Aug 2019 Shares in China’s DouYu have crashed since its first results as a U.S.-listed company. Video-game streaming rival Huya is gaining users faster, spends less on sales, and is not as reliant on top gamers. For Tencent, a big investor in both, it’s a new reason to push for a merger.
Viewsroom: How to read the recession runes 22 Aug 2019 A U.S. downturn is near, judging by past early warning signals from yield curves to bank valuations. But fallout from the 2008 crisis has sapped them of some predictive power. Plus: what the exit of Cathay Pacific’s CEO says about Beijing’s response to the Hong Kong protests.
U.S. retail can get better before it gets worse 22 Aug 2019 Big store chains are bucking the gloom, some thanks to their former inefficiency. Nordstrom is cutting stock, J.C. Penney is slashing costs and Target’s bid to compete with Amazon is starting to take effect. That creates room for pleasant surprises – if only in the short term.
Rivals expose WeWork’s low defensive walls 22 Aug 2019 Flexible-office provider Knotel just raised $400 mln. Coworking upstart Industrious could soon make money. WeWork’s huge losses and flawed governance are already enough to undermine its $47 bln pre-IPO valuation. The fragility of its first-mover advantage is another weakness.
A VW-Tesla marriage looks heartbreakingly remote 22 Aug 2019 The German carmaker’s CEO Herbert Diess covets the $40 bln group’s tech, Manager Magazin reported. Tesla could use VW’s cash and manufacturing nous. But boss Elon Musk has shown no interest in cooperating with rivals. And Tesla’s crazy-high valuation makes a takeover unlikely.