John Malone’s Swiss sale still faces interference 22 Aug 2019 Sunrise wants to gee up support for its $6.3 bln purchase of Alpine assets held by the “cable cowboy”. Yet new, higher synergy estimates lack credibility without explanation, and big shareholder Freenet rightly panned the price. CEO Olaf Swantee still has a fight on his hands.
Cigs show challenge of putting stakeholders first 22 Aug 2019 Tobacco companies that were run for customers rather than shareholders would aim to reduce sales of their noxious products. But less scrupulous rivals can undermine solitary socially conscious CEOs. Without collusion or new laws, corporate virtue-talk is mostly a smokescreen.
Breakdown: The global fight over Big Tech’s taxes 22 Aug 2019 OECD countries are trying to agree a new set of rules for the likes of Google. States in Europe and elsewhere want more income from digital behemoths but could well face U.S. intransigence. That makes a messy patchwork of local levies and American countermeasures likely.
Beijing’s Hong Kong hard line threatens everyone 22 Aug 2019 President Xi Jinping has peaceful options to calm protests. Instead state media are talking treason and terrorism; the army is on standby. That China would even consider sacrificing its prize financial centre for nationalism shows economic pragmatism is being overruled by anger.
Airlines flash economic warning lights Down Under 22 Aug 2019 Profit at Qantas and Air New Zealand fell, hurt both by pricey fuel and headwinds at home. Corporate and discount travellers alike are pulling back, and neither carrier is offering much future guidance. Any benefits of rock-bottom interest rates are taking time to trickle down.
Walmart adds solar burns to Tesla’s challenges 21 Aug 2019 The U.S. retailing giant is suing Elon Musk’s $40 bln electric-car maker for negligence after its solar panels allegedly sparked fires at stores, further denting Tesla’s quality-control image. Walmart’s move also puts Musk’s odd 2016 acquisition of SolarCity back in the spotlight.
Banks win a little more rope to hang themselves 21 Aug 2019 The Volcker Rule stopping banks betting with their own money was worthy but flawed. That’s still the case after its latest rewrite, but it may at least be more usable. Eased rules imply Wall Street firms are no longer in the sin bin. It’s up to them to prove that’s justified.
Trailblazing German bond sale has hidden message 21 Aug 2019 The government of Europe’s biggest economy managed to sell 30-year debt at a negative yield for the first time. Expectations of imminent monetary easing created some demand. However, details of the auction reveal a shortage of investors buying into the fixed-income mania.
Greenland is not for sale, but the UK might be 21 Aug 2019 Donald Trump won’t be visiting Denmark, after it rejected his interest in its autonomous dependent territory. To quench his thirst for geo-M&A, the U.S. president could aim for the United Kingdom. The target is undeniably much larger, but it may soon be available at a low price.
Hadas: Boeing lens refracts a Beijing dilemma 21 Aug 2019 Xi Jinping wants both tight government control and a modern economy. That combination has never worked, for good reasons. China’s leader could learn from the U.S. aerospace giant’s mess. A politically uncomfortable free press can be an economically helpful check on corruption.
Gold would shine brighter in thick of currency war 21 Aug 2019 Trade and geopolitical tensions have heightened demand for safe havens, but with policymakers trying to keep currencies down, the dollar, yen and Swiss franc offer only partial protection. The yellow metal is different. No one will push back if its price keeps rising.
Alibaba drives home costs of Hong Kong unrest 21 Aug 2019 The Chinese giant will delay a mooted $15 bln listing in the Asian hub after brewer AB InBev shelved its own. A trade war and protests are a poor backdrop for big offers. That will deter others and land a fresh blow to a city where business confidence is rapidly on the decline.
Meituan Dianping gets better at multitasking 21 Aug 2019 The $50 bln delivery-to-ride-hailing giant’s takeaway unit is expected to post its first profitable quarter on Friday, as it gets better at juggling multiple businesses. It has scaled down a costly bike sharing venture, while a push into groceries and maps plays to its strengths.
India could use a good economic crisis 21 Aug 2019 Car sales are down, unemployment is up and new investment proposals are at a 15-year low. There may be a silver lining: India has a record of bold reforms in times of stress, as when the country opened up in 1991. Prime Minister Narendra Modi has the mandate to repeat the trick.
Italian odd-couple trade is market’s better hope 20 Aug 2019 PM Giuseppe Conte’s resignation speech was a clear pitch to lead another coalition government including the center left PD and hapless 5-Star. That’s still a shaky combination, but with a stronger pro-EU tilt and more fiscal discipline than the partnership it would replace.
Tech will struggle to evade U.S. antitrust octopus 20 Aug 2019 Facebook and Apple may soon face state-level probes into their business practices, as well as two by federal agencies. America’s multi-tentacled approach to antitrust is a tangled mess, but a strangely efficient one. It may also favor a tougher end result.
Transatlantic pet care deal will need grooming 20 Aug 2019 Elanco is paying $7.4 billion in cash and shares to buy Bayer’s animal-health division. The deal may make more sense for the seller than the buyer. The Eli Lilly spinoff will have to ramp up sales and deliver on ambitious cost-cutting plans to make a success of its acquisition.
Smartphones may be as good as it gets for Xiaomi 20 Aug 2019 Revenue at the Chinese group's handset unit rose a tad despite shrinking demand for such devices. But a push into internet services has been disappointing: Boss Lei Jun is struggling to wring more money out of a growing user base. Xiaomi’s premium valuation looks too generous.
Buyout barons play good guy in German lighting M&A 20 Aug 2019 Bain and Carlyle’s $4 billion Osram bid may be trumped by chipmaker AMS. Trade unions, which sit on the target’s board, are more worried by the latter than the former. While Chairman Peter Bauer may hear out the Austrian suitor, its heavy debt load will be hard to ignore.
Britain’s blackout whodunnit has multiple suspects 20 Aug 2019 An initial report sheds inconclusive light on a major recent power cut. Wind and gas-fired generators, network distributors, and National Grid may all have goofed. One thing is clear: the UK needs to go big on battery storage to accompany its commendable rush to renewables.
Investors can give Imperial Brands a bit more time 20 Aug 2019 Some shareholders are gagging for cash from more asset sales. They’re rightly angry about the tobacco firm’s share price collapse. But striking good deals for cancer sticks might be tricky. Beleaguered management would do better to focus on rolling out less harmful products.
Knight Vinke tilts at new European energy windmill 20 Aug 2019 The activist investor doesn’t want its 1.3% stake in Swiss utility Alpiq to be squeezed out in a delisting. The offer does look undervalued. But as with its other European energy interventions, Knight Vinke’s worthy crusade for shareholder justice faces stiff headwinds.
Twitter deserves a follow for China mute and block 20 Aug 2019 The $32 bln social network suspended state-backed accounts trying to subvert protests in Hong Kong. It also will stop taking ads from government-controlled media. Beijing’s wedge issue is a good opportunity for Facebook, YouTube and others to reconsider profiting from propaganda.
BHP boss makes himself tougher act to follow 20 Aug 2019 The miner reported a record $3.9 bln final dividend alongside its highest earnings in five years. Even as CEO Andrew Mackenzie conserves cash ahead of economic clouds and the end of his tenure, he has fulfilled shareholder return pledges. Any successor will face harder choices.
It is too soon to call a bottom on Baidu 20 Aug 2019 Despite a 62% decline in quarterly profit, the $36 bln Chinese internet company gave investors something to cheer with unexpected growth in video. Its main search business is hurting, though, and the ad outlook is weak. ByteDance and Meituan Dianping are coming for Baidu, too.
Li Ka-shing raises fresh glass to diversification 19 Aug 2019 Hong Kong’s richest man is buying the Greene King pub chain for $5.6 bln including debt. Most of his empire’s sales are abroad already. But given the deal injects new capital into the UK, it’s still a boon for Brexit Britain and a minor thumbs-down for his troubled home turf.
American CEOs may be half way to enlightenment 19 Aug 2019 The Business Roundtable touted a pledge by corporate leaders to run companies more for the greater good as if it’s a new era. In reality, shareholder primacy has reached a natural limit. Such promises, however, require concrete steps. One might be breaking down CEO primacy, too.
Holding: Are white-collar prosecutors going soft? 19 Aug 2019 That’s the implication of declining U.S. demand for defense lawyers. It’s possible corporate America is finally behaving itself. More likely, though, the dearth of cases against banks and other companies means enforcers are both turning a blind eye and chasing different prey.
SoftBank skin in the game risks major organ damage 19 Aug 2019 CEO Masayoshi Son and his dealmakers could contribute a chunk of the capital for Vision Fund 2, according to reports. Aligning staff and investors’ incentives is one thing. But since SoftBank would lend them the cash, its own losses would be magnified if the tech vehicle flops.
Green bond purists overlook benefits of grey 19 Aug 2019 Companies that pollute can sell debt with an eco-friendly tag if they ringfence the money for climate-conscious projects. Critics call this “greenwashing”. But the extra transparency asked of borrowers is useful. So is an injection of ethical thinking into corporate treasuries.