Macquarie shape-shifts into lucrative green niche 1 Nov 2019 The $30 bln Aussie bank is good at morphing to stay ahead. Commodities hedging helped lift first-half earnings. Its next phase is a bet on renewables. With fewer constraints than rivals, Macquarie is well-placed to go green. New projects may be shorter-term though, and riskier.
Amgen pops $2.7 bln dose of risky Chinese medicine 1 Nov 2019 The pharma giant is paying a 36% premium for a fifth of biotech group BeiGene. That feels rich for a pre-profit upstart that just fought off a short-seller attack. But the partnership promises the American company quick access to China’s massive cancer market at a critical time.
China’s banking heavyweights flex fee muscles 1 Nov 2019 Third-quarter earnings from $288 bln ICBC and peers offered pleasant surprises, despite economic malaise, rate cuts and loans to riskier borrowers. In part, that’s down to service charges, which mega-lenders have been able to hike this year. Punier rivals are less lucky.
Disney streaming service has plus for Netflix too 31 Oct 2019 Others are also going live, but with a low price and a vault of content Disney+ will be Netflix’s toughest rival. There’s a benefit for CEO Reed Hastings, though: Being lumped together with the Magic Kingdom makes his firm look less like a tech giant in need of regulation.
Holding: Watchdogs may deserve two bites at deals 31 Oct 2019 Unwinding Facebook’s Instagram purchase or other previously cleared mergers seems unfair – and costly. Yet recent research shows many tie-ups have caused unforeseen harm. Allowing regulators limited do-overs would pass legal muster and could help consumers and investors alike.
Viewsroom: LVMH wants more sparkle 31 Oct 2019 The $200 bln luxury conglomerate is making a $14.5 bln bid for Tiffany. The iconic brand known for putting its bling in blue boxes would be wise to accept the proposal. Plus: Venezuela’s leadership saga and a surreal debt drama collide. And: the world’s most expensive chocolate.
Elliott nabs easy win by playing pass the pump 31 Oct 2019 Paul Singer’s activist shop notched another easy win by coaxing $44 bln oil group Marathon to oust its CEO and spin off its Speedway gas stations. The latter bought Hess’s retail arm in 2014 – after Elliott pushed the firm to slim down. Double dipping makes winning a lot easier.
Lazard’s earnings clouds come with silver linings 31 Oct 2019 Operating income at Ken Jacobs’ M&A and money-management firm fell almost twice as much as Evercore last quarter. But at least Lazard, which has bagged roles on the giant Aramco IPO and merger of Fiat with Peugeot, finally trades at a higher multiple of earnings than its rival.
Altria rips off patch slowly with $4.5 bln charge 31 Oct 2019 The tobacco company thinks vaping affiliate Juul is worth one-third less than it paid. It’s counting on slower sales and temporarily lower profitability as regulators weigh limits on e-cigarettes, and localities ban them. Investors are baking in more pessimistic projections.
Peugeot pays hefty dowry to win Fiat’s hand 31 Oct 2019 The Italian-American group’s shareholders are likely to emerge 3.5 bln euros better off after tying the knot with the French rival. It’s a price worth paying. Carlos Tavares has run Peugeot at maximum speed. The union gives him access to the U.S. and 25 bln euros of extra value.
UK election makes Halloween ghouls of capitalists 31 Oct 2019 Labour leader Jeremy Corbyn kicked off his campaign by attacking figures like retail tycoon Mike Ashley and hedge fund manager Crispin Odey. His radical message distracts from Labour’s fuzzy stance on Brexit, and tycoons have few defenders. They face a frightening few months.
Shell’s high-wire balancing act is getting harder 31 Oct 2019 The Anglo-Dutch oil major beat third-quarter expectations but warned it may slow a $25 bln share buyback. Shell needs the economy and oil prices to hold up to control its debt, pay investors their world-beating dividend and replenish reserves. The latter may have to give too.
Goldman faces drip-drip 1MDB pain like Jho Low 31 Oct 2019 The alleged mastermind of the Malaysian fund fraud will pay the U.S. $700 mln. The deal’s loose ends hint at future pain for others, including the Wall Street bank. CEO David Solomon wants to draw a clean line under the scandal. Instead Goldman could end up paying multiple times.
Lloyds’ pain transcends $2.3 bln mis-selling hit 31 Oct 2019 Investors expected a big charge for flogging payment protection insurance, which halted share buybacks and dragged the UK lender to a third-quarter loss. They were less ready for a shrinking top line and rising bad debts. CEO Antonio Horta-Osorio’s premium valuation is at risk.
Cox: Sergio Marchionne posthumously gets his deal 31 Oct 2019 Fiat Chrysler’s $50-bln-plus merger with Peugeot culminates a journey begun by the Italian carmaker’s former CEO to reduce capacity and wasteful spending in the industry. It took some fits and starts, and dalliances with GM and Renault, but has finally come to fruition.
Vodafone is running out of options in India 31 Oct 2019 The telecom giant’s local unit is straining under $14 bln of debt. New Delhi has added to the burden, charging billions in contested levies, while red tape holds up its tower sale. Without fresh capital or debt relief for Vodafone Idea, India is heading towards a duopoly.
China sends two messages with one Macau invitation 31 Oct 2019 Beijing may have suggested the gambling hub as a venue for presidents Trump and Xi to sign an interim trade deal. That snubs restive Hong Kong. But it’s uncomfortable too for casino bosses like Trump backer Sheldon Adelson: they need little reminding of how much there is to lose.
Hong Kong exceptionalism lives another day 31 Oct 2019 The economic cost of the protests continue to mount with the territory now in a technical recession. Yet even as Chinese authorities tighten their grip on the city, Hong Kong’s special status endures, and past precedent suggests it can bounce back from the turmoil.
Apple needs CEO charm more than Facebook 30 Oct 2019 Tim Cook has Washington and even Beijing on side, while Mark Zuckerberg can barely speak without annoying someone in power – and Facebook is blocked in China. Yet since D.C. pressure ratcheted up a year ago, Zuckerberg’s stock has performed better. Diplomacy only goes so far.
Chile’s canceled summits are a climate allegory 30 Oct 2019 The country has pulled out of hosting the U.N.’s annual anti-global-warming confab and the APEC summit following deadly protests over inequality. It exemplifies the dilemmas governments and companies face in trying to tackle long-term problems when there are also immediate needs.
Emerson settlement with Shaw would be win for both 30 Oct 2019 The clock is ticking for the hedge fund to start a proxy battle at the $44 bln conglomerate. Emerson needs a makeover, and D.E. Shaw wants to burnish its activist cred. A deal that shakes up the board and slashes fat without an immediate bust-up would be a victory for everyone.
Fed cut is over-stuffing the cushion this time 30 Oct 2019 Another interest-rate reduction is what traders wanted. But U.S. stocks just hit a record high, the economy is chugging along with solid – if not spectacular – growth, and inflation has crept up. The Fed’s touted data dependency is looking more like addiction to the markets drug.
Larry Culp’s mission: be GE’s least memorable CEO 30 Oct 2019 GE is leaner and less indebted. Its jet and health divisions grew in the third quarter and cash flows are improving. Culp’s predecessors specialized in big gestures. If he can just keep GE on a stable path, with fewer one-offs and write-downs, he’ll be its best chief in decades.
Oil bosses have a love-hate relationship with wind 30 Oct 2019 With fossil fuels increasingly frowned on, rapid growth in renewables should appeal to greenish majors like Total and Royal Dutch Shell. Oil’s much higher returns are a reason to demur. Yet plunging offshore wind costs and the risk of price falls give them little choice.
Hadas: Different rules for new corporate giants 30 Oct 2019 Cheaper information and global markets have produced a new generation of vast and entrenched companies. Abuses of competitive power are likely, but old-style breakups don’t work. Lawmakers and enforcers need to monitor behaviour – and maybe even control prices.
Cash payout would help smooth FCA-Peugeot ride 30 Oct 2019 Combining two second-tier carmakers is tough enough. Add the French government, a state-owned Chinese company and squabbling European families, and things get even messier. A special Peugeot dividend and putting the Agnelli family in charge would make the $50 bln deal cleaner.
Brexit election is answer to the wrong question 30 Oct 2019 The December poll is a flawed second referendum on Britain leaving the European Union. Prime Minister Boris Johnson needs a majority to push through his deal; other parties have to set aside rivalries to stop him. As in 2017, divided voters could deliver an inconclusive result.
Deutsche’s CEO cuts his way through vanishing bank 30 Oct 2019 Boss Christian Sewing’s survival strategy is simple: slash costs, dump bad assets and grow in steadier businesses like corporate banking and asset management. He’s succeeding on the first two and failing on the last. That puts Deutsche’s crucial 2022 returns target at risk.
Thiam gets brief breathing space after wealth loss 30 Oct 2019 Credit Suisse’s vital wealth management business is holding up despite the exit of top banker Iqbal Khan. And net profit soared, helped by a disposal. Boss Tidjane Thiam gets a temporary respite. But with Khan just starting at UBS, the extent of the damage is yet to materialise.
StanChart may get a helping hand from Japan 30 Oct 2019 The UK bank is shopping its 45% stake in $3 bln Indonesian lender Permata, which it controls with a local conglomerate. Offloading risky assets will help boss Bill Winters with his sluggish recovery. Fortunately, SMFG and its peers are keen to gamble on the faster-growing market.