Aramco IPO has dug Saudi an even deeper hole 5 Dec 2019 The oil giant’s oversubscribed $25.6 billion listing was supposed to bring in foreign cash to diversify the kingdom away from oil. In the process, it has loaded up local investors with overvalued stock. Saudis have in one sense wound up more leveraged to crude prices, not less.
Viewsroom: Angela Merkel faces early retirement 5 Dec 2019 The German chancellor’s administration is in peril after coalition partner SPD chose left-wingers to lead the party. A snap 2020 election would probably end her 14 years in power and remove another of the world’s centrist governments. Plus: Australia’s colossal bank scandal.
Glencore’s new probe applies shove to succession 5 Dec 2019 British police are investigating possible bribery at the commodity giant. Two days ago 62-year-old boss Ivan Glasenberg, whose firm also faces a U.S. probe, said he could retire next year. Having to fight a legal war on two fronts may help him make up his mind.
ESG rating sellers unite from a position of fear 5 Dec 2019 S&P Global and Moody’s have recently bought suppliers of environmental, social and governance data. That highlights ESG’s increasing importance. But the dealmaking also reflects rating providers’ need to tool up and improve often flawed metrics before someone eats their lunch.
United flies back to bumpy governance 5 Dec 2019 The $22 bln airline is bumping CEO Oscar Munoz up to executive chairman and giving Scott Kirby the control stick. It undoes three years of having an independent chair in the cockpit. Activists inspired that change. United’s new flight path may put it back on their radar.
Moncler offers costly fix for Kering’s Gucci habit 5 Dec 2019 The French fashion conglomerate run by Francois-Henri Pinault may buy Remo Ruffini’s 11 bln euro puffer jacket maker. A deal would help Kering diversify away from its largest brand, but likely at a rich price. And extracting value from a company already at its peak would be hard.
UK property investors pay for watchdog blind spot 5 Dec 2019 The Financial Conduct Authority has passed up chances to ban real-estate funds that promise daily liquidity. Now investors are stuck in a $3.2 bln M&G vehicle that has suspended dealing. Their ire should be aimed at FCA boss Andrew Bailey for tolerating such illogical products.
Shinzo Abe fires off another feeble arrow 5 Dec 2019 Japan’s latest fiscal stimulus package, worth just over $120 billion, will avert stagnation or worse. But a recent consumption tax hike and slower global activity pose risks that policymakers lack the firepower to tackle. Healthy growth and inflation will prove elusive.
London-Shanghai bridge leads back to Hong Kong 5 Dec 2019 SDIC Power postponed a plan to raise some $800 mln using a link between Chinese and British bourses. In rejecting a $34 bln takeover bid from HKEX, the LSE argued its partnership was a better route to the mainland. But the protest-hit financial hub can feel secure on this point.
Gold diggers may find growth is copper-bottomed 5 Dec 2019 Rising prices have filled coffers for bullion miners. Now some, like $31 bln Barrick, are arguing future growth may come from a more modest metal: copper. Using safe-haven returns to bet on a similar, underperforming, material has logic, despite tarnished M&A precedents.
SoftBank WeWork debacle is dot-com bubble déjà vu 4 Dec 2019 Boss Masayoshi Son’s first Silicon Valley foray in the 1990s saw busts around now-notorious online grocer Webvan and others. After the WeWork rescue and Uber’s post-IPO slide, a third shot in the form of a second $100 bln-plus Vision Fund will encounter more investor skepticism.
Expedia’s double boot is swift, harsh and helpful 4 Dec 2019 The travel site’s CEO and CFO are both out after a disagreement with the board over strategy and a brutal profit warning last month. The tumult is bad but the message is good: Chairman Barry Diller thinks the company can do better. His track record elsewhere bolsters his case.
Hadas: Autocrats learning “just-enough” economics 4 Dec 2019 Growth may be faster and fairer in democracies, but oppressive governments aren’t threatened. Globalisation and ever-cheaper technology have made it easier to scrape out enough gains to preserve their popularity. It takes Venezuelan-scale mismanagement to foment massive unrest.
Macron should score rare hat trick in Peugeot deal 4 Dec 2019 The coming merger with Fiat allows public lender Bpifrance to sell a $1.1 bln stake in the carmaker and triple the government’s money. That would allay investor fears about an overbearing French state and give President Emmanuel Macron more ammo to help entrepreneurs.
EU single market is better exported than muzzled 4 Dec 2019 The Netherlands wants the European Union to apply state aid rules to companies backed by foreign governments. That would hike Chinese import prices. Yet Europe’s economic heft gives scope to negotiate, and is better than breaking EU rules to create Siemens-Alstom-style champions.
Orange’s pep pill has few secret ingredients 4 Dec 2019 The French telecoms group needs ideas to offset a stagnant home market. Africa and the Middle East offer hope, yet they are just a small part of the business. A plan to carve out phone masts is vague, and less ambitious than rival operators. Selling more towers would be bolder.
Google CEO move is solution in search of a problem 3 Dec 2019 Sundar Pichai will now also lead $890 bln parent Alphabet, replacing Larry Page. Co-founder Sergey Brin will step back too. Pichai was already the firm’s public face in Washington, where it faces scrutiny. A big reason for the shuffle is elusive, but there may be many small ones.
Ping An’s fintech halo is losing its glow 4 Dec 2019 China's top insurer may list its OneConnect banking software business at a $5 bln valuation. That would be a third lower than its last funding round, which included SoftBank’s Vision Fund. Other cutting-edge ventures have hit bumps, too. Ping An is falling short of the hype.
Murky Hudson’s Bay deal is as good as it gets 3 Dec 2019 A bid from an insider with majority backing always puts a company’s board through its paces. Directors of the owner of retailer Saks got their chairman to raise his offer by 11% to $1.4 bln. Yet although it’s the most deliverable deal, they could have pushed harder for the best.
Huge biotech M&A premiums narrow perception gap 3 Dec 2019 Astellas’ $3 bln deal for Audentes is the fifth 100%-plus premium in the sector this year. Market pessimism is making targets cheap, notably in speculative areas like gene therapy. But buyers are having to pay up to convince sellers they’re not surrendering at fire-sale prices.
European banks get glimmer of regulatory hope 3 Dec 2019 The bloc’s lenders are in the doldrums, partly due to easy monetary policy. But UniCredit’s plans to return 8 billion euros to shareholders point to the benefits of a gentler regulatory approach to capital buffers. Purists may object, but there is a case for placating investors.
Italian dynasties swap roles as newspaper saviours 3 Dec 2019 Fiat scion John Elkann is mimicking Jeff Bezos and Marc Benioff in acquiring a struggling editorial trophy, La Repubblica-owner GEDI, from the De Benedettis. Whether Elkann, who part-owns The Economist, can revive GEDI is hard to say. But the billionaire has the resources to try.
Franco-U.S. cheese war will hit prudent tax reform 3 Dec 2019 Emmanuel Macron and Donald Trump may struggle to back down if the U.S. puts 100% duties on Roquefort. Exporters on both sides will hurt. The bigger casualty, though, is an OECD-led corporate tax rethink, which had some good ideas for taxing Big Tech.
UniCredit group rethink is low-growth antidote 3 Dec 2019 Italy’s biggest bank is moving beyond its past restructuring mode with a promise to deliver 8 bln euros in dividends and buybacks. But ultra-low interest rates will cap growth. A planned new structure to save on capital needs will help balance that threat.
Osram M&A traps hedge funds in prisoner’s dilemma 3 Dec 2019 Speculators now own up to 45% of the German lighting group. If they can be enlightened enough to work together, there’s a way to make would-be acquirer AMS pay more than $5 bln. But if they revert to self-interested type, the deal will fall through and they will all lose money.
ThaiBev is tempting Budweiser with a Saigon brew 3 Dec 2019 Tycoon Charoen Sirivadhanabhakdi may spin beer assets out of his Singapore-listed group, including an attractive Vietnamese pint. An IPO, at a mooted $10 bln valuation, could unlock value. The real prize will be a synergy-creating deal with AB InBev's newly hived off Asian arm.
Online loans party leaves Seoul set for a hangover 3 Dec 2019 Peer-to-peer lending is flourishing in South Korea, despite trouble elsewhere. That’s thanks to government support and dysfunctional banks. But with the economy slowing and households already carrying $1.3 trln of debt, there is credit pain ahead. Web upstarts will feel it first.
American Dream aims to bypass U.S. mall nightmare 2 Dec 2019 A new mega-shopping complex in New Jersey offers SpongeBob roller coasters and a ski slope. The mall is devoting more than half its space to experiences in the hope visitors will keep pushing through the doors. With retail sales fast moving online, that may not be enough.
GE Healthcare offers conglomerate life support 2 Dec 2019 The medical-imaging and diagnostics unit brings in around a third of the troubled company’s earnings. And it’s growing solidly. That may provide enough financial oxygen for more capital-intensive, cyclical businesses, and pension costs, to prevent a breakup – for now, at least.
UniCredit pays up for tricky Turkish escape 2 Dec 2019 The 28 bln euro Italian bank trimmed its holding in Turkish lender Yapi Kredi. Break fees and a steep discount suggest local partner Koc Group got a good deal. Yet CEO Jean Pierre Mustier frees up capital, and paves the way for a proper exit, if markets and regulators play along.