GE boss reaches milestone in Sisyphean trial 28 Oct 2020 Larry Culp managed to offset damage from grounded planes and declining power-sector demand with helpfully timed payments to report positive cash flow in the third quarter. Other challenges remain, from debt to GE’s insurance business. Then there’s the existential part.
Deutsche CEO will dust off Commerz merger in 2021 28 Oct 2020 Despite a recent trading boom, boss Christian Sewing will soon have to scrap his 2022 profit target. Since further cost cuts are tricky, reviving a 2019 aborted union with Commerzbank is the logical Plan B. It helps that his bank is now healthier, and regulators more forgiving.
Corona Capital: Drugmaker’s pick-me-up, Golf M&A 28 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Drugmaker GSK sees a recovery in vaccinations against old-school ailments; meanwhile Covid-19 turns out to be a handy driver when it comes to golf-related dealmaking.
Daimler bags lux joyride on Aston Martin’s dime 28 Oct 2020 The $59 bln Mercedes-maker has traded some of its technology for a 20% stake in the James Bond marque as part of a wider 1.2 bln pound rescue. In return for access to battery-operated cars, CEO Ola Kaellenius gets a free option on a super-premium brand. It’s a trip worth taking.
Kazakh copper takeover looks opportunistic 28 Oct 2020 Kaz Minerals’ chairman and its biggest shareholder are offering 3 bln pounds for the London-listed miner. It’s a tiny 12% premium and selling now would mean missing out on the gains from a battery-powered boom. But with little hope for a rival deal, investors may still accept it.
Nomura cashes last post-dated efficiency cheque 28 Oct 2020 Chief Executive Kentaro Okuda pledged to reinvent the bank when he took over in April, and now he’s delivered higher pre-tax profit in its three main units with record input from overseas. Earlier revamps did a lot of lifting. That cues Okuda to start a deeper overhaul.
It’s time for Sheldon Adelson to leave Las Vegas 28 Oct 2020 His $37 bln casino company may sell U.S. assets for $6 bln to double down on fast-growing Asian markets. That would thin its hedge against risks in Chinese Macau, but Nevada contributes barely 10% of earnings. Las Vegas Sands could use the cash for deals – and debts.
Big banks are ill-suited to be biodiversity cops 28 Oct 2020 Under pressure from investors and regulators, lenders have woken up to the financial risks of climate change. Activists are pushing for similar urgency in protecting the world’s variety of plants, animals and insects. But any big shift requires governments to lay down the law.
Remember TikTok? Send an indulgence to deal gods 28 Oct 2020 The Chinese-backed video platform is waiting for a U.S. court ruling, Trump administration approval, and then Beijing has to have a word. That’s all before integration with Oracle and Walmart even starts. With the U.S. election forthcoming, TikTok is stuck in M&A purgatory.
Microsoft can flip the antitrust script 27 Oct 2020 The software giant and the rest of Big Tech have benefited from pandemic conditions. It saw a 12% jump in revenue. But having been through the anticompetitive ringer, it’s largely escaped the current D.C. scrutiny of its rivals. That gives it an edge in focusing more on growth.
Health insurers put Google market power to shame 27 Oct 2020 Anthem, Humana and UnitedHealth stocks have outperformed the tech giant's parent Alphabet over the past decade. U.S. insurers benefit from near-monopolies in many regions. Americans have few choices among hospitals too. Maybe Big Health is a better antitrust target than Big Tech.
Rejigged Tiffany deal would be face-saving truce 27 Oct 2020 LVMH and its U.S. target are trying to settle a bitter row over a planned $16 bln takeover. At $130 a share, French tycoon Bernard Arnault would save some $600 mln. That’s not massive. But he would control Tiffany before the key winter holiday season.
AIG is shrinking itself into a digestible target 27 Oct 2020 The $27 bln U.S. insurer changed CEOs and said it will separate its life and retirement arm. Unloading a business weighed down by ultra-low rates should please shareholders. More importantly, the move may make the firm synonymous with trouble easier for hungry buyers to swallow.
Cuccia’s heir deserves longer reign at Mediobanca 27 Oct 2020 The Milan bank that called the shots in Italian industry has successfully transitioned from power-brokering to profitability under CEO Alberto Nagel. A new pushy shareholder, Leonardo Del Vecchio, and more competition from Intesa will keep him on his toes, where he should be.
UK manager for the rich makes worthy activist prey 27 Oct 2020 PrimeStone Capital has called for an overhaul at high-end wealth group St James’s Place, citing low returns. The investor’s small stake means CEO Andrew Croft may dismiss the salvo. But bringing costs more in line with rivals could give his $7 bln firm’s grubby valuation a boost.
AMD finds going on offensive carries a high price 27 Oct 2020 The chipmaker is buying Xilinx for $35 bln. The $9 bln premium is worth more than three times the net present value of savings from the combination. CEO Lisa Su’s record is good though, so there may be some merit to the deal. At a minimum it puts Intel in a more difficult place.
Corona Capital: Binge-watching, Gaming 27 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Streaming viewers like to binge-watch, but they are being stingy; a fresh surge of Covid-19 cases could be a boon for gaming developers.
Noel Quinn deftly sails HSBC into stiff winds 27 Oct 2020 A 36% fall in quarterly profit was better than feared thanks in part to choppy markets. The CEO’s plan to wring more fees out of customers is also welcome. Low interest rates are only one problem, though. UK, U.S. and Chinese authorities loom too large over the bank’s prospects.
BP’s investment case falls between two stools 27 Oct 2020 The $54 bln oil major’s shares have sunk further than peers in recent months. Boss Bernard Looney won’t mind if his renewable energy shift leads oil bulls to prefer Exxon Mobil. He might get more bothered if investors find rival Total’s green transition more compelling.
Santander’s global blessing may be a virus curse 27 Oct 2020 Quarterly earnings at the $34 bln Spanish bank rallied, helped by booming loans in Brazil. That justifies boss Ana Botin’s Latin America growth focus. But with over half of profit from states with high Covid-19 infection rates, her global reach may not remain an advantage.
The Exchange: IMF and sub-Saharan Africa 27 Oct 2020 The regional head of the International Monetary Fund, Abebe Aemro Selassie, joins Swaha Pattanaik to discuss how the Washington-based lender is helping hard-hit countries, debt difficulties, the need for reforms, and why policy choices are more limited than in advanced economies.
Ant’s $312 bln valuation puts faith in fast growth 27 Oct 2020 Both the Hong Kong and Shanghai shares priced with a lucky number eight. To achieve the symbolised prosperity, the Chinese fintech giant’s profit would have to double by 2022 based on the conservative 24 times multiple. Much rides on winning over customers and regulators alike.
Moutai’s charitable turn will be real market drag 27 Oct 2020 The Chinese liquor champion’s mediocre third-quarter results shaved $14 bln from its market cap on Monday. The $309 bln index heavyweight is giving handouts to local governments even as state investors dump shares the company gave them. Worse, there’s probably more to come.
U.S. election could be Twitter’s darkest day 26 Oct 2020 The $40 bln firm, Facebook and other online platforms can’t win in the Nov. 3 ballot. Banning political ads and premature claims of victory will be controversial and messy. Breakingviews imagines Jack Dorsey proposing one radical option to Mark Zuckerberg: a temporary shutdown.
Wicked big Dunkin’ deal more saccharine than sweet 26 Oct 2020 The Massachusetts coffee-and-donuts chain looks set to be gobbled up by Arby’s-and-Sonic owner Inspire Brands for $9 bln. Dunkin’ weathered the pandemic well enough. But the valuation is as gut-busting as one of its French crullers, and restaurant roll-ups are light on synergies.
Joe Biden is private equity’s tax boogeyman 26 Oct 2020 The White House wannabe aims to eradicate the perk that mints money for buyout barons. His broader plans would add to the pain for firms like Blackstone and KKR which restructured to exploit Donald Trump's tax cuts. Shareholders, clients and staff could end up at loggerheads.
Bayer’s M&A comeback is reassuringly expensive 26 Oct 2020 The drugs-to-seeds company is buying gene therapy specialist Asklepios BioPharmaceutical for $4 bln. It’s a rich price, but the German group needs to offset patent expiries and shake off the disastrous Monsanto deal. Expanding in a rapidly growing sector offers some protection.
Coke bottler serves up flat cross-border deal 26 Oct 2020 Europe’s main distributor of the iconic soda offered $6.2 bln for its Aussie peer, hoping to tap fizzier markets and expand beyond Coke. Though Coca-Cola is taking a discount for part of its 31% stake in the target, scant synergies fail to justify the premium for other investors.
Corona Capital: Mixed market messages, Chile votes 26 Oct 2020 Concise views on the pandemic’s corporate and financial fallout: Global stocks slumped on Monday as Covid-19 cases rose – yet some prognosticators are readying for major stimulus; and Chile has shown that pandemics don’t have to squash voter turnout.
SAP’s shifting goalposts puncture Covid-19 hopes 26 Oct 2020 CEO Christian Klein scrapped his 2023 financial targets, wiping 20% off the $174 bln giant’s market worth. New 2025 goals imply a large pandemic-induced boost to cloud computing, which may merit a higher multiple. Investors smarting from Monday’s selloff are apt to wait and see.