Meituan delivers food slathered in EV spice 1 Dec 2020 The $220 bln Chinese food delivery group saw earnings rise 374% in the third quarter, mostly thanks to an equity stake in an electric car maker. Blistering portfolio gains only emphasize the bland performance of Meituan’s core business – and its expensive share price.
China’s lengthening lowball list lures lawyers 1 Dec 2020 A bid to take $4.8 bln China Biologic private is the latest underpriced offer for a U.S.-listed Chinese firm. Cayman Islands’ dockets are filling up with shareholder complaints about similar deals. Miring transactions in lawsuits may force acquirers to pay more up front.
CEO sudden exit leaves UniCredit exposed 30 Nov 2020 Jean Pierre Mustier is resigning from Italy’s second biggest bank after clashing with the board over M&A. He succeeded in cleaning up the lender but did not restore it to growth. His successor faces a tricky merger with Monte Paschi even as the bank is losing ground at home.
GM takes weak middle road with banged-up Nikola 30 Nov 2020 The $65 billion automaker says it will sell its fuel-cell tech to the troubled zero-emissions-truck company, but has shelved plans to take an equity stake. Cutting ties or doubling down with Nikola, whose value halved since early September, would have been bolder choices.
Salesforce is on back foot in Microsoft WFH battle 30 Nov 2020 Marc Benioff’s company may buy $24 billion profitless Slack to bolster its software offerings. Shareholders may give Salesforce the benefit of the dealmaking doubt. But its relatively smaller size makes building its portfolio harder and buying much more important.
Facebook squeezes in M&A play before game turns 30 Nov 2020 The $791 bln social network bought customer-relations platform Kustomer, which could be worth more than $1 bln. Even with all the pushback, regulatory reviews under U.S. President Donald Trump will be easier than successor Joe Biden. Its streak of buying startups is ending.
Janet Yellen will bring back benign dollar neglect 30 Nov 2020 President-elect Joe Biden’s Treasury secretary pick is going to have less sway over the currency than she did as Fed boss. Yellen is likely to stick to bland mantras and focus on getting fiscal policy right. That will be a welcome change from the tack taken under Donald Trump.
S&P’s IHS swoop opens door to messy bidding war 30 Nov 2020 The U.S. index giant has offered to buy its domestic rival for $44 billion including debt. The deal brings synergies and scale in the hot area of financial data, but the returns look skinny. And the premium is not big enough to see off a counter bid from the likes of ICE.
Lloyds CEO switch has message about HSBC strategy 30 Nov 2020 The UK lender’s next boss will be Charlie Nunn, who runs wealth and personal banking at its rival. He’s well-versed in technology and fee-based units – key priorities for Lloyds. The move may also reflect the challenges of overseeing HSBC’s global retail sprawl.
Corona Capital: Cyber Friday and Monday 30 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Online holiday shopping hits new records.
Taiwan chip takeover tests German tech defences 30 Nov 2020 Silicon wafer maker GlobalWafers wants to buy Munich-based Siltronic for 3.8 bln euros. The deal will consolidate an oversupplied industry and shore up the German group at a decent price. But it ultimately runs counter to Berlin’s drive to keep research and manufacturing at home.
France picks wrong tax fight with United States 30 Nov 2020 Finance Minister Bruno Le Maire wants President-elect Joe Biden’s administration to help overhaul rules on how digital services are taxed. A global minimum levy on all firms is more likely to win U.S. support, and will raise more cash. Europe’s tech-bashing is counterproductive.
Pinduoduo rises to China’s grocery challenge 30 Nov 2020 The e-commerce company unveiled plans to raise as much as $6.1 bln to expand in fresh food. Competition is fierce and building out logistics will be costly, but its model of matching farmers to shoppers gives it an edge. And boss Chen Lei has successful experience as an underdog.
India’s frugal crisis could prove a false economy 30 Nov 2020 A GDP contraction of 7.5% points to a faster-than-expected recovery, as manufacturing swung back to growth. Government stimulus has been tepid, however. That may yet lead to more harmful virus after-effects, unless India can capitalise on a vaccine edge it has over most nations.
Corona Capital: Scotland, EU impasse, Amazon 27 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Scottish independence gets a viral shot in the arm; Poland and Hungary take a united stand on the European Union’s recovery fund; and the online retail giant delivers a modicum of Christmas cheer to workers.
Sabadell takeover is still only a matter of time 27 Nov 2020 The Spanish lender broke off takeover talks with larger rival BBVA after rejecting an offer worth 2.5 bln euros. Cost savings potentially worth double that mean a deal still makes sense. Boss Jaime Guardiola must hope a vaccine-led rebound allows him to demand a higher price.
AstraZeneca’s messaging warrants a review, too 27 Nov 2020 The $134 bln drug giant may do a new trial of its Covid-19 vaccine to clear up uncertainties over its effectiveness. Even if rivals’ look better, AstraZeneca has a good story to tell. Still, a share price dip this week reflects that overegging results is not where you want to be.
UK mimics Big Tech in quest to reduce its clout 27 Nov 2020 Prime Minister Boris Johnson is setting up a special unit to police dominant firms like Facebook. A sweeping mandate, and the ability to act with tech-like speed, raises the risk of overreach. It’s still an upgrade on the ponderous, court-based approaches of the U.S. and Europe.
Cox: Swiss firms get too global for local britches 27 Nov 2020 From ABB to Zurich, corporations extended their reach in ways that brought outsized pride and prosperity. Now a referendum might make them liable for human rights abuses abroad. Whatever the result, it’s a useful reminder companies need to avoid losing sight of their local roots.
Indonesia builds sovereign fund with daring design 27 Nov 2020 Buyout firms and Gulf nations are being wooed to invest $15 bln in a government-backed mashup of Singaporean and Indian models. It’s an ambitious effort to finance President Joko Widodo’s development plans, but also faces limits on how much outside money will take the plunge.
Beware Chinese used-car dealer’s sticker price 27 Nov 2020 Kaixin Auto is riding electric-vehicle enthusiasm with an odd plan to merge with e-commerce outfit Haitaoche. After going public by way of a shell company in 2018, just 2% of its shares are freely traded. The 2,300% rise in market cap requires a closer look under the hood.
EDF shares’ power surge need not be a one-off 26 Nov 2020 The $44 bln state-owned utility has outperformed rivals in the last six months. A deal to secure higher nuclear prices would repair EDF’s main arm and enable CEO Jean-Bernard Levy to mull a renewable energy spinoff. That could boost the company’s value by over a half.
Italy finds tax trick to prettify risky bank M&A 26 Nov 2020 Rome is letting lenders turn past losses into fiscal credits if they merge. The capital boost may make shaky state-controlled Monte Paschi more appealing to buyers such as UniCredit, without breaking state aid rules. But even healthy groups, like Credit Agricole or BPM, may gain.
Lowly Europe bank values will outlast dividend ban 26 Nov 2020 Big lenders blame frozen payouts for depressing share prices, down 17% on average this year. But the selloff broadly matches the decline in profit forecasts for 2022, suggesting ultra-low interest rates are to blame. Even if dividends return, discount valuations may persist.
Norway’s offices are prize in $3.4 bln bidding war 26 Nov 2020 Sweden’s Castellum launched an offer for Entra days after the Oslo-based group rebuffed a bid from real estate rival SBB. Reliable government tenants and a relatively stable economy are alluring in a sector ravaged by the pandemic. But the bidders will struggle to create value.
Corona Capital: Skis, Italian banks, Dividends 26 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Europe’s hopes for a common ski policy hit a mogul; Italian lender Credito Valtellinese faces a lonely bidding war; Aviva’s payout cut is less stingy than it looks.
Kiwis test limits of overburdened rate setters 26 Nov 2020 New Zealand Finance Minister Grant Robertson has suggested the central bank, which targets inflation and employment, might consider taking house prices into account when setting monetary policy. Interest rates are a blunt instrument that can’t hit too many goals at once.
Alibaba and Hong Kong celebrate happy anniversary 26 Nov 2020 Both have been rocked in various ways in the year since the Chinese tech titan completed its landmark $13 bln secondary listing. At the same time, more companies have followed suit and boosted the city’s trading volume. Benefits may keep accruing if indexes retrain their sights too.
UK economy beds down for slow, sluggish recovery 25 Nov 2020 Finance minister Rishi Sunak is set to hike borrowing to 394 bln pounds to pay for the pandemic. New savings from foreign aid and freezing public sector pay will do little to help the economy that is only set to grow 5.5% next year. A no-deal Brexit would make matters worse.
Trump could box Biden into a corner on China 25 Nov 2020 The U.S. president’s mainland-bashing will go on until he steps down. He could impose sanctions on financial firms linked to a Hong Kong blacklist, expand a ban on investment or even restart a trade war. His successor would be left with little room to leave his own mark.