Daimler could be Elon Musk’s Time Warner 3 Dec 2020 AOL merged with the media group back in 2000, parlaying its bubblicious share price into an old-line business. Electric-car maker Tesla, worth an eye-popping $540 billion despite a puny 0.8% global market share, could do something similar. The Mercedes owner is the best fit.
Payments is a wrinkly bow on Walmart’s India deal 3 Dec 2020 PhonePe was an afterthought when the U.S. retailer bought it with Flipkart in 2018. Now the star money-transfer app is being partially spun out of the e-tailer at a $5.5 bln price tag. It’s a deliberately conservative valuation for a business with enormous potential.
Vaccine bottlenecks are main obstacle to recovery 3 Dec 2020 Rolling out Covid-19 jabs, as the UK will do next week, protects the vulnerable and lets authorities ease restrictions. But the logistical challenge means it could take a year to immunise two-thirds of the population. Other governments, too, will struggle with a sceptical public.
Viewsroom: Biden’s money team, Bank boss shuffle 3 Dec 2020 The American president-elect has put forward a diverse and competent team of people to oversee economic policy, including Janet Yellen at Treasury. Across the pond, European banks engage in a bit of CEO and chairman musical chairs. Breakingviews columnists dig in with Rob Cox.
Corona Capital: Chevron, Boeing, OPEC, Orange 3 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Chevron cuts spending, prudently; Boeing orders are a solid step; OPEC makes up its mind; and Orange’s Belgian deal has some juice.
Tui’s third bailout puts German taxpayers in shade 3 Dec 2020 Europe’s largest tour operator has secured a state-backed 1.8 bln euro rescue to ensure it survives until 2021. Shareholders face dilution but creditors get bailed out. By taking non-voting stock and capping any future stake, the government misses out on the benefits of recovery.
Macquarie plays it safe with U.S. takeover 3 Dec 2020 The Aussie financial conglomerate is buying asset manager Waddell & Reed for $1.7 bln in Shemara Wikramanayake’s first big deal since becoming CEO two years ago. It expands a business in her wheelhouse at a reasonable price. There is cleanup work to do, but it ticks enough boxes.
China delisting plan sinks teeth into wrong places 3 Dec 2020 A proposal to boot foreign companies off U.S. exchanges if they don’t comply with auditing oversight is on its way to becoming law. It’s a fair demand, but targeting CCP members misses the mark as does giving others a free pass. The bill goes both too far and not far enough.
Gary Cohn channels Goldman minus self-awareness 2 Dec 2020 The ex-COO is sitting on $10 mln the Wall Street firm wants back as a rap for its 1MDB scandal. Even if he’s on safe legal ground it doesn’t look good for him or for Goldman, which calls its staff “culture carriers.” Cohn’s former employer at least knows when a gesture is needed.
Fed avoids dent to its chain mail of independence 2 Dec 2020 The U.S. Senate passed over Judy Shelton’s nomination to the central bank’s board. A few Republicans joined Democrats in questioning her partisanship. The Fed would benefit from more diverse voices. But she was a bad fit for an institution already under political pressure.
DoorDash delivers mixed messages for Just Eat 2 Dec 2020 On the one hand, the U.S. market leader's $27 bln pre-IPO valuation suggests Just Eat got a bargain buying Grubhub. On the other, cut-throat competition led by DoorDash has cost Grubhub market share and profit. The American home-delivery recipe isn't yet long-term tasty.
Salesforce skins Slack deal with revenue synergies 2 Dec 2020 Mergers are often about cost cuts, but the impetus behind Marc Benioff’s $28 bln bid for Slack is so Salesforce can boost tech offerings. Microsoft is using messaging services to grow. This deal makes sense if Salesforce can increase revenue 13% – or prevent it from evaporating.
Higher U.S. inflation hopes finally look credible 2 Dec 2020 Market gauges of how consumer prices are expected to behave in coming years hit their highest in a year and a half. There have been false dawns before but 2021 may be different. Vaccines will help unleash pent-up demand, and policymakers are intent on ensuring a robust recovery.
Cox: Mediobanca could be UniCredit’s white knight 2 Dec 2020 Italy’s No. 2 lender was rocked by the ouster of its French CEO amid fears of government meddling. It needs new management, more fee income, scale and protection from Rome. Alberto Nagel’s smaller Milan investment bank offers all four. Come si dice “reverse merger” in Italiano?
Corona Capital: Merck sells Moderna stake 2 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: The U.S. drugmaker is banking its winnings on an investment in Covid-19 vaccine producer Moderna that dates back to 2015.
GardaWorld opens door for G4S escape 2 Dec 2020 The Canadian security firm raised its bid for the UK group to 3.7 bln pounds, having argued much less was fair on Monday. The new price is hardly a knockout either. CEO Stephan Cretier’s erratic handling of the offer and a possible counterbid give investors reason to hold out.
SoftBank derivatives U-turn fuels governance hopes 2 Dec 2020 CEO Masayoshi Son will ditch an unpopular options strategy, Bloomberg reported, only months after launching it. That’ll please investors who want the Japanese group to focus on asset sales and share buybacks. Their next target should be his $17 bln portfolio of technology stocks.
Chatty ECB has a communications problem 2 Dec 2020 Chief Economist Philip Lane has since March spoken with a series of financiers after policy meetings, his diary shows. A perception that a select few have privileged access is best avoided. The even bigger issue is why the central bank has to work so hard to land its message.
Healthcare IPO examines value of China’s big tech 2 Dec 2020 The unit of e-commerce giant JD priced its $3.5 bln offer at a reasonable 13 times sales. Virtual consultations and pharmacies are booming, supporting an official push for a healthy China. It’s a timely reminder that powerful internet platforms have valuable uses for Beijing.
Xiaomi $4 bln cash raise exploits peak market 2 Dec 2020 The $81 bln Chinese smartphone maker is using its 143% share rally this year to raise $4 bln - a record Hong Kong follow-on. Shares are now pricier than Apple’s, which should please founder Lei Jun, a Steve Jobs imitator. He has his work cut out justifying that valuation.
Will ICE let another big fish wriggle away? 1 Dec 2020 The $59 bln stock exchange operator watched LSE grab Refinitiv, and now stands on the sidelines as S&P gobbles up IHS Markit. It has proven to be a disciplined deal-doer, and IHS is relatively expensive. Still the companies could fit, and ICE may be tempted to jump in.
Biden’s diverse cabinet is only a first step 1 Dec 2020 Janet Yellen may be the first woman to lead Treasury in a cabinet that better reflects America. The government has a sad record on that front. The next task is to tackle related challenges like women leaving the workforce, financial inclusion and income inequality.
Fed chief makes case for non-partisan high ground 1 Dec 2020 Jay Powell testified in the Senate with Treasury Secretary Steven Mnuchin. Lawmakers from both parties tried to pull him into their battles but he stuck to his script. Mnuchin played nice too. Detaching monetary policy from politics is an increasingly fraught but worthwhile task.
VW boss dilemma is about more than Herbert Diess 1 Dec 2020 The $90 bln carmaker’s CEO wants a contract extension beyond 2023. Diess is gaffe-prone but has the right strategy for moving to electric vehicles and extracting efficiencies. His contract debate is a proxy for whether VW’s board can face down unions trying to muddle that shift.
Airbnb IPO price deserves more stars than DoorDash 1 Dec 2020 The two are seeking similar IPO valuations: up to $30 bln for the home-sharing app and $27 bln for the delivery firm. That doesn't compute. Airbnb’s scale and proven cash-generating ability are more appealing. Moreover, the pandemic’s end will boost Airbnb and hurt DoorDash.
Regulatory loophole lets SPAC outlooks fly for now 1 Dec 2020 Some firms listing shares via blank check vehicles do so with ambitious projections. That may be partly because an SEC technicality offers legal protection. Public disclosures are sufficient to give investors fair warning. But the advantage over traditional IPOs may not last.
The Exchange: Eating worms is good for the planet 1 Dec 2020 Growing global demand for food is putting a squeeze on available land and one French startup says it has the answer: indoor insect farming. Ynsect co-founder Antoine Hubert on how growing mealworms for fertilizer will benefit the environment – and eventually our diets too.
Corona Capital: Bitcoin, Lonely Planet 1 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Bitcoin hit a record, buoyed by inflationary fears, new fans and plain old speculation. Meanwhile Lonely Planet has found a new owner, as it wrestles with an anything-but-lonely market for travel information.
Credit Suisse wins latest bank boss musical chairs 1 Dec 2020 The group hired Lloyds’ António Horta-Osório as its next chairman. Perennial CEO contender Jean Pierre Mustier will soon be up for grabs after leaving UniCredit. Passing around talent works for those who woo top names, but smacks of an industry struggling to bring in fresh blood.
Philip Green’s retail roulette hits the little guy 1 Dec 2020 The Monaco-based tycoon’s Arcadia empire has collapsed. His decision to pay wife Tina a 1 bln pound dividend took chips off the table, but left the Topshop owner poorly placed for the internet. With pensioners and small suppliers on the hook it’s a stark lesson in moral hazard.