Regulatory bottleneck is new M&A hazard 30 Sep 2021 An understaffed U.S. Federal Trade Commission is taking a longer and harder look at deals even as merger activity booms. That creates uncertainty and lengthier waits for companies. If the regulator doesn’t speed up, the future holds higher break fees and fewer successful tie-ups.
U.S. debt ceiling impasse warrants nuclear options 30 Sep 2021 If Republicans don’t agree to lift the threshold, real people will be hurt right away as the government cuts its outlays by perhaps 40%. Even a brief delay on debt payments risks a market crash. To avoid a catastrophic longer standoff, Democrats could threaten extreme steps.
Capital Calls: Biodiversity, Email, Gene IPO 30 Sep 2021 Concise views on global finance: Taskforce on Climate-Related Financial Disclosures gets a nature-based counterpart; Sweden’s Sinch clinches its fourth communication-software deal in seven months; a 40% bounce on Oxford Nanopore's market debut puts some life into London.
Europe’s chip champion can weather tech cold war 30 Sep 2021 ASML, which supplies machines to semiconductor makers, expects sales to grow 11% a year for a decade. That’s key to the Dutch company’s $310 bln market value. Despite restrictions on exports to China, countries seeking to secure chip supplies will provide an extra boost.
Easing crisis leaves Lagarde with tough transition 30 Sep 2021 The European Central Bank boss will have to fall back on a pre-pandemic bond-buying scheme once its emergency purchase programme runs out. The former is less flexible and may force Christine Lagarde to choose between flouting rules or curtailing support to the fragile economy.
Alphawave crash exposes fragility of UK tech hype 30 Sep 2021 The chip designer’s market value halved after a media report raised fears about related party transactions. Its punchy $4 bln IPO in May was a high point of London’s push to attract startups. Even then, a reliance on a handful of customers left a worryingly thin margin for error.
Viewsroom: Basket-case Britain; Gambling in Macau 30 Sep 2021 Trucker shortages, partly thanks to Brexit, have been blamed for all manner of UK economic hardships, from toilet paper scarcities to long queues at petrol stations. Ed Cropley and Peter Thal Larsen explain. And our columnists in Hong Kong discuss casinos and investment banking.
China’s power woes herald green transition strains 30 Sep 2021 Surging coal prices are largely to blame for shortages hitting factories and homes. Boosting fossil fuel imports may help but it jeopardises carbon-neutrality goals. It’s better to bear the pain now from resetting rates and weaning industrial polluters off cheap electricity.
Chancellor: Evergrande is all China’s woes in one 30 Sep 2021 The property developer’s spectacular collapse is the fruition of a massive real estate bubble, over-investment, excessive debt buildup and a wobbly credit system. As China’s bubble economy deflates, it will be replaced by a new one under President Xi Jinping’s absolute command.
Merger market could be headed for the big “meh” 29 Sep 2021 The post-summer period is often fruitful for M&A. This time round, the breakneck pace of deals has slowed. Regulatory uncertainty is partly to blame. Corporate chieftains also have their hands full with workforce dilemmas, supply chain drama, and general malaise.
NordicTrack owner sets up underdog IPO 29 Sep 2021 Fitness firm iFit isn’t as exciting as rival bike maker Peloton, and it doesn’t have as many subscribers. But sales are growing about as fast, margins are better and it sells bikes to gyms, an advantage as basements become a bore. Plus at $6.7 bln, it’s cheap compared to Peloton.
Guest view: Biden tax crusade puts privacy at risk 29 Sep 2021 A proposal to monitor the bank balances and payments of individual citizens may not raise more tax, but it would constitute a glaring invasion of personal privacy, warn Christopher Giancarlo and Jim Harper. The coming shift to government-issued digital money raises the stakes.
Capital Calls: Reliance Industries, Mediobanca 29 Sep 2021 Concise views on global finance: The Indian giant is trying to stave off an investor rebellion against its board appointment; top shareholder Leonardo Del Vecchio is proposing a governance shakeup at the Italian bank.
Stagflation jitters are at least half wrong 29 Sep 2021 High inflation and stagnant activity would be a noxious mix for markets. Central bankers have the tools, and likely the will, to combat the former. But when price pressures are a symptom of supply shocks, as now, monetary policy is a crude weapon that will lead to weaker growth.
Japan’s leaders stubbornly embrace status quo 29 Sep 2021 Fumio Kishida is set to replace Yoshihide Suga as prime minister after securing leadership of the ruling Liberal Democratic Party. His conservative fiscal tendencies make him an unpopular choice for investors. It is likely a setback for hopes of economic and market momentum.
Nordic retail robot IPO carries steep price tag 29 Sep 2021 AutoStore, the SoftBank-backed firm that sells automated warehouses, is listing in Oslo for up to $15 billion. It’s a bet on the boom in online shopping and grocery delivery. Yet the rich valuation relies on breakneck growth in a competitive market and downplays legal risks.
Evergrande restructuring is well-balanced so far 29 Sep 2021 Local officials are helping suppliers get paid and consumers receive flats bought in advance, soothing buyer anxieties. Bigger investors in the struggling Chinese developer will therefore shoulder bigger losses. It’s a tolerable mix of political expedience and financial sense.
Chinese scalpel will mangle cosmetic surgery boom 29 Sep 2021 New rules on medical-aesthetic ads and more suggest the scandal-plagued $43 bln sector is up next for an official makeover. Exacting beauty standards are piling stress onto the middle class while Beijing baulks about "effeminate" men. A broad crackdown stands to make things ugly.
Merck-Acceleron deal would come with side effects 28 Sep 2021 The $186 bln drug giant may buy the $11 bln Acceleron. That would help Merck diversify by adding two possible blockbusters. But Acceleron already has a partner for both: Bristol Myers, which could yet lob in a bid. If Merck does prevail, the mix risks an adverse reaction.
Biden has lost a key battle against the super-rich 28 Sep 2021 The U.S. president’s plan to hike top tax rates has been diluted after howls from the 1%. Rates will rise, but a bid to erase the difference between earnings and investment looks doomed, and Biden may raise $1 trln less than hoped. All the more pressure to spend it effectively.
Al Gore makes appropriately hedged bet on UK power 28 Sep 2021 Generation, co-founded by the ex-vice president, is pumping $600 mln into Octopus. That gives the UK energy firm a $4.6 bln valuation and insurance if its swoop on rivals caught out by surging gas prices goes awry. Yet first-mover status should limit Octopus’ downside anyway.
Morgan Stanley’s Asia shift signals new China era 28 Sep 2021 Long-time regional co-CEO and China boss Wei Christianson is retiring, leaving Gokul Laroia in sole charge. Few combine her banking nous and network. The Wall Street firm will now rely on unit heads for the mainland, suggesting a maturing market as well as one growing in clout.
Trucker shortage turbocharges haulage payments IPO 28 Sep 2021 Eurowag has built a lucrative business planning routes and handling payments for haulage firms. A dearth of drivers makes it more important to minimise empty trucks. Even a top-gear 1.7 bln euro valuation leaves mileage for investors in the Czech company’s upcoming London float.
Road to COP: Italy’s ecological transition chief 28 Sep 2021 Prime Minister Mario Draghi picked Roberto Cingolani, a trained physicist, from the private sector to lead the country’s mega-ministry combining environment and energy. As Milan hosts the warmup to the COP26, Cingolani discusses Italy’s role in the global decarbonization fight.
Capital Calls: U.S. debt, Hollywood, Blue Prism 28 Sep 2021 Concise views on global finance: Republicans have blocked additional federal borrowing, bringing a default closer; talent agencies CAA, ICM, and Endeavor take different strategic directions; private equity group Vista seems to be getting UK software group Blue Prism cheaply.
Sony and activist vie for prime Indian TV slot 28 Sep 2021 Broadcaster Zee Entertainment inked an $11 bln merger with the Japanese group’s film unit just days after 18%-owner Invesco called for a new board. Shares are up over 70%. The bad governance drama could result in a good strategic deal but it is an awkward plot.
Blackstone places safer bet in Las Vegas 28 Sep 2021 The buyout shop hit the jackpot in a $6 bln deal to sell its Cosmopolitan casino. The twist is that its own real estate arm is one of the buyers. By keeping the property with plans to collect rent, Blackstone offloads some risky exposure while taking better odds as the landlord.
Xi and Biden share common goal: bashing the rich 27 Sep 2021 Both leaders hope to tax the wealthy to help the middle class. The first bit is easier for one-party China. But it’s the United States that has low-hanging fruit when it comes to spending on education and infrastructure. The result: Each will get only part of what they want.
Polestar SPAC offers sober detour on EV hype road 27 Sep 2021 The Swedish electric-car maker is merging with Guggenheim Partners’ blank-cheque vehicle at a $20 bln valuation. A suitably racy revenue multiple needs turbocharged growth to avoid future potholes. But unlike rival Lucid, Chinese-owned Polestar at least has existing production.
Capital Calls: American healthcare exceptionalism 27 Sep 2021 Concise views on global finance: American male life expectancy at birth dropped over 2 years in 2020, the worst among 29 nations. That raises the stakes in a healthcare crisis among working-age people that even the mightiest U.S. employers have so far failed to solve.