U.S. Bancorp’s $8 bln deal is the mostly good kind 21 Sep 2021 The acquisition of Mitsubishi UFJ’s retail bank castoffs in the U.S. looks a bold move after President Biden called for tougher scrutiny of mergers between lenders. But the finances stack up and, save nitpicks, so does the case for uniting smaller banks to challenge the giants.
Canadian election achieves only Trudeau reprise 21 Sep 2021 The prime minister’s Liberals managed only about the same-sized minority as before the election he called two years earlier than needed in the hope of scoring a majority. That's a mark against his political credibility. But it means more of the same for Canada’s economy.
Funky fund IPO puts premium on Goldman factor 21 Sep 2021 Petershill, which owns stakes in buyout groups and hedge funds sourced by the Wall Street firm, is targeting a value up to $5.9 bln. That’s much more than the value of its assets, and closer to a listed investment manager. Investors are placing their faith in Goldman’s contacts.
Capital Calls: Airline partnerships, Labor market 21 Sep 2021 Concise views on global finance: An alliance between American and JetBlue could fall foul of the U.S government, even though Washington could benefit from it; U.S. Bancorp’s promised savings in its deal to buy MUFG Union may be easier than usual to achieve without firing people.
UK bus groups bet on future bumps in the road 21 Sep 2021 National Express, the 1.4 bln pound transport company, is in talks to buy rival Stagecoach for over 400 mln pounds. An 18% premium in shares isn’t particularly attractive. But given rising labour costs and a potential slow recovery of traffic, neither is the alternative.
Universal spin makes case for even slimmer Vivendi 21 Sep 2021 Tycoon Vincent Bolloré has enriched himself and other shareholders by listing the $53 bln label behind artists like Taylor Swift. But his remaining media business still trades with a hefty discount. Offloading his Italian holdings, and putting a stop to M&A, would help fix that.
Wall Street will learn to love Evergrande’s crash 21 Sep 2021 New York woke up to the developer’s problems on Monday, moving stocks and bond prices. Offshore exposure to Evergrande debt is opaque; a Chinese real estate crisis would be painful. But contagion risk is limited, and a housing correction has upsides for frustrated foreign banks.
Road to COP: Denmark’s green giant 21 Sep 2021 Orsted is one of the most highly valued players in the global energy transition. Chief Executive Mads Nipper’s main job is to ensure things stay that way as demand for its wind power intensifies. Ahead of Glasgow’s critical COP26 conference in November, he chatted to George Hay.
Big miners are steeled against falling iron ore 21 Sep 2021 The mineral’s price has collapsed in two months, bucking inflationary trends. Rising supply, China’s cooling economy and changing consumer spending habits portend a further decline. Capital discipline and diversification will cushion the blow for BHP, Rio and Fortescue.
Pru’s $3 bln Asia shift sets up new AIA battle 21 Sep 2021 The London-based insurer is completing its pivot to the fast-growing region by selling new shares in Hong Kong. The Fragrant Harbour is already home to the $137 bln rival that Prudential failed to buy a decade ago. Now they’re set to compete over punchy valuations.
Crypto gives watchdogs a new risk checklist 20 Sep 2021 The SEC boss wants to regulate the $2 trln market. Standard financial dangers like inadequate liquidity or capital exist. But 51% attacks, chain splits, hacks and such could cost people cash and confidence. Policing cryptocurrencies requires more than calling them securities.
BP’s hard baptism goes with transition territory 20 Sep 2021 The UK oil major has sold choice assets to control debt since embarking on its green pivot a year ago, and CEO Bernard Looney just replaced the boss of his key renewables arm. If he needs a boost, Danish wind star Orsted looked equally bumpy at a similar stage of its evolution.
Capital Calls: Vaccinating kids, U.S. eases travel 20 Sep 2021 Concise views on global finance: Pfizer says its Covid-19 jab is good for children, paving the way for more parents to be able to work; Joe Biden is finally allowing vaccinated Europeans to visit the United States – a boost for airlines, but only a step towards the old normal.
UK power market deficiencies flash red at bad time 20 Sep 2021 Britain may spend hundreds of millions of pounds propping up its energy sector. Soaring prices are a global problem, but the UK has a more liberal market and fewer alternative power sources. It’s a poor look as Boris Johnson prepares to lecture others on cutting carbon emissions.
Aussie subs are lightning rod for global tensions 20 Sep 2021 French ire at losing a $40 bln defence contract to America and the UK may jeopardise an EU trade pact with Canberra. Frictions between allies make it harder to form a united front against China on commerce. And the new security pact hinders attempts to thaw Sino-U.S. relations.
Guest view: Hold auditors to account on climate 20 Sep 2021 The risks of global warming are missing from companies’ financial statements. Accounting firms must share the blame alongside directors, writes Natasha Landell-Mills of Sarasin & Partners. Investors have the power to demand better, while governments can help speed the shift.
Shinsei poison pill is acid test for Tokyo reforms 20 Sep 2021 The $4 bln lender wants to thwart online rival SBI’s push for effective control by diluting the unwelcome bidder’s stake. Voting it down is a no-brainer, not least for the government: Its 22% holding is under water and its campaign for better governance could do with a boost.
Beijing sets planned fires to save property forest 20 Sep 2021 Officials are allowing developer Evergrande teeter on the edge of default as the real estate sector skids. It’s a risky attempt to scorch speculators in an industry used to bailouts, but without incinerating the wider economy. The heat will test the government’s pain tolerance.
PR firms step into big-ticket merger lull 17 Sep 2021 Global dealmaking hasn't yet surged after America's Labor Day holiday. It may yet happen. In the meantime two big M&A communications firms, WPP-backed Finsbury and Sard Verbinnen, are considering a merger of their own. The combo would get a top league-table spot to shout about.
State Street-Invesco deal may leave both in limbo 17 Sep 2021 On paper, a tie-up between their asset management businesses looks valuable. Cost cuts are fairly easy and taking out a competitor has merits in a commoditized business. But fees will keep falling, and even putting their $5 trln of assets together won’t supercharge growth.
Capital Calls: China/TPP, Flavourings, Chill-boxes 17 Sep 2021 Concise views on global finance: China formally applies to join the Pacific trade pact; EQT-owned Azelis has a strong market debut; Sweden’s Dometic is shelling out a cool $677 mln for Texan chill-box maker Igloo.
World Bank has a shareholder-engagement problem 17 Sep 2021 Leaders, including now-IMF head Kristalina Georgieva, pressured staff to boost China’s ease of doing business ranking, a probe said. This isn’t realpolitik mitigating inherent U.S. bias. Such tactics detract from the bank’s work, damage credibility and impair its future role.
Gene hunter IPO is missing link in British biotech 17 Sep 2021 DNA sequencer Oxford Nanopore is eyeing a UK float, worth perhaps $5 bln. Shunning the bigger U.S. market looks bold, but the company’s niche position in a hot sector will help. While that’s hard to repeat, a success would boost London’s appeal for other life science groups.
Spain’s utility goof is thin end of net-zero wedge 17 Sep 2021 Madrid’s $3 bln raid on the coffers of its power sector is a clear climate-change own-goal. The political sensitivity of energy prices means it won’t be Europe’s last. The bigger risk is Brussels watering down the carbon-trading scheme partly responsible for gas prices soaring.
Three’s a good crowd in Indonesia telecoms deal 17 Sep 2021 Combining CK Hutchison’s local 3 unit with Ooredoo’s Indosat produces a $6 bln No. 2 player and synergies of $400 mln. If past industry tie-ups in similar markets are a guide, the Hong Kong and Qatari groups’ deal will also lift rivals’ revenue and cut their costs too.
Review: Riches to rags with the red aristocrats 17 Sep 2021 Desmond Shum’s wife became one of China’s wealthiest women via deals with the elite, then vanished in 2017. “Red Roulette” tells her story and concludes distrust of entrepreneurs is a feature of the system, not a bug. If so, only an economic crisis will end the current crackdown.
Emerging economies face stages of inflation grief 16 Sep 2021 Central banks’ reactions to rising prices come in three steps, BNP Paribas reckons: denial, acceptance, and action. Brazil and Chile are further along, having hiked rates quickly as pressures mounted. Investors will prefer them to countries stuck in the first stage, like Turkey.
Remitly cash-transfer IPO names a high-wire price 16 Sep 2021 The fintech firm that helps immigrants send money home could value its shares at up to $7 bln. Its founders have hit on a genuine need – there’s a $500 bln market for global remittance payments. Yet vast competition and lack of profit make this an expensive kind of transfer.
Federer’s sneaker IPO sets blistering pace 16 Sep 2021 Shares of On, backed by the tennis legend, soared 50% on debut, valuing the running-shoe maker at $11 bln. Rapid sales growth supports the steep valuation. But On has plenty of rivals, and its early success in China may fall foul of Beijing’s hostility to foreign brands.
Bolloré gives coup de grâce in French tycoon spat 16 Sep 2021 Gallic raider Vincent Bolloré may buy publisher Lagardere for 4.6 bln euros, ending a battle for control of the Paris Match owner also involving LVMH boss Bernard Arnault. His Vivendi can make a healthy return, while CEO Arnaud Lagardere at least gets to come along for the ride.