Flutter makes timely bet on Italian online boom 23 Dec 2021 The UK bookie is buying Milan-based rival Sisal from buyout fund CVC for 1.9 bln euros. That’s a cheap way in to a large gaming market. With its money-spinning national lottery and pandemic-driven popularity, Sisal offers prompter returns than Flutter’s long-term U.S. punts.
Viewsroom: Some of our 2022 predictions, Part One 23 Dec 2021 Look for an end to the cult of revenue and another milestone for Microsoft. As net-zero efforts falter, investors ready a Plan B. Riyadh becomes strangely appealing. The World Cup pays dividends for the Gulf. And chips become Taiwan’s green calling card. Our columnists explain.
Capital Calls: Intel in China, Covid-testing M&A 23 Dec 2021 Concise views on global finance: The chipmaker apologizes over Xinjiang to protect its business in the People's Republic; Quidel's deal to buy Ortho Clinical Diagnostics for $6 bln provides some future-proofing – and a windfall for private equity firm Carlyle.
Tencent sets stage for empire tidy-up 23 Dec 2021 The Chinese giant is sitting on a $185 bln investment portfolio that confuses investors and might bother regulators. Its decision to return most of a $19 bln stake in e-commerce ally JD to shareholders makes strategic sense and is financially savvy. Other sales could follow.
Ant will be best among China’s BAD bunch 23 Dec 2021 After a brutal year for tech, ByteDance, Ant and Didi will spearhead the sector’s recovery. A shaky ad market looms for the restructured TikTok owner, however, while the ride-hailing company faces rising driver costs. Jack Ma’s fintech outfit has the clearest path ahead.
Flying car SPAC paves pristine highway in the sky 22 Dec 2021 Embraer’s airborne taxi unit Eve is going public by merging with Zanite Acquisition. It ticks every box for a blank-check deal in the red-hot electric vehicle market, including a long list of pre-orders and blue-chip backers. The only problem is that its market doesn’t exist yet.
Consumer giants will be in “plastivist” crosshairs 22 Dec 2021 Expected to double by 2030, plastic pollution will create financial risks for companies like Coca-Cola and PepsiCo as countries introduce more single-use bans and taxes. Emboldened by the defeat of Exxon over reducing its carbon footprint, activists will target consumer giants.
Nordic $20 bln deal sets high bar for oil mergers 22 Dec 2021 Aker BP is acquiring Lundin Energy’s fossil fuel assets using cash and stock. Both sides emerge with a stake in a low-cost big hitter, better able to negotiate oil’s decline. The billionaire Lundin brothers get a smoother path out of the sector, and arguably a small premium.
Combustion engines are carmakers’ toxic assets 22 Dec 2021 The likes of Volkswagen and GM are shifting to battery vehicles while petrol-powered rides die out. Engine units are a drag on valuations, like lenders’ ropey assets after the 2008 crisis. Hiving them off into a “bad bank” would please investors and generate much-needed savings.
Delivery Hero U-turn shows bleaker times for tech 22 Dec 2021 The $28 bln food delivery group is leaving the German market after less than a year. However embarrassing, the move looks rational given the country’s cutthroat competition. Rising interest rates and more volatile markets mean loss-making companies need to keep investors sweet.
Shipping giants will plot course for landbound M&A 22 Dec 2021 Soaring container fees pushed the valuations of seaborne transport companies to record highs. Those trends will reverse in tandem. Still, with sacks of cash on board, ocean-goers like Maersk can buy landlubbing logistics rivals in preparation for the next supply-chain crunch.
Qatar’s World Cup will pay Gulf-wide dividends 22 Dec 2021 After an awful lead-in, expectations for soccer’s showcase event in 2022 are low. Even so, the tiny emirate’s status will likely benefit. Provided Covid-19 is under control, the jamboree should also boost a regional economic recovery that has lagged other parts of the globe.
Rio and BHP wrestle with green M&A conundrum 22 Dec 2021 The two rivals are fighting over access to battery metals, including stakes in volatile startups. BHP just withdrew from a pricey battle for a wannabe nickel maker, but Rio is pressing on with an $825 mln bid for a nascent lithium firm. Investors are wise to be wary.
Capital Calls: Hedge fund fine 22 Dec 2021 Concise views on global finance: Britain’s FCA fines BlueCrest Capital 41 mln pounds, a third of the fund’s U.S. penalty.
Toshiba clears path for big 2022 Japanese buyouts 22 Dec 2021 The $18 bln conglomerate plans to split, but a takeover bid betrayed private equity’s voracious appetite in the country. A few dozen chunky companies suit the LBO financial model, per a Breakingviews analysis. Closer inspection suggests a tempting target among them is Ricoh.
Brace for a $600 bln Chinese escape from New York 22 Dec 2021 Mainland-based companies with U.S. listings face regulatory fire from both Beijing and Washington. Retreats are accelerating, as ride-hailing outfit Didi joins the exodus mere months after its $4 bln IPO. Hong Kong offers one clear route, but there will be a wave of buyouts too.
Canada’s weed lead is running out of puff 21 Dec 2021 The country’s homegrown outfits are angling for the U.S. market, which could be worth $40 bln a year by 2026. The high after Ottawa's early legalization of cannabis is fading, however. Canadian players in the pot sector need to act soon to make the most of the remaining buzz.
Private equity will be potent Hollywood antihero 21 Dec 2021 Blackstone’s deal with Reese Witherspoon in 2021 positioned it as a challenger to video streaming services. Buyout firms have the money and talent handling skills to make it in Tinseltown. But to make the math work, their future customers need to remain in good shape too.
Rishi Sunak picks bad time to play Scrooge 21 Dec 2021 Britain’s finance minister has offered 1 bln pounds to companies hit by the new Omicron variant. The package looks meagre compared to his previous offerings and France’s support measures. Given the UK is raising rates, Sunak could have deployed a bit more fiscal firepower.
Bolloré’s happy Africa exit hints at more deals 21 Dec 2021 French tycoon Vincent Bolloré may sell his African logistics business to shipping group MSC for 5.7 bln euros. It’s a rich price for an asset tainted by a bribery scandal. He could use the cash to buy more cheap shares in his media group Vivendi, or his own investment company.
Capital Calls: Nikola’s SEC collision damage 21 Dec 2021 Concise views on global finance: The electric-truck maker is paying the U.S. securities watchdog $125 million. It’s a big dent but, given the stakes for SPACs and their targets, may only mildly discourage cheerleaders from taking the step from hype into fraud.
Riyadh will flip from No-Go to FOMO for business 21 Dec 2021 Lifestyle reasons mean bosses have long preferred Dubai to the Saudi capital as a Gulf HQ. A mix of the kingdom’s financial promise and government strong-arming means that could start to change. The city’s social scene is already slowly making it less of a punishment posting.
Live now, pay later is fintech’s latest extension 21 Dec 2021 Instalment financing, rebranded as “buy now, pay later,” has been the hot consumer financial innovation powering groups like Klarna and Afterpay. Look for the next iteration to entice consumers beyond shopping and leisure, including doctor’s visits, utilities and even taxes.
Turkey’s lira prop-up plan is dangerous 21 Dec 2021 President Tayyip Erdogan is guaranteeing deposits against local currency drops. It’s tacit admission Turkey’s banks aren’t immune to fallout from his odd views on inflation and interest rates. Details are fuzzy but putting taxpayers on the hook for the lira is asking for trouble.
China celebrity crackdown is tech’s horror show 21 Dec 2021 "Queen of livestreaming" Viya was fined $210 mln for tax evasion and had her social-media accounts shut. Investors wiped up to 12% off platform providers like Bilibili and Alibaba. The effect on the fast-growing $300 bln influencer market suggests that underestimates the risk.
The Exchange: Australian Treasurer Josh Frydenberg 21 Dec 2021 With an election looming early next year, the Liberal Party’s deputy leader discusses everything from booster shots to Big Tech, climate change to China, immigration to inflation, and more. He tells Jeffrey Goldfarb how his country can overcome the many economic challenges ahead.
Booze to batteries will measure China’s transition 21 Dec 2021 Distiller Kweichow Moutai overtook lender ICBC as the country’s biggest company by market cap in 2020. President Xi Jinping’s policy upheaval, along with rapidly changing investor attitudes, augur a new champ for 2022. Look for CATL to ride the electric-vehicle craze to the top.
Biden and business are midterm election pair trade 20 Dec 2021 The U.S. president handed corporate chiefs a good year – his moves to help the economy helped them too. If his power wanes after 2022’s Congressional elections, Biden will struggle to wield the stick meant to follow the carrot. A weaker White House means a stronger hand for CEOs.
Davos delay will stoke gabfest demand 20 Dec 2021 January’s Swiss conflab is off, for the second year running. In 2021, Zoom calls and rival events like COP26 raised the risk Davos could lose its relevance. In 2022, enough bankers were looking forward to the slopes to imply that a summer event will still get takers.
BMO’s U.S. bank deal is no slam dunk in Washington 20 Dec 2021 The $67 billion Canadian lender is buying Bank of the West from BNP Paribas. Combining banks smaller than America’s four giants makes sense, and the Fed approved three deals last week. But some Democrats in D.C. have merger phobia, and the regulatory regime is in flux.