Bayer has 29 bln reasons to say bye-bye to CEO 29 Mar 2022 Four years on, the 61 bln euro group’s Monsanto purchase has left it with cancer litigation and a clunky structure. Its current worth may be 32% less than the value of its bits, arguing for a breakup. That’s hard while boss Werner Baumann, the deal’s architect, is in place.
Germany’s oil embargo block is short-sighted 29 Mar 2022 Berlin is opposing a European ban on Russian energy. A gas embargo would take months to manage. But stopping oil imports now would be doable, while depriving Moscow of resources to fund the war. And Germany could afford the economic price.
CVC throws Telecom Italia a tricky lifeline 29 Mar 2022 The buyout firm wants to buy 49% of the troubled telco’s corporate business, which it values at 6 bln euros. A deal would help CEO Pietro Labriola trim debt. But it could complicate KKR’s push to take the group private. More crossed wires is the last thing shareholders need.
Bank of Japan stumbles into defensive minefield 29 Mar 2022 War, Covid-19 and an aggressive-looking Fed are conspiring against Governor Kuroda’s ultra-loose policy. The yen is plunging and government bond yields are up despite BOJ efforts. There’s no easy solution, but doing nothing is risky too.
Hong Kong-based PAG raises private equity IPO bar 29 Mar 2022 At a mooted $15 bln, the Blackstone-backed buyout shop would be valued at 30% of managed assets. Although a rich premium to U.S. peers like TPG, it’d be on par with recent deals involving Asian rivals. The test is if public-market investors assess the growth and mix the same way.
Russia’s gold reserves buy Putin a few options 28 Mar 2022 The Russian leader has a $140 bln stash of the yellow metal. Using it, however, can require shell companies and middlemen. Putin’s regime may have some experience helping Venezuela turn bullion into euros. Though U.S. prosecutors will give chase, the gold trail is hard to follow.
Joe Biden nods at fiscal discipline 28 Mar 2022 The U.S. president is pitching a 2023 budget that would make America's deficit about $1 trln smaller than it would otherwise become over a decade. One proposal is a billionaires’ tax. Though that's a tough political sell, the package is a modest tilt toward a healthier ledger.
American pigs also need pandemic readiness 28 Mar 2022 African swine fever is in the western hemisphere for the first time in 40 years. Unlike, say, in China, U.S. mainland hog farmers and bacon lovers benefit from a zero-ASF reality for now. But far more than the $23 bln of annual economic output is at stake if the virus gets in.
National Grid gas sale has green edge on Macquarie 28 Mar 2022 The $54 bln UK company is selling 60% of its gas pipelines arm to a group led by the Australian finance house. The $13 bln deal has financial benefits for both. But National Grid’s switch to electricity is more immediate than the buyers’ plan to pump hydrogen through the pipes.
Capital Calls: Singapore gets D.C. top treatment 29 Mar 2022 Concise views on global finance: A grateful President Biden is hosting the city-state’s prime minister, who backed sanctions against Russia in rare move.
Petrol forecourts can shift to fuel-free future 28 Mar 2022 Despite a push to phase out gas-guzzlers, Britain’s Motor Fuel Group may fetch 5 bln pounds. Selling pricey coffee to drivers charging electric cars offers relatively zippy returns. But beside the threat from home chargers, retailers are muscling in with the same idea.
Entertainment war debuts in Indian cinemas 28 Mar 2022 PVR and Inox’s $2.3 bln merger will combine the country’s top multiplex operators as a battle for content intensifies between Amazon, Disney, Sony, and Reliance. It’s not too pricey and just like cinemagoers love war movies, shareholders should enjoy this defensive deal.
Decamping auditors slam door on Chinese developers 28 Mar 2022 Shimao and Powerlong are the latest to lose PwC as the verifier of their books. It’s a little late for international examiners to be taking a stand, but mass switching to local firms will intensify scrutiny of the industry. The offshore borrowing market also should all but close.
Foreign cash fleeing China adds insult to injury 28 Mar 2022 Offshore investors are selling Chinese stocks and bonds while staying put in other emerging markets, reversing a trend that saw global funds increase their exposure. The vote of no-confidence risks more market volatility and slows Beijing’s push to woo stable institutional money.
On climate, SEC can dictate but market will decide 25 Mar 2022 U.S. plans for companies to disclose more on emissions are a guaranteed legal punch bag. But even if the SEC’s bid falls flat, and its edgier elements might, much of what’s outlined is helpful and relatively simple. If investors want it, change can come even when fiat fails.
Instacart’s painful price cut may not be enough 25 Mar 2022 The grocery delivery service firm slashed its valuation by nearly 40% to $24 bln. That’s partly a reflection of peers’ market prices. But based on sales, it’s still valued twice as high as DoorDash. With competition growing from Amazon and Walmart, a further cut may be in store.
Russian gas gets harder to buy, but easier to snub 25 Mar 2022 Vladimir Putin’s call for Moscow’s hydrocarbon customers to pay in roubles puts Europe in a quandary. Still, Washington and Brussels are fleshing out a valid Plan B to Kremlin gas. That implies the Russian leader’s power to make market prices go haywire may start to wane.
Dubai’s $34 bln utility float tees up IPO drive 25 Mar 2022 State-owned DEWA will be the emirate’s largest listing since 2007. Its pricing muscle and generous dividend are drawcards, as is the cheap valuation. That reflects the political desire for the debut to set the stage for follow-up IPOs, and puts rival regional bourses on notice.
Capital Calls: Gas stimulus 25 Mar 2022 Concise views on global finance: Direct payments to drivers are better than fuel tax cuts, but neither is ideal.
Nio prepares for gruelling financial driving test 25 Mar 2022 The electric-car maker’s loss almost doubled last year to $1.7 bln. Yet it wants to launch three new models and expand into Europe during a supply chain crunch. Its cash pile and manufacturing partner JAC will help. But Nio’s characteristic ambition will take it on a hairy ride.
Sea’s ‘Free Fire’ churns up Singapore-India ties 25 Mar 2022 New Delhi’s ban on the mobile game persists despite diplomatic intervention. The clash, tangled in Chinese tensions, casts a shadow over India’s relations with one of its biggest foreign investors. Rising nationalist sentiment on both sides will make rifts harder to heal.
Uber NYC cab deal turns lemons into lemonade 24 Mar 2022 The ride-hailing app is partnering with New York City taxis to make them available on the platform as a surge in gas prices threatens Uber’s ability to recruit drivers. Demand for rides is stepping up too. Joining forces with a once-bitter rival may help smooth the road.
Alphabet fiddles as app-store antitrust fire burns 24 Mar 2022 The $1.8 trln Google parent will let Spotify use its own payment service, skirting a 15% fee. The move piles pressure on rival Apple to do the same. But it’s just a pilot project and probably still includes a hefty charge. U.S. and EU regulators may force the duo to go further.
Markets may do Powell’s job for him 24 Mar 2022 The U.S. central bank chair is speaking aggressively about rate hikes. The Eurodollar yield curve implies it will lead to swift increases that will then be cut. Investors and companies respond to expectations by trimming spending and investing. That makes the Fed’s task easier.
GIF inventor made few rich, but billions happy 24 Mar 2022 Steve Wilhite, who died aged 74, created a way for images to be easily shared and used in websites. The patents lapsed, and his employer CompuServe slipped into obscurity, yet GIFs remain ubiquitous – marking their inventor as one of tech’s great accidental philanthropists.
The Covid effect: Sheds, Hong Kong, Conferences 24 Mar 2022 The pandemic continues to shape business and policy around the world. In this Viewsroom podcast, Breakingviews columnists debate a possible 21 bln euro bid for city-centre warehouses, the relaxing of restrictions in Hong Kong, and a recent conflab of M&A advisers in New Orleans.
ECB squeeze leaves room for fiscal war response 24 Mar 2022 The central bank is fighting inflation and cutting bond purchases, leaving European governments to shoulder the cost of the Ukraine war. That may add up to 4% of GDP to public debt loads inflated by the pandemic. But even with rising yields, national budgets can afford it.
Toshiba task becomes more Sisyphean 24 Mar 2022 The Japanese conglomerate’s shareholders rejected management’s breakup plan and a hedge fund proposal to solicit buyout bids. It augurs fresh fighting over the board and the strategy. Outside agitators have reason for optimism but the long fight keeps eating away at returns.
New Evergrande crisis may cue tougher intervention 24 Mar 2022 The property developer was largely left alone to fix its financial mess. The discovery of misused funds at a subsidiary heightens the risk offshore investors head to the courts. That makes it more likely China steps in. Its handling of defunct conglomerate HNA could be a guide.
Capital Calls: Renault out of Russia 24 Mar 2022 Concise views on global finance: Dire prospects for the sanctioned economy make the French carmaker’s decision to leave rational, but costly.