Goldman gently embraces both sides of hostile M&A 31 Mar 2023 The preferred adviser to reluctant takeover targets is benefiting from its broadened horizons. Working with aggressive suitors Public Storage and Emerson Electric helped keep bankers busy amid a 45% slump in deals. Merger culture has changed, as has Goldman’s broader strategy.
Americans indulge green at home, black abroad 31 Mar 2023 U.S. renewable power generation surpassed coal for the first time in 2022. But companies like Peabody Energy and Consol Energy are benefitting from exporting their dirty power source. Cleaning up the country's act, while exporting more filthy fuel, wastes part of this effort.
Trump charges could leave important fish unfried 31 Mar 2023 While unprecedented, the indictment of a former US president won’t directly affect America’s economic standing. But lawmakers have more urgent things to focus on, like the looming debt ceiling, and fixing flawed bank rules. Squabbling could push them to the back burner.
Swiss anger will sour UBS’s deal of the century 31 Mar 2023 Politicians and citizens are unhappy about job cuts and future risks arising from the bank’s $3 bln state-backed Credit Suisse rescue. Parliament fury may force returning CEO Sergio Ermotti to tweak the deal. Either way, an unsavory domestic whiff could hang over UBS for years.
ECB’s inflation battle has a 550 bln euro problem 31 Mar 2023 Christine Lagarde must keep tightening policy without triggering a bank crisis. She faces a test in June when a chunk of emergency loans comes due, increasing lenders’ funding costs. Targeted help, however, could ease financial risks and preserve the fight against high prices.
JD takes China tech spinoffs to awkward new level 31 Mar 2023 The $65 bln e-retailer will float two more units, bringing its listed businesses to five. The IPOs follow rival Alibaba’s planned breakup, a sign that Chinese giants are serious about unlocking value. It’s not clear, though, that the earlier JD deals have benefitted shareholders.
Google giggles at China tech’s shrinking act 31 Mar 2023 Investors like Alibaba’s plan to split six ways, hoping peers like Tencent follow. Yet Chinese online giants are already dwarfed by US colossi like $1.3 trln Alphabet. Smaller firms might be nimbler, but they’ll have less R&D funds and M&A firepower to take on the Americans.
Nickel could sap electric cars’ climate batteries 31 Mar 2023 Although EVs are less emissions-intensive than gas guzzlers over a vehicle’s lifetime, their supply chains produce more greenhouse gases. Battery ingredient nickel is among the culprits. Car and cell makers may be exposed as investors and watchdogs scrutinise carbon footprints.
EY’s faltering breakup plan tightens Gordian knot 30 Mar 2023 A plot to hive off the consulting unit from the audit practice has stalled. EY has two realistic alternatives: sell a slice of its advisory business, or stay intact and focus more on lucrative consulting work. The catch is that a failed breakup could still leave lasting damage.
California oil bill is industrial policy, refined 30 Mar 2023 A state agency will soon analyze oil firms’ profit data and penalize those that gouge consumers. That’s an improvement from the windfall profit tax proposed by Biden last year. Regulators win new tools for fighting corporate greed, and responsible companies dodge a blanket levy.
How post-2008 bank rules led to a 2023 problem 30 Mar 2023 After the last crisis, regulators pushed lenders away from fickle market-based finance to deposits instead. Yet Credit Suisse and Silicon Valley Bank showed that not all customer cash is stable. Applying the same fix again is impossible, which means the problem is here to stay.
Alibaba breakup sends positive vibes to investors 30 Mar 2023 The $265 bln Chinese tech giant is splitting into six pieces. In this Viewsroom podcast, Breakingviews columnists discuss how the move could be replicated by peers like Tencent and how Beijing’s business charm offensive is sending the right signals to China watchers.
Capital Calls: H&M, UK car goals 30 Mar 2023 Concise views on global finance: The $20 bln Swedish retailer’s investors seem to think the worst has passed; Britain has loosened its ambition to phase out combustion engine cars, but the big question is how many green vehicles will be made domestically.
Fiddly call-centre deal shows why M&A is so quiet 30 Mar 2023 Dealmakers have had a quiet start to 2023, given economic uncertainty and shaky debt markets. Concentrix’s $4.8 bln swoop on Webhelp solves many of those problems with a clever structure, including a convertible note. But it’s not a formula that would work in many other cases.
Ferrari’s green journey takes surprise turn 30 Mar 2023 Europe’s plan to support carbon-neutral fuels is good news for the $50 bln luxury carmaker, CEO Benedetto Vigna says on the Exchange podcast. It will allow the group to flog the roaring engines that made its fortune. Electric cars remain a goal, but self-driving Ferraris are not.
Bank rescue real estate turns from dowry to downer 30 Mar 2023 In 2008, failed lenders like Bear Stearns owned prime property that helped underpin value for buyers. But Credit Suisse sold off much of its real estate before UBS swooped. Its long-term leases may prove a headache as remote working shrinks demand for office space.
Cellnex could use an outsider with a sharp knife 30 Mar 2023 Hedge fund TCI has accused the Spanish tower operator of “mishandling” an ongoing CEO search. Once an M&A machine, the $27 bln firm needs to cut its debt load markedly. That requires a new boss with a fresh perspective, not an insider.
Alibaba hands parched dealmakers a glass half-full 30 Mar 2023 The $250 bln e-commerce giant’s six-way split will prompt bankers to dust off pitchbooks for peers like Tencent and Baidu, too. The bold can spread the net wider to carmakers and more. With M&A and other fees in a slump, it’s the best chance in a while to drum up business.
Investors put Starbucks in the grinder 29 Mar 2023 The coffee chain’s shareholders voted for an investigation into the way the company treats its workers. Had Starbucks proactively agreed to the proposal like Apple did, it could have saved its worker-friendly image. Instead, new boss Laxman Narasimhan starts on the wrong foot.
Bigger and louder choirs create M&A dissonance 29 Mar 2023 After Ritchie Bros struck its $7 bln deal to buy IAA, at least 10 shareholders, including Starboard and lesser-known Discerene, sang out about the transaction. Uncommon and first-time vocalists are on the rise. Expect bosses and boards to develop their own new song and dance.
CEO nostalgia won’t bring back the alpha 29 Mar 2023 Activist Carl Icahn wants Illumina’s Jay Flatley back at the helm of the US biotech firm. He’d be joining the zeitgeist: UBS and Disney have both reinstalled former CEOs too. Competence has value, but past performance doesn’t guarantee greatness. Long tenure brings its own risks.
Another cultish cost-saving formula gets off-track 29 Mar 2023 Like GE’s Six Sigma and zero-based budgeting at Kraft Heinz, the railroad version of efficiency has gone too far. It is being tested at $120 bln Union Pacific, where a pushy investor wants devotee Jim Vena to be CEO. New industry concerns suggest it’s time to slam the brakes.
Capital Calls: Apple arrives late to pay-later 29 Mar 2023 Concise views on global finance: The $2.5 trln iPhone maker is rolling out its U.S. “buy now, pay later” product into a much tougher, and riskier, market than when it first unveiled plans in June.
Boomerang UBS boss ticks several important boxes 29 Mar 2023 Sergio Ermotti is returning as CEO after less than three years. The suboptimal governance move highlights a dearth of senior banking talent. But Ermotti’s record of shrinking an investment bank – and his Swiss passport – will be vital in the tricky integration of Credit Suisse.
Switzerland casts Asian bankers in a rich light 29 Mar 2023 Credit Suisse’s blow-up will speed up a rethink about where crazy rich Asians will park $180 trln of household wealth. Global banks’ risk appetite is shrinking even as HSBC and others ramp up in the region via acquisitions. Rising giants like Singapore’s DBS and UOB will benefit.
Crypto hangs on by an unraveling thread 28 Mar 2023 U.S. agencies targeted Coinbase and Binance for how they engage with customers. A crypto deal is being blocked. A respected stablecoin lost its peg. As FTX founder Sam Bankman-Fried is charged with bribing Chinese officials, it’s clear digital currencies’ issues weren’t just his.
Busting through the brick wall barricading M&A 28 Mar 2023 Worldwide merger activity is down by about half this year to $470 bln, stymied by tough financing conditions, assertive trustbusters and more. In this Exchange podcast from New Orleans, JPMorgan’s head of M&A Anu Aiyengar debates downbeat dealmakers and the pockets of optimism.
Powell is leader of the free world – for now 28 Mar 2023 The Federal Reserve chair has ever-larger powers and responsibilities. If he raises rates, he could spark a banking crisis and complicate Joe Biden’s re-election bid. If he lets up, prices will stay high. Powell may stay the course, but Biden isn’t going to like it.
Alibaba drafts breakup blueprint for China tech 28 Mar 2023 The $228 bln e-commerce group is splitting into six units spanning logistics to games, which may be listed. That should unlock value for weary shareholders, and please regulators keen to control strategic businesses. If done right, pressure for Tencent to follow may rise.
Capital Calls: Syngenta IPO delay 28 Mar 2023 Concise views on global finance: The Shanghai Stock Exchange has canceled a hearing to review the agrichemicals group's listing plans, leaving investors fearing the worst in China.