Deflation will help big grocers gobble up minnows 29 Dec 2023 Supermarkets like Walmart and Tesco are expecting goods prices to finally fall. That will help larger chains to cut shoppers’ bills by putting pressure on suppliers such as Unilever. Smaller rivals may find it harder and end up losing customers, making them ripe for takeovers.
Microsoft will finally make its mark in mobile 29 Dec 2023 The software giant has famously tripped itself up in smartphones for years, but boss Satya Nadella is primed to play catchup. His Activision and OpenAI deals pave the way with ‘Candy Crush’, Xbox and ChatGPT. Bruising app wars at Apple and Google may exact a high price, however.
Breakingviews readers’ year of living dangerously 29 Dec 2023 Our best-read stories of 2023 reflect an audience trying to navigate a complex world of conflict, unpredictable interest rates and novel inventions. Familiar obsessions, including dramatic deals and the risks of a rocky energy transition, held your attention too.
New York Times arrives in new tech with AI lawsuit 28 Dec 2023 The 172-year-old newspaper publisher is suing OpenAI and its backer Microsoft for alleged unauthorized use of its articles to train chatbots. It could help compel tech companies to pay publishers for news content, shifting a modicum of power back to the battered media industry.
Goldman’s partnership is too much of a good thing 28 Dec 2023 The arcane and elite 420-member group bolsters the bank’s cachet, but sometimes exerts power that’s out of sync with other shareholders. Boss David Solomon already answers to his board, clients and 45,000 other employees. He would do well to cut the inner circle down to size.
Dear Chancellor: inflation will fall…when it falls 28 Dec 2023 Bank of England Governor Andrew Bailey has to write to the UK finance minister when consumer price growth is above or below 2%. Yet it’s clear mere central bankers can’t influence the behaviour of people or firms. Breakingviews imagines a letter in 2024 which says as much.
Mega-bank M&A goes from impossible to imaginable 28 Dec 2023 After 2008, CEOs saw investment-bank deals as risky while regulators saw them as dangerous. UBS will prove otherwise if it safely and profitably absorbs Credit Suisse. Imitators will not get the same sweet deal, but targets like SocGen and Barclays at least come cheap.
Intel becomes proxy for Biden’s America Inc 27 Dec 2023 The chip giant’s $3.2 bln subsidy to build a plant in Israel follows similar outlays from the USA and Germany. The investment loop is a unique boon to shareholders: President Biden wants to build an allied semiconductor supply chain to fend off China; he must use Intel to do so.
EU tech rules will create clicks, not competition 27 Dec 2023 Brussels wants to force Google, Meta and Apple to open up app stores, messaging networks and search engines. The US giants will have to let startups compete and offer consumers more opt-outs. It’s likely to result in lawsuits and hassle for users rather than rivals for Big Tech.
Toyota will engineer a half-electric renaissance 27 Dec 2023 The world’s largest carmaker is playing catchup with electric upstarts like Tesla and China’s BYD, just as global demand for EVs slows. But boss Koji Sato will capitalise on the Japanese giant’s edge in hybrid vehicles as the tech enjoys a sudden renaissance.
Man Utd deal is messy substitute at trophy price 27 Dec 2023 Tycoon Jim Ratcliffe’s purchase of a 25% stake values the British club at a hefty $6.2 bln. That still leaves him running behind the Glazer family with no easy path to control. A fuzzy turnaround plan means the Red Devils’ fortunes on the pitch may not recover soon either.
Sony Activision riposte will involve mobile gaming 27 Dec 2023 Microsoft’s $69 bln Activision deal threatens its Japanese rival’s console dominance. But it also establishes a bridgehead for the US firm in the $90 bln mobile gaming space. Recent mobile weakness and an expected return to growth mean 2024 is a good time for Sony to plug in too.
Gen Alpha will tire of living online 26 Dec 2023 As kids born since 2010 age into the digital world, their fatigue from being forced online will prompt backlash similar to Gen Z. Both will become smarter about the implicit agreement of trading services for data and make life more difficult for companies from Alphabet to OpenAI.
Kim Kardashian will be kicked off Instagram 22 Dec 2023 The influencer is worth $1.7 bln, which could climb with her shapewear brand’s IPO. That’s value that doesn’t flow to the owners of platforms sustaining content creators’ fame, like Elon Musk or Mark Zuckerberg. The best way for them to pull some back: suspend her privileges.
Bristol Myers new CEO grabs M&A by the horns 22 Dec 2023 Buying rival drugmaker Karuna for $14 bln is a big risk for just-installed Chris Boerner. Karuna’s schizophrenia therapy could see giant sales, but with much uncertainty and suboptimal patent protection. Pharma has shone in a dismal year for mergers. Even so, it’s a daring deal.
Restaurant deals will be back on the menu in 2024 22 Dec 2023 With the pandemic receding, US spending on dining out has topped $1.3 trln. Inflation has eaten into any exuberance, but as costs moderate and restaurants recoup margins, dealmaking will return, giving long-held investments like Panera a shot at cashing out.
Capital Calls: Eni’s green sale 22 Dec 2023 Concise views on global finance: The Italian energy major’s 10 bln euro valuation for its retail-and-renewables arm Plenitude is more likely to be recreated or exceeded if it avoids a rushed listing.
Artificial intelligence will embark on a data dash 22 Dec 2023 Text and photos produced by professionals are key to training and improving AI models. But accessing this information is getting harder and pricier. AI firms will have little choice but to pay for data, pushing up already-high costs – and delivering a windfall to publishers.
China policy risk returns as stock market grinch 22 Dec 2023 Shares in Tencent and NetEase plunged after surprise new curbs from Beijing on video-game spending and rewards. It smacks of President Xi Jinping’s crackdowns on private tutoring, tech and other sectors – and gives overseas investors another reason to be wary jumping back in.
Western support for Ukraine will wobble – but hold 22 Dec 2023 Foreign donors have given $66 bln in fiscal aid to the country since Russia’s invasion. A prolonged conflict will test the US and Europe’s solidarity with Kyiv. But allies will keep backing President Volodymyr Zelenskiy once they consider what will happen if they don’t.
China’s automakers will defy the great uncoupling 22 Dec 2023 There are industries, like microchips, where American trade warriors can cleave friendly supply chains from China. Cars aren’t one of them. Despite $80 bln of announced investments, lagging tech holds US champions back. In 2024, that will prove the limits of protectionism.
Wintershall saga reaches logical $11 bln endgame 21 Dec 2023 After flirting with a listing and rival suitors, the BASF-owned German oil group is to merge with $3 bln Harbour Energy. The UK-listed buyer gets a relatively cheap way to bulk up in gas assets. The sellers get to stick around for the ride, courtesy of some funky financing.
Paramount casts itself in next season’s M&A hit 21 Dec 2023 By starting talks with potential acquirer Warner Bros Discovery, the Redstone family is effectively putting its $10 bln media empire in play. There are multiple ways to structure a deal, and many possible suitors. It’s just not clear debt-laden WBD is the best for the role.
Capital Calls: Angola and OPEC 21 Dec 2023 Concise views on global finance: The African state’s decision to quit the oil producer group isn’t a huge deal in the short term, but will raise fears of more meaningful exits.
The United States will go from MAGA to MAWA 21 Dec 2023 ‘Make America Worse Again’ won’t be a campaign slogan, but it’s a vibe. Joe Biden’s policies brought jobs onshore, helped the energy transition, and delayed a downturn. But 2024 will bring infighting that worsens the nation’s financial standing and an electoral test of democracy.
Disney’s 2024 lifeline leads to Tim Cook 21 Dec 2023 Boss Bob Iger is seeking a partner for sports network ESPN. Tim Cook’s Apple would be a nice co-owner. The brands are aligned, the executives have a history with movie studio Pixar, and the iPhone maker is getting deeper into sports.
EU debt rules offer unity at price of relevance 21 Dec 2023 European Union finance chiefs reached a deal on a new fiscal pact, breaking a post-pandemic stalemate. Germany won austere deficit and debt targets, yet pain will be diluted by French-fought delays and concessions. The net result is an overly complex system that may not work.
Permira risks tripping on rushed Golden Goose IPO 21 Dec 2023 The buyout shop may list the fast-growing Super-Star sneakers brand. With its track record tainted by bootmaker Dr. Martens’ poor post-listing performance, the investment firm has little room for error. Hurrying a share sale while the luxury segment faces headwinds seems unwise.
Green investors will learn the art of stockpicking 21 Dec 2023 Wind and solar stocks had a torrid 2023, as stars like Orsted crashed. But renewables investment is strong, input cost inflation is abating and rates may have peaked. Investors able to pick developers in the right sector, or suppliers in the right regions, may find bargains.
Ahmedabad will be India’s next Silicon Valley 21 Dec 2023 So will Mysuru, Jaipur and Coimbatore. Global firms are leaning on employees in India to execute more complex tasks. They’ll find a cheaper, reliable workforce beyond the country’s traditional tech hubs. The rise of AI will see more cities become the workplaces of the world.