China’s Huawei could be the surprise IPO of 2024 21 Dec 2023 Ren Zhengfei has long insisted the telecoms giant and chip designer he founded will never go public, but the company is now central to Beijing’s technology ambitions, which require heavy funding. A Huawei listing would also breathe life into China’s ailing stock market.
Aon’s $13 bln deal leaves it little room for error 20 Dec 2023 The US insurance broker’s purchase of rival NFP is a sensible bet on the market for selling financial products to mid-sized firms, at a not-so-sensible price. Aon argues growth will be rapid. Still, its wobbly acquisition history saddles it with a credibility deficit.
US defense minnows will storm the barricades 20 Dec 2023 Even as conflict in Ukraine leads American arms makers to boost production, the political mood is turning against giants like Lockheed Martin. With half the $415 bln handed to American defense contractors not receiving a competitive bid, newcomers will make battlefield gains.
Big companies will raid government for future CEOs 20 Dec 2023 There’s a long history of businesspeople going into politics. Now sanctions and subsidies are showing boardrooms the value of diplomatic skills. Lazard CEO Peter Orszag and Legal & General Chairman John Kingman worked in government. Others will follow through the revolving door.
Suez crisis may finally jolt Egypt out of stasis 20 Dec 2023 Cairo was wobbling even before militant attacks threatened its $9 bln of annual revenue from the Suez Canal. With inflation at 36%, re-elected President Abdel Fattah al-Sisi’s foreign aid needs are spiking. He will need to stop dawdling on reforms required by donors like the IMF.
Spain’s Saudi telecoms shield is pricey and futile 20 Dec 2023 Madrid is buying 10% of Telefonica to protect it from the kingdom’s stake-building. But Prime Minister Pedro Sánchez already has tools to block the Gulf investor taking a board seat or a bigger share. Splurging taxpayer money unnecessarily looks risky for a new government.
Capital Calls: Back from the USSR 20 Dec 2023 Concise views on global finance: Austrian bank Raiffeisen’s 1.5 bln euro plan to swap assets with sanctioned billionaire Oleg Deripaska is smarter than it looks.
BP and Equinor will find common ground 20 Dec 2023 The British oil major is undervalued against peers and is in a leadership vacuum. That makes it vulnerable to a takeover as US mega-mergers shake up the sector. Daring to tie up with Norwegian ally Equinor offers a powerful hedge and a springboard.
The Li clan will deal their way out of value trap 20 Dec 2023 The Hong Kong-based empire founded by Li Ka-shing is unloved by investors. Despite his son Victor’s efforts to boost value, the $20 bln CK Hutchison trades at a big discount to its net assets. With 80% of revenue outside Greater China, it makes sense to explore a sale or breakup.
Biofuels comeback will give West a rare energy win 20 Dec 2023 Propellants from plant waste and animal fats have lost out amid an e-mobility push. Yet the difficulty of using electricity for planes and ships, and the rise of non-edible crops as feedstock, will offset food supply fears. Western groups like BP, Total and Eni will benefit.
Price of Illumina’s Grail fail extends to board 19 Dec 2023 The gene-sequencing company finally conceded to selling the cancer-testing business it bought without regulatory approval for $7.1 bln. Its bravado will be costly, as Grail’s value has plummeted. Boss Francis deSouza already paid with his job; directors deserve to, as well.
Santa puts coal stocks in stockings for last time 19 Dec 2023 Producers of the dirty fuel, like Peabody and Arch Resources, have generated excellent returns over the past two years, a trend that may continue in the near term. But government policies are rapidly eroding demand. Fewer investors will want the shares in Christmases future.
Backlogged M&A pipeline will burst in 2024 19 Dec 2023 Even normally chipper bankers are wary as merger activity heads for a second straight drop from its $5.7 trln peak in 2021. And yet stabilizing capital costs, bulging cash reserves and adjusting valuation mindsets should help spark enough pressure to ignite a deals resurgence.
Blockchain’s rebirth will pass United States by 19 Dec 2023 Regulators are cracking down on digital asset firms while Congress dithers over passing rules to govern them. Financial hubs like London, faster to set guidelines, will capture the value created not just by crypto, but by potentially powerful distributed ledger technology.
Capital Calls: Cevian tries ‘relaxivism’ at UBS 19 Dec 2023 Concise views on global finance: The pushy European investor has bought shares worth around 1.2 bln euros in the Swiss bank, equivalent to a 1.3% stake. Yet it seems happy to sit back and let UBS management execute their strategy.
New Red Sea blockage may be both longer and milder 19 Dec 2023 Militant attacks have forced groups from Maersk to BP to avoid the conduit for over 10% of world trade. Re-routing round Africa will hike fuel costs and could last six months. Yet weaker global demand relative to a six-day 2021 stoppage may limit the wider economic fallout.
Saudi’s best foreign investment will be in Gaza 19 Dec 2023 The kingdom is known for flashy punts on Western sports and blue chips. But its real need is foreign cash to help diversify away from oil. If Crown Prince Mohammed bin Salman were to use Saudi money to help Palestinians rebuild post-war, US goodwill may prompt an FDI spike.
Swiss pharma mega-deal has healthy prognosis 19 Dec 2023 In 2001 Novartis took a stake in Roche, yet a deal never happened. Over two decades later, the mooted acquirer is stronger and could gain from vast synergies and more heft in oncology. Making the $440 bln union a reality means overcoming family pride, and antitrust issues.
Nio’s $2 bln Christmas gift requires some strings 19 Dec 2023 Shareholders welcomed the money-losing electric-car maker’s latest infusion from CYVN. But cash alone won’t put Nio on track unless it focuses and cuts costs. With a 20% stake and two board seats, the Abu Dhabi investor could push for some New Year’s Resolutions to boost returns.
StanChart M&A theory will finally become reality 19 Dec 2023 For years, the bank run by Bill Winters was cheap but dysfunctional. Now, it’s producing significantly higher returns on tangible equity but the valuation remains low. If that persists in 2024, it will be hard for suitors like First Abu Dhabi Bank to resist launching a bid.
Farfetch rescue leaves scattered luxury debris 18 Dec 2023 The struggling online merchant secured a bailout from South Korean e-commerce giant Coupang, which is injecting $500 mln. The deal gives Farfetch a fresh shot at existence, but leaves former backer Richemont wiped out, and its new investor with fresh messes to clean.
Adobe paints brighter future without Figma 18 Dec 2023 Unwilling to fight trustbusters, the design-software giant ditched its $20 bln deal. Since agreeing to pay the inflated price, its own AI plans have wowed investors. Even so, the hype is a bit overdone and its target now gets an extra $1 bln to sketch out new ways to compete.
Nippon’s $15 bln US Steel deal burns too hot 18 Dec 2023 The Japanese company beat out Cleveland-Cliffs and others to buy a tempting supplier to American automakers. Overseas expansion also makes sense, but disgruntled unions may be problematic. And the bidding war pushed the price to a level that undermines the acquisition’s strength.
Ozempic overshoot will plump up bargain-hunters 18 Dec 2023 New weight-loss drugs are highly effective, but investors risk overestimating how fast change will occur and how many people will take the therapies indefinitely. Some companies regarded as victims, such as Zimmer Biomet, may even benefit. Contrarian investors may profit in 2024.
Capital Calls: Ryanair 18 Dec 2023 Concise views on global finance: The 21 bln euro budget airline’s potential 100 mln euro bonus for its CEO looks all the more awkward given the board’s decision last year to tweak the conditions.
Vodafone may have to answer Iliad’s Italian call 18 Dec 2023 French tycoon Xavier Niel’s new bid for his UK rival’s business in Italy values it at a chunky 10.5 bln euros. That’s near what he offered last year despite falling earnings at Vodafone’s local arm. CEO Margherita Della Valle may struggle to find a more attractive exit strategy.
Russia’s economy will suffer from brawl at the top 18 Dec 2023 The CEO of state-held oil major Rosneft slammed the central bank’s high interest rates. President Vladimir Putin has long thrived on tensions between hardliners and the few remaining technocrats. But with Moscow in permanent crisis mode, the high-level conflict spells trouble.
Altice’s best hope will be a Middle East lifeline 18 Dec 2023 Telecoms tycoon Patrick Drahi is dismantling his empire to cope with a $60 bln debt wall. Attracting new investors may be tricky given low growth and a corruption scandal. Luckily Gulf states like the UAE and Saudi Arabia are flush with cash and keen to grab Western assets.
Stellantis will cruise with GM and Ford 18 Dec 2023 The maker of Jeeps and Opels run by Carlos Tavares is one of Europe’s lowest-valued carmakers. Yet it generates much of its income in the US, and boasts industry-leading profit margins. Keeping a single New York listing could see its valuation match Detroit rivals.
Capital Calls: MUFG Down Under 18 Dec 2023 Concise views on global finance: The Japanese finance group’s latest overseas pounce is a $740 mln agreed deal for Link Administration, an investor services firm with three years of failed takeovers behind it.