Odd Washington deal creates anti-M&A synergy 28 Mar 2024 Senators on opposite ends of the political spectrum are joining forces to stop stock swaps like Capital One’s $35 bln Discover deal from being tax-free. The proposal probably wouldn’t generate much revenue. It does, however, build on the movement against corporate concentration.
Central banks’ noise helps dollar – and Joe Biden 28 Mar 2024 In February, traders’ hopes of rate cuts by the Federal Reserve sent the currency lower. But it has risen 1.8% in March, partly due to policymakers’ mixed messages. Until the fog clears, the greenback will rule forex markets. That curbs US inflation and may benefit the president.
Sergio Ermotti has a path to Wall Street-style pay 28 Mar 2024 UBS handed its CEO $16 mln for nine months’ work last year. That’s more than his European rivals, but less than the bosses of US lenders like Morgan Stanley, whose valuation the $100 bln Swiss bank aspires to. Tweaked terms next year give Ermotti a chance to narrow the gap.
UK’s leaky coffers are Thames Water’s lifeboat 28 Mar 2024 The utility is drowning in $19 bln of debt and may collapse in 2025 if its regulator doesn’t approve higher bills. A nationalisation could be the best solution but the government isn’t flush with cash. Unless PM Rishi Sunak breaks his fiscal rules, consumers will have to pay up.
Shein’s fast fashion comes with fast-finance risks 28 Mar 2024 Influencers and US shoppers love the online retailer, but the one product that’s not yet for sale is the company’s shares. If all goes very right, a $200 bln valuation in a mooted IPO isn’t unthinkable. Yet Shein’s business model may shift as quickly as its cut-price clothing.
Eni’s green shoots are taking time to blossom 28 Mar 2024 Italy’s $53 bln energy major trades at a discount to rivals. An overhang from Rome’s potential stake sale and falling gas prices are drags. But CEO Claudio Descalzi’s plan to raise cash by spinning off energy transition-focused business units is also yet to fully shape up.
Europe’s IPO window opens slowly for buyout barons 28 Mar 2024 CVC floated beauty retailer Douglas, whose shares fell, while EQT received a warmer welcome for skincare group Galderma. In this Viewsroom podcast, Breakingviews columnists explain how to interpret the mixed message for private equity groups sitting on $3 trln of unsold assets.
Tata’s forced IPO will only bring problems 28 Mar 2024 A central bank decision requires the $194 bln holding company of the Indian cars-to-tech conglomerate to list. It could lump Tata Sons with a huge discount and also spotlight the special tax treatment the group’s ultimate owners enjoy. That could force an even bigger upheaval.
Blackstone cures two ailments in one Moderna shot 27 Mar 2024 Higher costs of capital are pressuring CEOs into tough spending decisions, while buyout shops flush with cash want to deploy it. This dynamic makes a $750 mln deal to fund a biotech project a crafty solution. The hard end of the bargain: ceding value from promising flu research.
Credit card suit takes swipe at perks programs 27 Mar 2024 A $30 bln settlement in a decades-old lawsuit will compel payment networks Visa and Mastercard to let retailers charge customers more to use certain cards – and to tell them why. As shoppers take notice, they may cool on fancy rewards programs.
Packaging deal’s US interloper may end up as pulp 27 Mar 2024 New York-listed International Paper proposed merging with $7 bln DS Smith as an alternative to the target’s union with UK peer Mondi. But the intruder’s premium offer crumpled in value as its own share price fell. It now faces the tough choice of either retreating or overpaying.
LNG angst seeps from consumers to producers 27 Mar 2024 A few years ago, supplies of liquefied natural gas were scarce and prices sky-high. Extra capacity arriving this decade means there could soon be a price-sapping glut. Big suppliers like Qatar and Shell have long-term contracts that can ease the pain, but only up to a point.
BYD is unscathed in China’s electric-car wars 27 Mar 2024 The world’s largest EV maker founded and led by Wang Chuanfu is winning market share and accelerating its profit margins. That suggests the $86 bln company can keep cutting prices and investing overseas despite reporting its slowest quarterly profit growth in two years.
Alibaba sends out SOS on Hong Kong’s market 27 Mar 2024 The Chinese e-commerce giant ditched plans to list its logistics unit in the city and offered to buy out minority shareholders including Singapore's Temasek at a $10 bln valuation, half the mooted worth six months ago. It points to more pain for owners of unlisted Chinese assets.
McDonut is a happy meal without M&A mess 26 Mar 2024 Krispy Kreme will sell donuts at McDonald’s, sending shares in the pastry maker up 25%. That cuts costs to build stores, akin to synergies, while the $200 bln burger chain takes on little risk. In a world with high rates and harsh trustbusters, it’s a smart twist on dealmaking.
Hermès lawsuit attacks luxury’s FOMO premium 26 Mar 2024 A suit against the $274 bln fashion house claims it’s so hard to buy a Birkin, it’s illegal, alleging the handbag’s must-have aura lets the company force purchases of unwanted extras. If successful, it could crimp both Hermès’ top growth areas and ultra-luxe goods’ mystique.
Collapsed US bridge spans hard assets to high-tech 26 Mar 2024 The Baltimore tragedy compounds Suez and Panama Canal shipping woes. Fallout from Los Angeles port closures illustrates how wide-ranging costs can be. For investors swept up in AI fervor, it’s a reminder that the value of intangible IP depends heavily on tangible infrastructure.
Capital Calls: Shell and Russia 26 Mar 2024 Concise views on global finance: Russian state giant Gazprom will buy the British energy major’s 27.5% stake in a major Siberian liquefied gas field for the equivalent of $1 bln. Shell is however unlikely to be able to get hold of the cash any time soon.
Big banks’ shock absorbers are still far too slim 26 Mar 2024 Credit Suisse and a string of US regional banks failed last year. In this Exchange podcast, Stanford Professor Anat Admati argues that lenders’ equity buffers are punier than they seem – and that fixing the problem needn’t cause a credit crunch.
Lower taxes would cripple Europe’s growth 26 Mar 2024 The bloc needs new public investment of about 3% of GDP for the green transition, defence, infrastructure, education and health. High debt loads limit borrowing and spending cuts hurt the economy. Instead of pledging lower levies, governments have to raise them.
Ping An and Vanke look made for each other 26 Mar 2024 Pressure is mounting on China's financial giants, including the $90 bln insurer, to support the beleaguered property developer. That is a big ask for Ping An, whose own earnings just slumped 23%. Still, helping Vanke could limit the pain for its own hefty property exposure.
Commodity trading giants get in cotton M&A spin 26 Mar 2024 Singapore's Olam has bested Louis Dreyfus' offer for one of Australia's largest processors of the fibre. The two suitors have battled Down Under in the past, and Olam looks to have the edge for a second win. But the volatility of earnings in this small deal warrants caution.
How to get the best new boss for Boeing? Ask GE 25 Mar 2024 Dave Calhoun failed to fix the 737 MAX maker’s problems; ensuring its next CEO does better requires financial incentives equal to the mammoth task. Engine manufacturer GE’s controversial $232 mln inducement for boss Larry Culp offers a blueprint, if Boeing avoids its missteps.
Nordstrom take-private would strike a hard bargain 25 Mar 2024 The department store chain’s founding family is again mulling a buyout, Reuters reported. Sagging shares and weak results make it a target. Wringing out high enough returns to make a deal worthwhile requires both holding a stern line on price and dramatically reigniting growth.
British M&A refuseniks are playing a risky game 25 Mar 2024 Insurer Direct Line and retailer Currys both rebuffed offers that came with 40% premiums. One possible rationalisation is that a huge UK stock-market discount invites cheeky bids that require knocking back. But certain British stocks may also not merit greater generosity.
Ukraine loan is matter of politics and accounting 25 Mar 2024 Lending the country $300 bln backed by its claim for war damages against Russia has several benefits compared to rival ideas for unlocking support. Kyiv’s allies would still need to find the cash, though. Here is how they could navigate the political and financial obstacles.
China and foreign CEOs dance ever trickier tango 25 Mar 2024 Premier Li Qiang welcomed 100 bosses from giants like Apple to a Beijing business confab. Yet Tim Cook is shifting iPhone supply chains elsewhere, while China is pressing ahead with phasing out overseas tech like chips. The increasingly uneasy relationship is primed for missteps.
Glencore can leave Aussie listing plea in the pit 25 Mar 2024 Hedge fund Tribeca reckons the Swiss group would command a higher multiple if it moved its shares to Sydney from London. Down Under’s mining culture, powerful pension funds, and dividend tax breaks sound enticing, but are a valuation chimera for the coal- and trading-heavy firm.
Donald Trump’s paper payout defies financial truth 22 Mar 2024 Shareholders of a blank-check vehicle agreed to buy his nascent social media firm, valuing it at about $5.6 bln. If all goes to plan, the Republican candidate could add 55% of that to his net worth. On any objective measure, though, his Truth Social platform is worth much less.
Energy firms can’t all be better than average 22 Mar 2024 The industry’s big event in Houston saw oil, gas and renewable firms believe in different realities, mixed with resentment of being overlooked and supposed government favoritism. But in a commodity industry, low cost eventually wins, and that is renewable fuel.