Chinese deal offers DRC miners a rare sign of hope 12 Jun 2018 State-backed CITIC has poured $560 mln into Robert Friedland’s Ivanhoe Mines. That is an unusual endorsement of the Democratic Republic of Congo, following a punitive new mining code. The move suggests a compromise is still likely, which would benefit Glencore and Randgold too.
Medical device megadeals risk antitrust backlash 11 Jun 2018 Stryker is circling Boston Scientific for what could be a $58 bln takeover bid. Such a price tag wouldn’t be excessive by recent standards. But as more medical suppliers look for mergers to cut costs and gain leverage over hospitals, regulators will be tempted to step in.
Rockwell dabbles in financial overengineering 11 Jun 2018 Paying $1 bln for a non-controlling stake in a rival software company seems odd. PTC doesn’t need the cash. Such shareholdings in peers can have logic, as some drugmakers have shown. The bar is high, though, especially after Rockwell last year turned down a takeover at a premium.
Elliott didn’t get into activism to make friends 11 Jun 2018 Paul Singer’s hedge fund wants board seats at $31 bln utility Sempra, and has accused it of over-expanding. Presumably that includes the Oncor deal Elliott itself backed last year. Singer is arguably helping Sempra again, though the target’s board may not feel that way.
KKR gives Envision a $6 bln general anesthetic 11 Jun 2018 Going private will make life less painful for the U.S. medical services group, which has labored amidst reports of patients stung by surprise charges for emergency treatment. KKR should make out fine, too, if healthcare practitioners’ ability to charge high prices endures.
USG pokes hole in U.S.-Europe trade drywall 11 Jun 2018 The building products outfit agreed to a $6.1 bln takeover by German rival Knauf. It did well to get a 5 pct top-up given 31 pct owner Warren Buffett was already on board. In the wake of a rancorous G7 it shows companies can still transact when politicians keep out of the way.
Trump trade spleen makes foreign firms great again 11 Jun 2018 A fragile G7 detente imploded over his steel tariffs and an adviser's dig that there’s a “special place in hell” for Canada’s Trudeau. Because retaliation pushes up costs, the levies hurt U.S. firms more than they help. It’s rivals like Chinese ag firm COFCO that will profit.
HSBC’s new CEO strives for profitable banality 11 Jun 2018 John Flint’s plan to lift return on tangible equity above 11 pct, while investing up to $17 bln in technology and China, is hardly radical. Yet aiming for more than modest revenue growth could be reckless. It should be enough to maintain the bank’s premium to its European peers.
Trump-Kim parley has a downside for Xi 11 Jun 2018 A breakthrough in Singapore between the mercurial U.S. and North Korean leaders would be an economic win for Seoul and others in the region. China might even profit from the détente. President Xi Jinping also could lose negotiating leverage, though, as trade tensions escalate.
CFIUS proves it is not a one-way bet after all 11 Jun 2018 The U.S. security panel cleared China Oceanwide’s $2.7 bln takeover of Genworth, after nearly two years of waiting and as Washington and Beijing feud over trade. The insurer’s shares carried a 30 pct discount, showing just how hard it is to price regulatory risk right now.
Argentina’s $50 bln IMF deal has a year to work 8 Jun 2018 President Macri, like Cardinal Mazarin’s preferred generals, has been lucky as well as bold so far in his efforts to fix Latin America’s No. 3 economy. With elections not due until late 2019 and the deal shielding social spending, he has time to beat opponents’ IMF-phobia - just.
Verizon’s new boss will unscramble M&A signals 8 Jun 2018 Outgoing CEO Lowell McAdam sent mixed messages on whether the U.S. telecom would buy a big media company. Replacing him with the chief tech guy suggests Verizon is more interested in growing its reach than its content. A bid for $15 bln satellite operator Dish could follow.
Viewsroom: Are tech investors lemmings? 7 Jun 2018 Despite Facebook’s mounting problems, only a third of independent shareholders refused to reelect Mark Zuckerberg and Sheryl Sandberg to the board. Tesla and Netflix owners tend to follow the leader, too. Yet protest votes are useful. Plus: Chinese stocks make it into the MSCI.
G7 risks becoming G-zero without consensus 7 Jun 2018 President Donald Trump is the sore thumb among leaders meeting in Canada on Friday. Last year’s G7 pledges were already watered down, and he hadn’t then left the global climate accord or started erecting trade barriers. The forum loses relevance if it lacks U.S. economic backing.
Water M&A mudslinging does no one any favors 7 Jun 2018 A cold war between four utilities is heating up. Frustrated California Water is launching a hostile $1.4 bln bid for local rival SJW. SJW’s preferred Connecticut partner, also in Eversource’s sights, is grudgingly seeking other offers. It may be too late to keep watchdogs happy.
ZTE deal sets a bad precedent 7 Jun 2018 The White House will fine the sanctions-violating Chinese telecoms giant $1 bln and replace its board. The sum is a financial giggle, board changes look mostly symbolic, and a new compliance team will be challenged from the get-go. It’s a weak deterrent and a wasted opportunity.
Amazon’s softly-softly UK soccer move is smart 7 Jun 2018 The e-commerce group made its first foray into UK football rights. But it won’t screen as many games as Sky and BT. The restraint means the group run by Jeff Bezos should easily break even, and suggests it’s more interested in scoring tactical goals than tackling rivals head-on.
Uber may find four wheels just as bad as two 7 Jun 2018 The car-share app plans to run electric cycles in Europe. Logical as it sounds given Uber’s transport expertise, it will lumber the company with troublesome assets, add fresh regulatory risks from city officials, and it could torch cash. The worst part: Uber has little choice.
Morrisons can pilfer from larger rivals’ trolley 7 Jun 2018 The merger of J Sainsbury and Walmart-owned Asda leaves the UK grocer in a distant third place. Boss David Potts could counterbid, but drumming up similar synergies looks tough. Better to lobby against the deal, and grab market share and the best shop locations if it goes ahead.
Latest Bitcoin ETF idea flirts with mainstream 6 Jun 2018 A year after its first shot was nixed by the SEC, SolidX is proposing a new exchange-traded fund backed by the digital token. Futures markets have addressed the agency’s concern about maturity. And closer regulatory scrutiny of cryptocurrencies improves the odds of a green light.