AT&T deal approval doesn’t mean anything goes 13 Jun 2018 The U.S. Justice Dept gambled when it sued to block the $85 bln Time Warner sale. Its failure means business as usual for vertical mergers, like Comcast’s likely bid for Fox. Big firms that directly compete will still face tough scrutiny – and prosecutors eager for a clear win.
Hadas: This should be an anti-dollar moment 13 Jun 2018 Discontent with the world’s dominant currency is not new, but the Trump effect is something new. A trade circuit free from the U.S. president’s idiosyncratic America-first policies is urgently needed. The euro and renminbi can provide a base, but the politics are unpromising.
New ZTE regime could climb out of big hole 13 Jun 2018 The Chinese telecoms company lost some $3 bln of market value after its reprieve from a U.S. death sentence. That suggests concerns about the clean management sweep. If, however, ZTE can find decent leadership and stay out of trouble – big ifs – a 5G rollout holds real promise.
AT&T gets law right this time, but could regret it 12 Jun 2018 A judge cleared the telco’s $85 bln Time Warner purchase in a clean ruling against U.S. regulators who tried to block it. That’s a victory for CEO Randall Stephenson, but it could come with a winner’s curse. AT&T is new to the media business and has barely any room to cut costs.
Tesla job cull is more signal than maneuver 12 Jun 2018 Cutting 9 pct of workers won’t tip the $60 bln electric-car maker into profit. Even if it halved its sales and admin budget it would probably still lose money this year. There’s a message in the economizing, though: boss Elon Musk is eyeing small things, not just the big picture.
Ralph Lauren’s growth track runs through China 12 Jun 2018 The clothier aims to boost revenue by $1 bln by 2023. The 16 percent target seems bold given the label’s recent woes and upheaval in the retail sector. But the quintessential American brand’s provincialism may be its saving grace. It has room to expand in the People’s Republic.
Exxon muddies the picture with new trading push 12 Jun 2018 The $350 bln oil giant is bulking up in energy trading by poaching several veteran dealers from rivals. It could help mitigate fluctuations in the price of the commodity. But it also adds risk and opacity just as investors want otherwise, and does nothing for diversification.
Facebook is light on Washington friending skills 12 Jun 2018 Its lobbyists tried to do damage control in Congress as its data-sharing with China’s Huawei came to light. Their lack of answers left the impression they weren’t in the loop, and the company’s defensive tweets didn’t help. Facebook could use a lesson in diplomacy as well as transparency.
Trump and Kim’s TV diplomacy lacks definition 12 Jun 2018 A meeting between U.S. President Donald Trump and North Korea’s leader was mostly for the cameras. "Denuclearization" remains a distant prospect. Still, engagement reduces the risk of ruinous conflict and might even pry open Pyongyang’s closed economy, benefiting neighbours.
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.