Aussie telco buyout exhibits fibre-optic fever 28 May 2019 Sweden’s EQT has offered to buy Vocus for $2.3 bln, a 35% premium to its undisturbed price and far higher than 2017 bids from KKR and Affinity. The price reflects hype around fancy fibre networks, which may not last. Shareholders will be grateful for the opportunity to exit.
Alibaba’s cracks show by revisiting Hong Kong 28 May 2019 The $400 bln e-commerce company plans to raise up to $20 bln from a second listing, five years after its New York IPO. Investors closer to home may give Alibaba a richer valuation. But seeking fresh capital alongside younger rivals also suggests its dominance is under threat.
Fiat gets motors revving on auto consolidation 27 May 2019 The Italian-American car group proposed a 33 bln euro merger with Renault that should keep Nissan warm, please the French state and give the Agnelli family a chunk of cash. More importantly, it unlocks a 5 bln euro bonanza of cost savings that will put industry rivals on notice.
China’s small bank bailouts duck bankruptcy test 27 May 2019 Baoshang, linked to missing billionaire Xiao Jianhua, has been brought under state control. Despite vocal threats, Beijing remains reluctant to allow even disgraced local lenders to fail. Consolidation is the alternative, but healthy peers will prove unwilling partners.
Hitachi’s spinoff lacks buyout chemistry 27 May 2019 Bain and KKR are eyeing the Japanese giant’s $6 bln chemicals arm. Steady cash flow, modest debt – plus turnaround prospects – account for the attraction. But it’s pricey relative to rivals, and a splashy push into next-gen telecoms and electric cars could take years to pay off.
Popular Modi puts Indian resistance to the test 24 May 2019 Prime Minister Narendra Modi has been re-elected despite concerns he strong-arms the central bank, judiciary, and media. Voters seem unfussed about checks and balances - a global trend. But if he pushes them too hard, India’s democratic institutions will struggle to hold up.
Isolated Huawei may be shoved into Beijing’s arms 24 May 2019 Important suppliers such as Arm and Intel are abandoning the Chinese telecom titan after the United States blacklisted it. That puts $50 bln in overseas revenue at risk. Huawei has cash to cope for now, but a breakup or state intrusion can’t be dismissed as potential endgames.
Chinese booze behemoth distills a sobering reality 24 May 2019 Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.
Viewsroom: America’s topsy-turvy regulators 23 May 2019 Qualcomm lost a lawsuit brought by one DC overseer, even as the DOJ intervened, while $26 bln T-Mobile US-Sprint merger is getting yanked around by agencies with opposing views. Doing business is hard when agencies no longer act in unison. Plus: Is Luckin Coffee going cold?
Cox: “China does it” is a bad antitrust argument 23 May 2019 Sheryl Sandberg says Facebook shouldn’t break up since its Middle Kingdom rivals never will. France and Germany pushed hard for an anti-competitive train merger because of a looming Chinese monopoly. Western values should guide competition law, not Beijing’s Communist Party.
Meituan Dianping delivers sweet-and-sour to Uber 23 May 2019 Getting bigger enabled the $40 bln Chinese company to cut its operating loss by charging restaurants for ads and fees to tote meals. Intensifying competition with Alibaba, however, will eat into cash. Uber can expect similar trouble as it squares off with Amazon-backed Deliveroo.
Jobs will define Narendra Modi’s next five years 23 May 2019 Early results suggest India's prime minister has won a second term. After a campaign tinged with nationalism, voters looked past an employment crisis, but their leader cannot do the same. Missing out on a demographic dividend will have dire consequences for haves and have-nots.
FamilyMart fracas reheats Chinese corner-store war 23 May 2019 The $13 bln Tokyo-based chain is suing to end its mainland joint venture. It already ranks second in China, ahead of Japanese peers Lawson and 7-Eleven. Untethered, it could expand faster, find a tech-savvier partner, and perhaps take the lead.
Hadas: “Zero privacy” is both blessing and curse 22 May 2019 Back in 1999 a computer executive told people worried about disclosing personal data to “get over it”. They mostly have. Shared information is now too useful for regulation to restore lost innocence. For oppressive governments, meanwhile, individualised media is also valuable.
Google’s hidden costs give Beijing sticker shock 22 May 2019 Reaching for sharper trade weapons, Washington has clamped down on Huawei's access to the U.S. giant's software. Chinese handset makers selling abroad rely on Google tech: the free Android system powers their phones. A crackdown leaves much of a $175 bln export market vulnerable.
Corporate clout on the line in Hong Kong fight 22 May 2019 From Washington to Wan Chai, executives are loudly protesting the city’s plan to allow extradition to mainland China. The business community often gets its way in the financial hub. Losing in this standoff would signify a turning point in Hong Kong for more reasons than one.
Samsung reaps benefits of U.S.-China tech war 21 May 2019 Restrictions on Huawei’s use of American chips and software will make it harder to sell telecom gear outside the PRC. And Apple products could be vulnerable to a backlash in China. That leaves openings for the Korean group to sell network equipment as well as more smartphones.
Huawei takes trade war into uncharted territory 21 May 2019 Washington's attack on one of China’s biggest companies will hurt suppliers. But the onslaught marks a more worrying turning point. Such a relentless assault on a corporate giant is virtually unprecedented; that makes everything unpredictable, including the rules of engagement.
Jaunts abroad offer useful cover for China’s Ctrip 21 May 2019 The $20 bln travel giant, owner of Skyscanner, has become a top shareholder in India's MakeMyTrip. Efforts at diversification are prudent: rivals are proliferating at home, and the economy is cooling. There's protection too, if Beijing pulls tourists into a worsening trade war.
Donald Trump may yet play Huawei-saving wild card 20 May 2019 The Chinese telecom firm has effectively been cut off from U.S. suppliers, from Qualcomm to Google. That happened to ZTE too, and the president relented largely to help trade talks. Huawei is a much bigger, bipartisan concern. Even so, a similar reprieve can’t be ruled out.