Telecom Italia Brazil fix is still possible 26 Feb 2016 Russian investor LetterOne has abandoned a plan to engineer a merger between Telecom Italia’s Brazil division and indebted rival Oi, after TI refused to talk. A deal could still stack up after Oi has cleaned up its debts. The Russians just may not be at the table.
AB InBev’s thirst grows for SAB’s stronger ales 25 Feb 2016 The Budweiser brewer missed quarterly estimates as U.S. profit fell. Boss Carlos Brito may pass it off as a case of hiccups, but his stock’s 10 pct drop this year suggests broader challenges. It makes the $100 bln deal for better-performing SABMiller look all the more important.
Iran election is key driver of oil price recovery 25 Feb 2016 Iranians will on Feb. 26 vote in the first election held since a deal with the U.S. to lift sanctions. Elect moderates and Iran could increase output, keeping global oil prices low. Go for hardliners, and the gush could be a trickle – and help OPEC reverse the slump.
Cheap oil leaves Repsol contemplating plan C 25 Feb 2016 The Spanish energy giant has cut capital spending as well as its interim dividend just months after revamping its strategic plan. But a 1.2 bln euro loss in 2015 and low crude prices may push it to consider a painful option: selling its prized 30 pct stake in utility Gas Natural.
HSBC adopts the "just add Goldman" banking recipe 25 Feb 2016 The hiring of former Goldman Sachs executive Matthew Westerman coincides with a revamp of HSBC’s operations. Folding in hundreds of corporate clients from the commercial lender may accelerate cost cuts. But it also suggests second-tier investment banks are in for a struggle.
Hugo Boss growth plans are a size too big 25 Feb 2016 The German label’s chief of eight years is stepping down after a profit warning wiped a fifth off the company’s value. Conditions in the U.S. and China are getting tougher. But the brand’s global expansion and plans to move upmarket also look to have run out of steam.
Deutsche Boerse plays nicely with LSE – for now 25 Feb 2016 The 14 bln euro German exchange is yet to divulge what cost savings may come from a mooted tie-up with its slightly smaller UK peer, but on one estimate it is giving away all their value. It could also base its HQ in London. Such good manners will help overcome future obstacles.
Lloyds dividend sunshine offset by macro cloud 25 Feb 2016 The UK lender is distributing a chunky 2 bln pounds of earnings to shareholders. A regulatory deadline will limit punishing legal charges for mis-sold insurance. But low interest rates and febrile markets have delayed cost and return targets. That could crimp future payouts.
BT avoids a breakup but at a cost 25 Feb 2016 The UK telecoms group can keep its infrastructure arm, a watchdog ruled, though the unit must operate more independently and under tighter regulation. Whether or not that promotes efficiency, it may force the company to increase spending. And a split is still on the table.
Bayer CEO can bide time on agri-business spinoff 25 Feb 2016 A merger wave among agriculture-chemicals makers may entice incoming boss Werner Baumann to put the German drugmaker’s crop science unit in play. A sale or the like could fetch up to 39 bln euros and unlock value. Yet Bayer’s record revenue and rising profit mean there’s no rush.
Central Asia needs life support as Russia suffers 25 Feb 2016 Tajikistan has appealed to the International Monetary Fund for help. Falling oil prices and sanctions have hit remittances from migrant workers in Russia that are the lifeblood of its economy. Other countries in Moscow’s economic orbit may need similar treatment.
EU’s new bank stress probe flunks Taleb test 24 Feb 2016 European lenders’ 2016 financial checkup looks too kind. Regulators will stress for negative rates, but only partially, while Brexit risk is ignored. But a bigger flaw is the use of a single adverse scenario. As Nassim Taleb has argued, stress tests need several.
Brexit more complex than big versus small business 24 Feb 2016 The assumption is listed firms will vote to stay in the EU, while red-tape-throttled small firms will not. But only a third of the FTSE 100 signed a letter backing Brexit. A glance at UK farms’ subsidies, labour and low tariffs suggests many small firms will vote to remain.
Foreign minnows resist opaque U.S. penalties 24 Feb 2016 An Andorran bank has managed to erase its money-laundering black mark. Last year, the Chinese-backed owner of a U.S. wind-farm project won a settlement with D.C. over the secretive CFIUS group’s block on its activities. Overseas Davids can occasionally slay Washington Goliaths.
Peugeot could rev revival by scrapping luxury line 24 Feb 2016 The French group has become one of Europe’s most profitable mass-market carmakers under boss Carlos Tavares, with a 5 pct operating margin in 2015. But a costly plan for a new premium brand risks spoiling the performance. Junking the idea would speed an already healthy recovery.
Abu Dhabi shake-up closes door on oil majors 24 Feb 2016 Abu Dhabi is restructuring its national oil producer. The sheikhdom on Feb. 14 named one of its most capable technocrats, Sultan Ahmed al-Jaber, as director general of its state oil company to help lead the task. It could freeze global oil majors out of the emirate for good.
Portugal squall maps new territory in euro crisis 24 Feb 2016 The state’s left-wing government has reassured bond markets by passing an emergency budget and buying back debt. Yet the recent spike in bond yields shows Portugal remains vulnerable to high debt and low growth. And it shows that the calm from the ECB’s bond-buying can be broken.
Delta Lloyd sweetens investors’ bitter pill 24 Feb 2016 The Dutch insurer plans to raise only 650 mln euros through a rights issue, rather than the 1 bln euros many shareholders feared. If the firm can pull that off, its solvency headache will be eased. But owners are still being asked to cough up over half the value of the company.
M&A cycle reaches "running out of ideas" phase 23 Feb 2016 Time Inc’s interest in Yahoo’s bits, a Deutsche Boerse-LSE marriage and merger talks - however unlikely – between Honeywell and United Technologies are all variations of deals that have been tried but failed for regulatory and other reasons. They may fare no better this time.
LSE and Deutsche Boerse union faces uphill battle 23 Feb 2016 The UK and German stock exchanges are in detailed discussions to merge. Market and regulatory shifts make doing so logical. But this deal will probably raise both financial stability and competition concerns – and encounter the complication of coinciding with a possible Brexit.