Apple’s Epic fail powers up EU tech oversight cred 11 Mar 2024 The $2.6 trln firm quickly reversed its decision to close ‘Fortnite’ maker Epic Games’ developer account. Frowns from the EU, which is going after Big Tech via fresh laws, look to have played a role. The episode is as much a victory for the bloc’s credibility as it is for Epic.
IMF’s Egypt bailout chooses hope over experience 11 Mar 2024 Cairo has received an $8 bln IMF loan after a $35 bln cash injection from the United Arab Emirates. If President Sisi does not justify the Fund’s optimism about reforms, a painful restructuring of the $165 bln external debt lies ahead.
Europe will struggle to unite if Ukraine loses 11 Mar 2024 Jean Monnet, one of the European Union’s founders, predicted it ‘will be forged in crises’. Russian success in Ukraine could be the wake-up call the bloc needs to forge closer security ties. But it could also fragment under the strain. All the more reason to ramp up support now.
Capital Calls: Packaging M&A 8 Mar 2024 Concise views on global finance: A potential 11 bln pound tie-up of UK-listed packaging companies DS Smith and Mondi will rest on yet-to-be-disclosed synergies.
Nickel rout is energy-transition warning for West 8 Mar 2024 Prices of the battery metal have halved in a year, leaving many mines unprofitable or mothballed. Indonesia’s China-backed industry now dominates. Piecemeal aid and a green premium push are unlikely to alter that. Absent smart planning, copper and lithium are vulnerable, too.
Slow growth puts ECB before Fed in rate-cut line 7 Mar 2024 The European Central Bank held borrowing costs but President Christine Lagarde suggested it might lower them in June. That could make her the first major central banker to ease policy, ahead of US Federal Reserve boss Jay Powell. Sadly, that’s only due to dire euro zone growth.
Microsoft is case study in weathering EU techlash 7 Mar 2024 The $3 trln group has taken a stake in French startup Mistral AI and kept its browser, search engine and ad sales platform clear of the European Union’s new Digital Markets Act. Things could change. But so far Microsoft shows how US firms can work around the Brussels backlash.
Virgin Money sale is UK challenger banks’ swansong 7 Mar 2024 Nationwide Building Society is paying a high premium for the embattled lender, but accounting gains and the scope to rival giants like Lloyds Banking Group sweeten the $3.7 bln deal. Still, the demise of the most prominent smaller bank suggests the sector is reverting to form.
UK ‘non-dom’ slap is right move for wrong reason 6 Mar 2024 Finance minister Jeremy Hunt scrapped tax benefits for people living in the UK but officially domiciled abroad. That improves fiscal fairness and may raise over $3 bln per year. But the benefits are uncertain and the funds went to pre-election giveaways, not public services.
L&G is an insurer with a fossil fuel-style problem 6 Mar 2024 The $18 bln UK group has underperformed European rivals. New CEO António Simões at least has a booming business in taking on corporate pension schemes. But like Shell and BP’s oil fields these are a finite resource, necessitating a durable Plan B.
Swarming investor gnats circle too widely 6 Mar 2024 New US rules have started helping smaller fund managers make a mark. They’re increasingly needling boards and stinging CEOs. When they flit around bigger targets such as Disney and Crown Castle, however, they’re easily swatted away and become a nuisance for larger activists.
Galderma IPO offers EQT a temporary facelift 6 Mar 2024 The Swiss skin care group is looking to raise $2 bln in a listing to cut debt. At $22 bln, in line with L’Oréal’s valuation, its private equity owners could get decent returns. But with the French beauty giant growing similar products faster, retaining margins may be challenging.
Capital Calls: Reddit’s IPO 5 Mar 2024 Concise views on global finance: Retail investors that flocked to Reddit in 2021 are threatening to bet against the social media site’s own IPO. Momentum may be easier to create going up than down. But boss Steve Huffman has to fight a monster he created.
Bayer’s inertia will make mounting problems worse 5 Mar 2024 The $30 bln seeds and drugs maker has ruled out a rapid breakup. Bayer could have used a consumer health sale to cut debt and offset bigger US litigation costs. Betting instead that it can grow its way out of trouble risks exacerbating a yawning discount to the sum of its parts.
Kyiv’s defence requires European supply-side shock 5 Mar 2024 Europe is not producing the 2 mln artillery shells Ukraine needs, and missile plants are idle. Meanwhile, its stockpiles are shrinking, threatening the region’s ability to defend itself. To crank up production lines, manufacturers will need a steady flow of government orders.
How to solve Europe’s defence riddle 5 Mar 2024 At 360 bln euros, the bloc’s military expenses are three times Russia’s. Yet fragmented defence systems are a problem, Bruegel senior fellow Guntram Wolff tells The Exchange podcast. To improve scale and boost aid for Ukraine, Europe should consider more joint debt.
Excessive UK tax giveaways risk longer-term harm 5 Mar 2024 Finance minister Jeremy Hunt may spend some 15 bln pounds in pre-election fiscal gifts in Wednesday’s budget. He could be tempted to do more – and make life difficult for the next government – by further cutting public services. But that would put the country in a bind.
EU’s $2 bln Apple bite is still more of a bark 4 Mar 2024 Brussels is fining the US giant more than expected for hurting streaming competition. That leaves $2.7 trln Apple open to similar cases. But as with other EU bids to rein in Big Tech, it hikes the cost of doing business more than it shakes up the sector.
Cosmetics IPO application calls for a steady hand 4 Mar 2024 Buyout firm CVC is braving uncertain markets to list retailer Douglas, possibly for 7 bln euros. Shoppers’ appetite for premium makeup despite inflation is a positive sign. Yet the group’s high leverage and competition from Sephora call for a valuation discount to US rival Ulta.
Elliott has limited ammo in UK retail bidding war 4 Mar 2024 The US investment group’s latest $951 mln offer for retailer Currys could have yielded an adequate return. But the target has rejected it. Hiking the offer looks tricky given the ropey UK economy, reduced scope for leverage, and potential rival bidder JD.com’s deep pockets.