"People’s QE" is more sensible than unconventional 23 Sep 2015 The new Labour leader in the UK wants the government to use newly created money to pay for infrastructure investments. The gains are clear. It’s simpler and more just than borrowing, healthier for the financial system and not necessarily more inflationary. The risks are hypothetical.
Edward Hadas: Migration unpicks globalisation myth 23 Sep 2015 Some economists see the unexpected inflow into Europe as an easy win, adding to GDP and countering ageing. But those changes hardly matter. More important is that migration challenges the idea of a global economy. Political borders still set the economic agenda.
BBA’s $2 bln airfield deal faces bumpy takeoff 23 Sep 2015 The UK-listed aviation services outfit is buying one of its larger U.S. rivals. The operational logic is sound. But the price looks toppy. BBA Aviation will also be left with a heavy cargo of debt – despite funding half the purchase price via a rights issue.
Swiss Re deal sidesteps insurance bad-M&A trap 23 Sep 2015 The Swiss group is paying Cinven 1.6 billion stg for Guardian Financial, a closed-book consolidator. Recent mergers in the sector have tended towards the value-destructive. Speeding up the capital release from Guardian’s policies should mean Swiss Re avoids that bad habit.
Zurich’s loss of RSA nerve dents its credibility 21 Sep 2015 The Swiss insurer has binned plans to buy its UK peer - and issued a profit warning. A deal at the mooted 5.6 bln stg level could have worked, given RSA’s potential. If Zurich doubted RSA’s ability to recover, it shouldn’t have sniffed around in the first place.
Dialog’s U.S. chip deal has macroprocessing risks 21 Sep 2015 The Frankfurt-listed seller of power-efficient microchips is buying Atmel for $4.6 bln. The deal would reduce Dialog’s reliance on Apple, might improve its network-connected chips, and should give decent cost savings. But it brings sizeable integration challenges.
Review: Regulation won’t stop bad banker behaviour 18 Sep 2015 Wall Street’s growing abuse of conflicts of interest is exposed in John Kay’s “Other People’s Money: The Real Business of Finance.” But the remedy is simple. To put an end to these shenanigans, and get bankers to conduct themselves responsibly, incentives need changing.
England will win the Rugby World Cup 18 Sep 2015 The quadrennial battle for the Webb Ellis Cup begins at Twickenham on Friday. The bookies’ favourite is the New Zealand team. But a Breakingviews data-driven analysis suggests the English rose could triumph – with France edging the always awe-inspiring All Blacks into third.
Bud-SABMiller investors punch drunk on synergies 18 Sep 2015 Markets have added $30 billion to the two brewers’ value in response to a mooted merger. A simple analysis suggests that’s akin to saving at least 15 percent of SABMiller’s revenue – close to what AB InBev got from its last big deal. It’s not impossible, but it’s a tall order.
Worldpay IPO looks surer bet than M&A 18 Sep 2015 The private equity-backed UK payments processor is pressing ahead with a $1.4 bln IPO, despite a takeover tilt from Ingenico. The French company wants to create a payments giant, but the financing could be a stretch and scupper a deal. The float is the safer option.
Corbyn’s good idea on EU outweighs the bad 18 Sep 2015 The new opposition leader will campaign to stay in the European Union in the UK’s forthcoming referendum. Less smart is Jeremy Corbyn’s vocal support for a financial transactions tax, which could hit growth. Still, investors will take a duff levy over EU isolation.
Electra’s activist still has everything to prove 18 Sep 2015 Sherborne, the activist investor run by Edward Bramson, is revisiting last year’s bid to shake up the UK-listed investment trust. This time, Bramson seems more exercised about investment performance than board seats. He will need better arguments than those already rejected.
Bud’s mega-beer deal will brew global reset 16 Sep 2015 After years of speculation, AB InBev has approached SABMiller about a takeover that could value the combined entity at around $280 bln. The giant would complete global consolidation of the brewing industry and lead a new round of regional disposals, spins and amalgamations.
Unions’ modern foe is worker apathy 15 Sep 2015 British trade unions are up in arms about a plan to toughen strike laws. But they should also worry that only a quarter of workers are members. Gaps between the richest and the poorest incomes tend to be narrower in developed countries where more of the workforce is unionised.
Rob Cox: The pope, Bernie, Jeremy walk into a bar 15 Sep 2015 … only to find they have far too much in common to make a joke of their fictional congregation. On economics, the Vermont senator surging in Democratic polls and the new UK Labour leader owe more to the bishop of Rome’s encyclical than prevailing capitalist orthodoxy.
Glencore model is battered but not broken 14 Sep 2015 Ivan Glasenberg’s mining creation has been wrong-footed by commodity prices, China, and shareholder worries about debt. The pressures may undermine Glencore’s premium valuation and its penchant for doing big deals. Its mix of trading and mining, however, is logical and robust.
Corbyn’s rise may help Britain stay in EU 14 Sep 2015 The UK’s opposition Labour party has chosen the hard-left London MP as its leader. Jeremy Corbyn is no fan of the European Union, and could conceivably vote to leave. But the incumbent Tories could equally try to head him off via concessions that gee voters to stay in.
Cameron’s EU bind has a Marxist tinge 11 Sep 2015 A European court ruling on what qualifies as working time has irked employers and delighted unions. Prime Minister David Cameron faces a dilemma as he tries to renegotiate Britain’s ties with the EU before a planned referendum. Satisfying one camp risks alienating the other.
Consolidation gives betting sector a vital hedge 11 Sep 2015 Gambling companies have laid $11 bln M&A bets year-to-date. Paddy Power, Betfair, GVC, Ladbrokes are all hoping to defray tax, compliance and technology challenges by adding scale. With internet regulation still evolving, more operators may be pushed into defensive tie-ups.
Bank watchdogs tie themselves in knots over TLAC 10 Sep 2015 Financial regulators are throwing a bone to sprawling global banks by watering down plans for what happens if a lender goes bust. Putting the likes of HSBC on an even footing with rivals structured differently is justifiable. But it makes resolving crises that bit harder.