Mega-bank M&A goes from impossible to imaginable 28 Dec 2023 After 2008, CEOs saw investment-bank deals as risky while regulators saw them as dangerous. UBS will prove otherwise if it safely and profitably absorbs Credit Suisse. Imitators will not get the same sweet deal, but targets like SocGen and Barclays at least come cheap.
EU tech rules will create clicks, not competition 27 Dec 2023 Brussels wants to force Google, Meta and Apple to open up app stores, messaging networks and search engines. The US giants will have to let startups compete and offer consumers more opt-outs. It’s likely to result in lawsuits and hassle for users rather than rivals for Big Tech.
Man Utd deal is messy substitute at trophy price 27 Dec 2023 Tycoon Jim Ratcliffe’s purchase of a 25% stake values the British club at a hefty $6.2 bln. That still leaves him running behind the Glazer family with no easy path to control. A fuzzy turnaround plan means the Red Devils’ fortunes on the pitch may not recover soon either.
BP and Equinor will find common ground 20 Dec 2023 The British oil major is undervalued against peers and is in a leadership vacuum. That makes it vulnerable to a takeover as US mega-mergers shake up the sector. Daring to tie up with Norwegian ally Equinor offers a powerful hedge and a springboard.
StanChart M&A theory will finally become reality 19 Dec 2023 For years, the bank run by Bill Winters was cheap but dysfunctional. Now, it’s producing significantly higher returns on tangible equity but the valuation remains low. If that persists in 2024, it will be hard for suitors like First Abu Dhabi Bank to resist launching a bid.
Farfetch rescue leaves scattered luxury debris 18 Dec 2023 The struggling online merchant secured a bailout from South Korean e-commerce giant Coupang, which is injecting $500 mln. The deal gives Farfetch a fresh shot at existence, but leaves former backer Richemont wiped out, and its new investor with fresh messes to clean.
Adobe paints brighter future without Figma 18 Dec 2023 Unwilling to fight trustbusters, the design-software giant ditched its $20 bln deal. Since agreeing to pay the inflated price, its own AI plans have wowed investors. Even so, the hype is a bit overdone and its target now gets an extra $1 bln to sketch out new ways to compete.
Vodafone may have to answer Iliad’s Italian call 18 Dec 2023 French tycoon Xavier Niel’s new bid for his UK rival’s business in Italy values it at a chunky 10.5 bln euros. That’s near what he offered last year despite falling earnings at Vodafone’s local arm. CEO Margherita Della Valle may struggle to find a more attractive exit strategy.
Policymakers take divergent paths toward rate exit 14 Dec 2023 Central banks in Europe and the US left borrowing costs untouched this week. But the latter went a step further and unexpectedly promised cuts. In this Viewsroom podcast, Breakingviews columnists explain how ratesetters, who were slow to tackle inflation, could be laggards again.
Powell was pragmatic; Lagarde will have to be 14 Dec 2023 The European Central Bank, like the US Federal Reserve, left its rates unchanged. But unlike Fed Chair Jay Powell, ECB boss Christine Lagarde didn’t imply that lower inflation meant looser monetary policy. A slowing economy and abating price pressures will push her there in 2024.
Antitrust legendarily unpredictable despite Epic 12 Dec 2023 A jury ruled against Google in a case brought by the gaming firm while an emboldened FTC blocked Sanofi from snagging a new drug. Yet Pfizer is pushing ahead with a $43 bln deal. Rainmakers can be comforted that regulators’ front offices aren’t a totally impenetrable barrier.
BoE is a more credible rate-cut sceptic than ECB 12 Dec 2023 Policymakers in London and Frankfurt are unlikely to touch borrowing costs this week. Their challenge is to persuade markets they are not about to start slashing them. Bank of England Governor Andrew Bailey has the easier task, but only because the UK is in worse economic shape.
Soccer will inch towards financial rationality 8 Dec 2023 TV income is stagnating or shrinking in the big European leagues, and regulatory limits on clubs’ spending will soon bite. Chelsea, Man United and others must either do a much better job at monetising their vast global fanbases, or finally clamp down on player salaries.
UK, EU trade détente leans on Chinese threat 6 Dec 2023 The European Union fell in line with UK demands to ease part of Boris Johnson’s Brexit deal. Delaying tariffs on battery parts helps carmakers like Volkswagen sell to Britain and fend off competition from China. But Brussels has reason to be tougher on other issues, like finance.
Qatar Barclays sale raises turnaround stakes 5 Dec 2023 The Gulf state almost halved its holding in the British bank ahead of a strategy update. It suggests little faith that the $27 bln lender will tackle its lowly valuation and investment banking reliance. CEO C.S. Venkatakrishnan needs a bold plan to keep investors happy.
Pound’s strength is less sterling than it looks 1 Dec 2023 The currency was up 4% versus the dollar in November after the UK’s fiscal update and because traders think monetary policy will remain tight in 2024 to curb inflation. Yet a weak economy may require lower borrowing costs. Forex markets can brace for a reversal of current trends.
Bank of England drags Bagehot into the shadows 1 Dec 2023 The 19th-century economist recommended lending freely to stem financial panics. Now watchdogs are pondering how to apply this principle to financial markets dominated by bond investors and unregulated entities. The UK central bank has an idea, but it only works in some cases.
OPEC+ is a weird club for Brazil to want to join 30 Nov 2023 Latin America’s largest economy is mulling joining the 23-strong oil producer group. But OPEC+’s latest 2 mln barrels of daily cuts are not needed to balance the market, will rile the US at a sensitive time, and may increase internal strife. It seems more like a club to leave.
LME win leaves one tricky question unanswered 29 Nov 2023 A court backed the London Metal Exchange’s decision to cancel $12 bln of nickel trades, rejecting a challenge by fund Elliott. The HKEX-owned venue has improved its standards. But the verdict does not address its conflict of being both a regulator and a commercial player.
Britain is case study in death-duty dysfunction 24 Nov 2023 UK politicians have been mulling inheritance tax tweaks. Death duties are good policy, but the British version is beset with exemptions that favour wealthy landowners and pensioners. Given the problem may worsen, there’s logic in cherry-picking from better approaches overseas.