Pharma pays for getting too comfy with Trump 11 Jan 2017 The president-elect accused the industry of "getting away with murder" on drug prices. Investors had dismissed his earlier pledge to renegotiate costs as campaign rhetoric easily outweighed by tax cuts. The stock drops caused by his latest stance should force a broader rethink.
Tillerson misses chance to overcome Putin problem 11 Jan 2017 A U.S. Senate hearing mostly made the nominee for secretary of state look like a model candidate. Mealy-mouthed answers on sanctions against Russia, though, and his concern for their impact on businesses, betrayed his decades at Exxon. It's a flashpoint even for some Republicans.
Trump business-conflicts failure lines up gridlock 11 Jan 2017 Restricting dealmaking and putting his sons in charge of his firm falls short of the blind trust ethics standards demand. It's a gift to Senate Democrats, whose criticism of any lapses could stymie the president-elect's plans for everything from the economy to the Supreme Court.
Beware cracks in Trump’s infrastructure plan 11 Jan 2017 Two of the president-elect's advisers have drafted a superficially appealing outline, but tax credits involved are giveaways to businesses and investors. The assumptions are fanciful, too. While new ideas are welcome, spurring $1 trln of funding demands a bigger government role.
Holding: Dealmakers can expect big MAC attack 11 Jan 2017 Unnerving tweets and fickle policy ideas from Donald Trump add to angst already undermining mergers like Abbott's $5.8 bln bid for Alere. Buyers invoke material adverse change clauses for escape purposes, but they're almost never enforced in court. That may be about to change.
VW saved by its own failures in the U.S. 11 Jan 2017 The $4.3 bln settlement of criminal charges lifts the carmaker's Dieselgate costs to above $24 bln. VW can cope, but only thanks to its chronic underperformance in the U.S. Had the group met its U.S. targets up to 2015, it would be facing a crushing bill three times that size.
Ma’s job offer to Trump is no Chinese peace pipe 11 Jan 2017 Alibaba founder Jack Ma met with the U.S. president-elect and pledged to create 1 mln jobs. Trump, well-pleased with this tribute, says he and the Chinese e-commerce tycoon will do "great things" together. There is less to both statements than meets the eye.
Fiat and GM show limits of shareholder optimism 10 Jan 2017 The surge in sales of U.S.-made trucks and SUVs is boosting the two automakers' profit and stock prices. It should also help keep the "America first" president-elect at bay. Longer-term challenges, though, are keeping most carmakers' valuations deflated.
Wacky Yahoo rebrand obscures Verizon deal risk 10 Jan 2017 The firm is pressing on with the sale of its internet assets. Then boss Marissa Mayer will step back and what's left - mainly a stake in Alibaba - will be renamed Altaba. More importantly, though, the $4.8 bln deal is still far from certain. Mayer's task is to ensure it happens.
Trump enforcer hearing leaves Wall Street no wiser 10 Jan 2017 U.S. senators grilled attorney-general pick Jeff Sessions on immigration, civil rights and the president-elect. Controversial M&A like AT&T's $85 bln takeover of Time Warner and insider-trading issues were largely ignored. The financial world will just have to read the tea leaves.
Bets against Iraq’s OPEC cuts are premature 10 Jan 2017 Traders may have jumped the gun betting Baghdad won’t stick to an output deal. The cartel's second-largest producer has little to gain reneging on the pact and could struggle to maintain record shipments without investment. Higher prices help its cause more than extra barrels.
U.S. nuclear closure points to economic meltdown 9 Jan 2017 New York Governor Andrew Cuomo hailed a decision to shut down the Indian Point facility as a win for the environment. Low natural gas prices are what really pulled the plug. Carbon trading might give nuclear energy a fighting chance, but good luck with that under President Trump.
Trump boardroom fails early due-diligence test 9 Jan 2017 Nine of the president-elect's cabinet picks face a Senate grilling this week. The likes of former Exxon boss Rex Tillerson and billionaire Wilbur Ross were chosen for their investment nous. Conflicts of interest and missing financial disclosures, however, can be bad for business.
Takeda exemplifies Japan’s expertise at overpaying 9 Jan 2017 The $34 bln drug maker is the latest to pay over the odds. It's shelling out a 75 pct premium for Ariad, a biotech with a middling cancer drug. Takeda needs to refill its pipeline as patents on existing treatments expire, but the $5.2 bln purchase price looks too generous.
Pet health deal may become Mars’ best friend 9 Jan 2017 The candy giant is buying VCA for $7.7 bln plus debt. The U.S. animal-healthcare provider regularly swallows smaller vet outfits in a growing $63 bln industry Mars already knows. That makes the 31 pct premium look digestible. The purchase also hedges against any sugar backlash.
Anglo-U.S. trade exposed to specialness deficit 9 Jan 2017 The UK’s “special relationship” with America gets more crucial as it moves towards a clean break with Europe. Transatlantic imports and exports are balanced – which should please President-elect Donald Trump – yet Britain has more to lose. Finance looks particularly vulnerable.
Mercedes now biggest, but BMW is still better 9 Jan 2017 After 11 years, the offshoot of Germany’s Daimler recaptured its position as the world’s largest premium carmaker by volume. Rival BMW may have sold fewer cars in 2016. But it still beats Daimler in important ways, like meeting operating margin targets 26 quarters in a row.
Air Products has promising formula for Chinese M&A 9 Jan 2017 The $31 bln gas giant is circling Hong Kong-listed Yingde. Inbound Chinese M&A has all but evaporated but Air Products' timing is good: big debts and a boardroom fight have shrunk the target's market value to $700 mln. An existing Chinese presence would help de-risk any deal.
Obama leaves Trump with a tough job on jobs 6 Jan 2017 Creating nearly 16 mln new positions since the post-crisis nadir is pretty good. So is an unemployment rate under 5 pct. Not all labor indicators are so positive, but wages may finally be on the march. The new president's bold plans could clash with late-cycle economic realities.
Review: Undermining the foundations of rationality 6 Jan 2017 Economists Daniel Kahneman and Amos Tversky changed our understanding of how people make decisions. "The Undoing Project" by Michael Lewis is a vivid and insightful account of their partnership. However, it also raises questions about why faith in rational humans is so enduring.