Sanofi M&A punt soothes France’s Covid-19 shame 3 Aug 2021 The $131 bln drugmaker bought U.S-listed Translate Bio for $3 bln. CEO Paul Hudson gets a leg up in hot mRNA technology, which trounced the French group’s traditional vaccines during the pandemic. Shareholder returns look distant, but the cost of standing still may be higher.
Li Auto’s Hong Kong debut extends battery hedge 3 Aug 2021 The New York-traded carmaker aims to raise $1.9 billion by adding an HKEX listing. Unlike peers Xpeng and Nio, it sells hybrids, with no pure-electric models on the road until 2023. It’s a wager on a slower energy transition in China that could bring profitability before rivals.
Goldman and Morgan Stanley recalibrate China glory 3 Aug 2021 The U.S. investment banking duo has pocketed $500 mln, or 37% of the available fees, from advising on offshore stock sales this year. That’s up from just 23% before the pandemic. Their dominance can withstand Beijing’s IPO crackdown, but other trends will be harder to combat.
Square backs a truck onto Wall Street’s front yard 2 Aug 2021 The $29 bln purchase of pay-later firm Afterpay makes Jack Dorsey’s fintech outfit more bank-like but without the historical baggage, dense regulation and lengthy rap sheet. Square is still small next to lenders like JPMorgan, but big enough to force them to change their ways.
Allianz’s DOJ tangle will mostly hit M&A ambitions 2 Aug 2021 The $95 bln insurer’s shares fell 10% after it warned a U.S. Department of Justice probe could materially impact earnings. Allianz boss Oliver Baete has a sturdy enough balance sheet to withstand a substantial hit. It may mean fewer deals to augment his growth strategy, though.
Ferrari’s new boss faces early electric test 2 Aug 2021 The EU wants to ban new fossil fuel-powered cars from 2035. That’s likely to force incoming CEO Benedetto Vigna to accelerate the $42 bln sports-car maker’s plans to shift to battery power. How to do that without denting its luxury margins will require some deft driving.
Capital Calls: Aussie oil deal, Fund services M&A 2 Aug 2021 Concise views on global finance: Santos’ improved and agreed offer for Oil Search comes at a discount to its rejected first attempt; Sanne’s dealmaking poker face looks set to be vindicated.
Sunnier HSBC leaves something for rainy day 2 Aug 2021 The Asia-focused bank more than doubled first-half profit to $10.8 bln to generate a 9.4% return after the scary bad-loan outlook improved. Despite a steady turnaround, boss Noel Quinn is paying just a slim dividend. With the virus resurgent, there’s good reason for caution.
UK plc’s latest sale is far from on the cheap 2 Aug 2021 Ohio-based engineer Parker-Hannifin is buying British rival Meggitt for 7 bln pounds including debt. The 70% premium and promises to keep UK jobs point to measly long-term returns. UK investors’ complaints about opportunistic foreign raiders look less and less credible.
Afterpay’s $29 bln Square deal taps new reality 2 Aug 2021 The instalment-payments darling has defied naysayers for years but faces fresh competition from PayPal and Apple. An all-stock takeover by Jack Dorsey’s fintech outfit comes at a discount to a recent valuation peak. Selling now, though, provides a better chance of success later.
Alibaba can shake off its China discount 2 Aug 2021 The e-commerce titan's shares have tumbled 40% from an October 2020 peak as Beijing cracks down on tech. It’s now trading at a big discount to Amazon even though both are growing profit at about the same rate. Alibaba's resilient businesses should help the valuation gap narrow.
Evergrande’s fire sale risks too little too late 2 Aug 2021 The indebted developer sold stakes worth $418 mln in media unit HengTen to buyers including Tencent after its shares tanked. But it is also lending HengTen $260 mln for five years, interest-free. With its stock and bonds plunging, this deal looks both stubborn and desperate.
Exxon saves oil that will have nowhere to go 30 Jul 2021 The $250 billion giant booked its highest profit in more than a year as oil prices top $75 a barrel. Darren Woods’ firm is showing restraint, getting more from pumping less. That’s important to sustain profit now. When the party ends, Exxon may have squandered an opportunity.
U.S. IPO market hits oversupply problem 30 Jul 2021 There are too many companies coming to market, even excluding record numbers of blank-check vehicles. Robinhood’s vaunted offering fell flat, battery maker Clarios delayed its debut, and fruit purveyor Dole downsized. Other IPOs did better, but investors can afford to be choosy.
Capital Calls: China, Disney, Banks, P&G, Fintech 30 Jul 2021 Concise views on global finance: The SEC wants more disclosures on IPO risks related to Beijing regulators; plus Scarlett Johansson’s lawsuit, EU stress tests, consumer prices, and Qatar’s investment in an African fintech.
Andrea Orcel dives for treasure in MPS wreck 30 Jul 2021 Three months after taking charge of UniCredit, the veteran dealmaker is considering a takeover of state-controlled Monte dei Paschi. The Tuscan lender’s capital needs, bad debts and legal woes have scared off other suitors. Strict conditions should help calm wary investors.
Nomura trails in race to cast off Archegos mess 30 Jul 2021 The lender has not laid out how it lost $2.9 bln in the U.S. fund’s collapse although fellow loser Credit Suisse just did so in painful detail. With the Japanese bank’s investment unit still wilting from the hit, recovering profits elsewhere will only help to a point.
Xavier Niel makes virtue of Iliad investor myopia 30 Jul 2021 The French tycoon offered to buy the 29% of the telecom group he doesn’t already own at an 11 bln euro equity valuation. It’s well-timed: dividend-hungry investors have been spooked by Iliad’s rising 5G investments. Lowly valued rivals like Bouygues may look to do the same.
Grab’s tiny deal spotlights big Indonesia turf war 30 Jul 2021 A deal to shore up ties with a Jakarta conglomerate recalls the country’s importance for the super-app’s growth ahead of its $40 bln New York debut, and as top local rivals merge. Grab’s Southeast Asian footprint has benefits, but Indonesia carries outsize strategic value.
Review: Turning Beijing’s playbook against it 30 Jul 2021 China wants to become a global hegemon, Rush Doshi, the White House’s lead China wonk, argues in “The Long Game”. To halt its advance, he suggests copying Beijing’s strategy, and discouraging U.S. corporate engagement with China by tweaking taxes. He has few allies and less time.