Defence

Guy Hands’ misery offers bondholders a free lunch

16 May 2023

The Terra Firma owner lost a legal fight with the UK, which wants to end a controversial housing privatisation. That could force Hands to sell properties and repay 4 bln pounds of debt at a premium to its market price. It’s the kind of bet the former bond trader might have loved.

Italy’s Leonardo risks missing defence bonanza

3 May 2023

The $7 bln Italian electronics and helicopter group, 30%-owned by the state, trades at a discount to peers. Leonardo is not fully capitalising on rising EU military budgets after the Ukraine war. Investor support to add external expertise to the board is sorely needed.

Italy’s corporate power grab nears expiry date

18 Apr 2023

Premier Giorgia Meloni promised to rely on merit to pick new directors at state-backed firms like $54 bln Eni and $7 bln Leonardo. Instead, she’s stuffing boards with loyalists. Hedge fund efforts to push back at $64 bln green star Enel are a reminder the market also has a say.

Sinking Russian military crafts new arms winners

12 Apr 2023

Moscow’s share of global arms exports shrank by 27% over the last five years, to the benefit of the US and France. Deprived of Western technology, Russia’s defence industry has struggled to adapt. Its traditional customers also aren’t impressed by its poor performance in Ukraine.

China sanctions red line has shifted westward

21 Mar 2023

President Xi Jinping’s visit to Moscow has rekindled concerns Beijing could get too cosy with Vladimir Putin. Arming Russia would likely trigger a joint Western diplomatic response even in the absence of a Chinese invasion of Taiwan. Beijing is walking a thinning tightrope.

War puts defence firms on investors’ radar

21 Feb 2023

The Ukraine conflict is prompting once-wary capital to engage with defence and aerospace companies. In this Exchange podcast Lorenz Meier, CEO of drone software firm Auterion, accepts ethical issues remain. But defence tech startups should brace for new venture capital cash.

Ukraine yet to make defence a safe investor haven

20 Feb 2023

Kyiv’s pressing call for weapons to defeat Russia dominated a top security forum in Munich. With defence budgets rising, some investors and banks are tempted to engage more with military hardware firms. For most, however, lethal weapons will remain a no-go investment zone.

Economic war with China would be MAD

14 Feb 2023

The prospect of mutually assured destruction averted nuclear conflict during the Cold War. Hopefully, fear of the economic equivalent will stop a showdown with China. But after the shooting down of a Chinese balloon, tensions are rising and errors are possible, says Hugo Dixon.

Finland’s Uniper hit best seen as defence spending

12 Jul 2022

Helsinki wants Berlin to rescue the ailing German energy group, but limit the hit to Finnish owner Fortum. Germany doesn’t agree. Finns would be better off seeing any dilution from a forthcoming capital hike as part of the cost of de-Russifying. Like the cost of joining NATO.

Capital Calls: Spirit dogfight costs more each day

21 Jun 2022

Concise views on global finance: Hostile suitor JetBlue bumped up its offer for the budget airline. The bidding war with rival Frontier Airlines is getting more expensive, even as the cost of corporate debt – and thus the burden for the winning suitor – keeps rising.

Ukraine truce or not, pre-war order is gone

22 Mar 2022

Investors are cheering any progress in talks between the country and invading Russia. But even if the fighting stops, the West won’t lift sanctions right away. Relations with Russia will take years to mend. And Europe will still crank up investment in energy security and defence.

Future militaries will be pricey and fully loaded

18 Mar 2022

Western armies may get an extra $100 bln a year to counter Russian aggression. Orders for tanks, missiles and bombers have boosted defence stocks like Britain’s BAE and Germany’s Rheinmetall. NATO allies will also need more soldiers and revamped nuclear arsenals.

Gauging the global backlash against Russia

10 Mar 2022

The shockwaves from President Vladimir Putin’s invasion of Ukraine are reverberating around the world. In our Viewsroom podcast, Breakingviews columnists debate the country’s isolation, the impact on Asia, Europe’s plan to wean itself off Russian gas, and the fallout for banks.

Capital Calls: Buffett, Sanctions, Defence, Canada

28 Feb 2022

Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.

Germany is turning fiscal exceptions into the rule

28 Feb 2022

Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.

Capital Calls: Playtech breakup

3 Feb 2022

Concise views on global finance: After investors rejected a 3.2 bln euro buyout offer from rival Aristocrat, a breakup of the gambling software maker looks the best way to maximise value.

Defense deal crackdown is a bipartisan affair

25 Jan 2022

After killing Nvidia’s $40 bln Arm deal, U.S. regulatory agency FTC’s head Lina Khan won Republican support to block Lockheed Martin’s deal to buy Aerojet. Defense companies have historically gotten a free antitrust pass. Blocking a merger in that sector leaves little hope for others.

DJI is a more elusive U.S. target than Huawei

16 Dec 2021

Washington is putting a bigger squeeze on the Chinese drone maker by blocking American investment in the company. But unlike Huawei’s telecom gear, DJI products are widely used in the United States, including by police. Western rivals are tiny, making an outright ban tricky.

Deal crackdowns boost buyers without baggage

29 Oct 2021

U.S. merger watchdog Lina Khan is stepping up promises to thwart serial acquirers’ deal ambitions. What’s bad for the industry titans in the crosshairs, though, could be a boon for buyout barons and lawyers dreaming up novel ways to deal with the roadblocks.

Capital Calls: U.S. deal watchdog, Italian IPO

5 Oct 2021

Concise views on global finance: Blog posts from the FTC’s competition chief reveal plans to go way bigger when extracting concessions from merging companies; Italy's $5 billion security group Leonardo is taking a second run at listing its DRS unit in the United States.