US antitrust push invites creative dealmaking 4 Apr 2024 Policymakers and trustbusters are eyeing new restrictions on mergers and acquisitions. In this Viewsroom podcast, Breakingviews columnists unpack some imaginative workarounds being used by companies ranging from Big Tech to fast food.
McDonut is a happy meal without M&A mess 26 Mar 2024 Krispy Kreme will sell donuts at McDonald’s, sending shares in the pastry maker up 25%. That cuts costs to build stores, akin to synergies, while the $200 bln burger chain takes on little risk. In a world with high rates and harsh trustbusters, it’s a smart twist on dealmaking.
Starbucks union is labor’s mighty mouse moment 6 Mar 2024 An organization representing workers withdrew its board nominees for the $103 bln coffee company after getting some concessions, which look perfunctory. But the structure of Starbucks’ workforce isn’t amenable to successful collective bargaining. Even a small labor win is a win.
Capital Calls: HSBC, Delivery Hero 30 Jan 2024 Concise views on global finance: The global bank will pay a 57 mln pound penalty for misreporting depositor protection data; the Frankfurt-listed meal delivery company has sold a 4.5% stake in rival Deliveroo, at a loss.
Diageo investors seem braced for a beerier future 30 Jan 2024 The $78 bln drinks giant’s sales of spirits fell in the second half of 2023, but Guinness held up. If investors thought Diageo could hit its sales targets, it would be worth more. One takeaway is that they think more of its future revenue could come from less highly valued beer.
Capital Calls: UK real estate merger 11 Jan 2024 Concise views on global finance: LondonMetric’s all-share move for domestic peer LXi isn’t a bargain, but creates a 4 bln pound landlord with benefits for both sides.
Starbucks strike is a union buzzkill 16 Nov 2023 Baristas at 200 stores will walk out during the $118 bln chain’s “Red Cup” promotion. It’s bold given the state of organized labor, but threatens little impact. A coffee shutdown just isn’t as disruptive as freezing capital-intensive, lengthy production cycles for cars or movies.
Capital Calls: McDonald’s resilience 30 Oct 2023 Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.
Apollo may get noodle LBO thrown back in its face 12 Oct 2023 The buyout group could gobble up the UK-listed owner of the Wagamama chain for $862 mln. It looks like a good deal for the acquirer. Apollo’s decision to drop its John Wood takeover this year shows it’s no soft touch, but investors can still hold out for a better dish.
Capital Calls: Deliveroo 14 Sep 2023 Concise views on global finance: The UK food delivery company’s shares rose 5% amid hopes of a potential deal, but a rich takeout looks unlikely.
Capital Calls: Virgin Galactic 16 Jun 2023 Concise views on global finance: Shares of Richard Branson’s space tourism company rocketed 30% higher on news it would launch its first commercial flight in two weeks. The customer demand required alongside competition from Elon Musk and Jeff Bezos make the valuation a moonshot.
Pricey services are weary ratesetters’ last battle 1 Jun 2023 The rising costs of flights, restaurants and concerts are hampering central bank efforts to drag consumer price inflation back down to 2%. In the US the post-pandemic consumption boom is fading. In Europe and the UK, though, higher wages are prolonging the fight.
Chipotle’s burrito spat heats up restaurant wars 6 Apr 2023 The US fast-casual eatery sued rival salad chain Sweetgreen for trademark infringement over its signature chicken bowl. Although the fight ended amicably, it demonstrates the lengths to which scrappy restaurant operators will go to chase consumer dollars, and what’s at stake.
Capital Calls: Nike, Stablecoins, Meme stocks 22 Mar 2023 Concise views on global finance: The Air Jordan maker grew quarterly revenue 14% despite inventory woes and China’s slow reopening; diverging demand for Circle and Tether cryptocurrencies raises questions about how investors are assessing risk; and GameStop’s shares surged 40%.
Supersized restaurant valuation gaps due to shrink 21 Feb 2023 As fears of an economic slump persist, consumers may swap Chipotle and its peers for cheaper fare served up by the likes of Taco Bell. Higher labor and ingredient costs are squeezing all eateries, but the premium investors pay for ones higher on the food chain looks overcooked.
Capital Calls: McDonald’s, Spotify 31 Jan 2023 Concise views on global finance: The burger chain’s comparable sales growth despite rising prices proves there’s pricing power at the bottom of the market; shares in the $21 bln music-streaming service leapt after founder Daniel Ek unveiled rapid subscriber growth.
Capital Calls: Rio Tinto, Grocery delivery M&A 9 Dec 2022 Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.
Capital Calls: Cineworld needed AMC’s apes 19 Aug 2022 Concise views on global finance: The U.K.-based cinema chain is preparing for bankruptcy, according to the Wall Street Journal, while similarly debt-beleaguered AMC is still standing – an object lesson in the power of becoming a favorite of retail traders.
Food delivery’s next gig is software-as-a-service 10 Aug 2022 As demand for takeaways slows, $28 bln DoorDash and rivals are searching for new sources of revenue. One option is to sell their tech to food retailers. But that assumes others can make a bigger success of a business model that has struggled for profitability.
McDonald’s serves nuggets of inflationary insight 26 Jul 2022 Same-store sales rose nearly 10% in the second quarter. Rising menu prices have also yet to deter customers, suggesting the Golden Arches has still managed to hang on to recession-proof qualities. If customers keep trading down, however, that balance will be harder to strike.