Americas

Even smooth bank stress-test results fray nerves

27 Jun 2024

Big US lenders aced their annual checkups, and have nearly $300 bln of extra capital, per Breakingviews math. Much of it will be tied up for maybe a year until the Fed finalizes its botched revisions to Basel rules. For now, the exams just show shareholders what they’re missing.

Miner M&A spotlight may shift to Teck and Freeport

27 Jun 2024

BHP’s failed pitch for Anglo American leaves a vacuum for keyed-up mining bankers to fill. Canada’s $25 bln Teck and $70 bln US rival Freeport-McMoRan both offer purer-play copper options. Either could become targets for bigger fish, or even drive consolidation themselves.

A South Korean EV reversal would inspire copycats

27 Jun 2024

Splitting out electric-car related assets was a popular ploy for firms like Renault and Geely to charge up valuations. But now conglomerate SK might go the other way by merging its loss-making battery business with another unit. As EV demand slows, similar reversals may follow.

VW and Rivian wheel out a more practical EV model

26 Jun 2024

The German carmaker is investing up to $5 bln in its smaller US rival and a new JV to develop software. Many such tie-ups have ended badly, but in this case it’s more than just funding a flashy but cash-burning newcomer. The big incumbent here gets access to proven technology.

Banks grab AI-generated tiger by the tail

26 Jun 2024

Sleeker IT systems, stronger fraud defenses and other algorithmic upgrades could yield nearly $200 bln of profit for lenders by 2028, one study finds. An efficiency revolution isn’t evident in valuations, however. The new tech may pay higher dividends to customers than investors.

Bond traders’ rate-cut party is yet to get going

26 Jun 2024

Central banks from Ottawa to Frankfurt are reducing rates. Bond prices should be rallying, but an index of euro zone debt is up just 0.1% since the ECB eased borrowing costs this month. While French elections are one reason why, tight US monetary policy is the key constraint.

Spirit doesn’t deserve Boeing’s cash

25 Jun 2024

Separating the supplier from the aircraft maker in 2005 benefited neither, so a deal to reunite them makes sense. Spirit’s shareholders probably don’t want Boeing’s stock. But the target’s woes compounded the acquirer’s problems. Ties that bind the two leave Spirit few options.

GameStop is becoming a poorly run bank

25 Jun 2024

The video-game retailer accrued $4 bln of cash after issuing stock into a renewed meme frenzy. High rates mean it should earn enough interest to paper over losses. Without the shenanigans, GameStop would struggle to operate. Investors would be better served by a savings account.

Boeing is just too big to jail

24 Jun 2024

The US government may pursue criminal charges against the $105 bln planemaker for lapses related to two fatal crashes. But Boeing’s importance as an exporter and defense contractor takes stiff penalties off the table. It’s the unhappy cost of nurturing national champions.

Remington owner runs low on takeover-defense ammo

24 Jun 2024

Vista Outdoor keeps spurning a $3 bln buyout bid in favor of a breakup. With the shareholder vote nearing, its Czech suitor just offered more for the bullets brand. The camping- and shooting-gear unit left behind, however, is risky recompense for more cash and a political fight.

Red Sea gives shipping an Uber-style price surge

24 Jun 2024

Container rates have spiked well above their level when Houthi attacks first shut the Suez Canal. Surging demand as exporters seek to get ahead of looming trade tariffs is one reason why. But that in turn would be easier to manage if traffic didn’t have to go round Africa.

How to scale up the G7’s $50 bln Ukraine loan

23 Jun 2024

The club of rich democracies navigated many obstacles to lend to Kyiv. They found ways that could side-step U.S. Congressional approval and avoid increasing EU countries’ debts. They could use similar methods if they are prepared to give Ukraine the $320 billion it really needs.

The ragged end of private equity is unspooling

21 Jun 2024

Carlyle’s $7 bln purchase of Veritas was part of a multi-year software buyout frenzy, reaching over $100 bln in deals in 2022. Fueled by cheap debt, the bill is now due with rates up and results down, sparking a fight with creditors including feisty Elliott. It won’t be the last.

Building the WeWork of workouts will be a stretch

21 Jun 2024

Life Time is flexing its luxe brand of gyms to fitness-crazed New Yorkers and Bostonians. Selling property slims the business model, but fattens the long-term rents backed by uncertain membership fees. Putting mega-clubs into malls and office towers also bulks up the fad factor.

A warning from history about large-cap stock booms

21 Jun 2024

Five decades ago, shares in a handful of large companies like IBM and McDonald’s propelled the US stock market to new highs before collapsing. As investors pile into tech giants led by $3.3 trln Nvidia, the earlier period may be instructive for those who believe history rhymes.

Shein’s tax perk is as American as apple pie

20 Jun 2024

The fast-fashion retailer and its rival Temu skirt import levies courtesy of a loophole critics want to close. That’s easier said than done. In any case, the Chinese-founded firms aren’t the only ones to build empires with the aid of quirks in the US tax system.

Trillionaire club throws an indulgent theme party

20 Jun 2024

New $3.3 trln leader Nvidia and the five other US members are powered by AI hype. It makes chipmaker Broadcom a good prospect for induction soon. Eli Lilly could easily be the first anti-obesity joiner. Megatrends sparking giddy valuations also make the group much less exclusive.

European bosses can only envy Elon Musk

20 Jun 2024

The Tesla chief’s $56 bln pay package is particularly vertiginous, but even less-blessed US CEOs do far better than their European peers. In this Viewsroom podcast, Breakingviews columnists discuss how the pay gap shapes executive habits across the Atlantic.

Tate & Lyle’s sour M&A may have nicer aftertaste

20 Jun 2024

The $3.2 bln food company is paying $1.8 bln for US-based ingredient business CP Kelco. An unappetising-looking return may be one reason why Tate & Lyle shares lurched down. But the deal makes strategic sense, and there may yet be a path to sweeter numbers.

Mining M&A stokes coal race against cleaner power

20 Jun 2024

Anglo American will soon offload dirty deposits used to make steel as part of CEO Duncan Wanblad’s overhaul. Rival sales suggest there should be plenty of suitors. Coking deals can pay off for buyers if prices stay high and green options develop slowly, but neither is assured.