Americas

Telegram and X expose tech platforms’ new reality

12 Sep 2024

The arrest of Pavel Durov, founder of the controversial messaging app, and the ban of X in Brazil shows state officials are not afraid to intervene in Big Tech. In this Viewsroom podcast, Breakingviews columnists debate what it means and how CEOs should manage the threat.

Buyout barons’ dirty secret shows hard times ahead

12 Sep 2024

Since 2013, 47% of the value created by private-equity dealmakers came from selling companies at higher multiples than they paid. That boon is fading now that valuations seem stretched. KKR, Blackstone and others face lower returns or fights over high-growth targets instead.

Apple offering a peek at AI’s financial reality

11 Sep 2024

The iPhone 16 is due in stores soon, optimized for artificial-intelligence. It’s unclear if business models exist for the costly and hyped tech. Sales of the new devices may signal whether consumers will pay for it or if Silicon Valley has a solution seeking a problem.

There’s no debate: big US spending is a tough sell

11 Sep 2024

Donald Trump and Kamala Harris squared off on immigration, abortion and, strangely, pets. Missing, however, were any grand fiscal plans. Promises of tax cuts and tariffs would cost the government less, after infrastructure, Covid-19 and other initiatives chewed up some $13 trln.

Rentokil’s US bug invites management fumigation

11 Sep 2024

The $13 bln pest controller’s shares fell 18% amid a new warning on growth. CEO Andy Ransom’s depleted credibility will embolden activist Nelson Peltz. A new boss or a private equity owner might better protect Rentokil’s US market share amid its tricky Terminix integration.

Fed’s Basel climbdown leaves foot on rules ladder

10 Sep 2024

Facing intense industry opposition, top US regulator Michael Barr proposed softer new capital rules for lenders like JPMorgan. There’s good reason to revisit many pain points. But despite shaving maybe $100 bln off the burden on the biggest banks, a philosophical shift remains.

Ireland can use unwanted taxes to keep Apple sweet

10 Sep 2024

Europe’s top court told the iPhone maker to pay $14 bln in corporate levies. Dublin opposed the move for fear of driving away Big Tech. But PM Simon Harris can up the country’s allure by spending the funds on infrastructure, and IT giants have limited choices for EU headquarters.

AngloGold’s mid-size miner pounce may set a trend

10 Sep 2024

The US-listed group is paying $2.5 bln for Egypt-focused rival Centamin. High gold prices make it easier for bigger fish to bulk up via share-based deals. Rising production costs and future price volatility suggest more relative minnows could say yes to an adequate premium.

Big Pharma lacks motive to prep for new pandemics

10 Sep 2024

The WHO warned the next outbreak may be 20 times more deadly than Covid-19. Moderna’s Corona surge should encourage drugmakers to build up vaccine units for the next virus. But with investors giving little credit for one-off jabs, there’s not much incentive to invest.

US Nippon Steel rebuff would be cruel and kind

10 Sep 2024

Washington may block the Japanese company's $15 bln takeover of US Steel. It'd be a blow to Nippon's plans to offset growth challenges at home and overcapacity from China. But it has other options that may eventually yield better returns than it could extract from its US target.

Murdoch dissident chases another unpromising lead

9 Sep 2024

Hedge fund Starboard wants to rid $15 bln News Corp of super-voting stock that gives the media mogul and his family de facto control. Other founders have relented elsewhere. Narrowing the Wall Street Journal owner’s bad-governance discount, however, will be as elusive as ever.

Vinted’s price markup rests on limitless growth

9 Sep 2024

Private equity shop TPG may buy a stake in the second-hand clothing site at a $5.5 bln valuation, the FT reported. It implies a much steeper multiple than the main listed peer. That may be fair if rapid growth persists, but the performance of other marketplaces are a red flag.

Trump’s super-tariff is dangerously simple

9 Sep 2024

Slapping up to 20% on all imports, and triple that on Chinese goods, is easy to understand, and to implement. The consequences, though, are complex and likely to be mostly harmful. The best hope is that this bad idea, intended to boost US prosperity, leads to some better ones.

Fuji Soft’s $4 bln sale needs a rethink

9 Sep 2024

Shares of the IT software specialist are trading 7% above the price of an agreed takeover offer from buyout firm KKR, and above a higher price its rival sponsor Bain is dangling at the target. After wrestling with a sale, the Japanese company has left too much value on the table.

Trump’s SWF size envy not grounded in reality

6 Sep 2024

Sovereign wealth funds are created when countries run consistent budget surpluses and cash can be redirected towards creating long-term income. That’s not even close to a luxury the US has. Done poorly, they become a honey pot for politicians to reward the connected.

Nordstrom buyout looks like least bad fit

6 Sep 2024

The US department store chain’s founding family and a Mexican retailer have offered to take it private in a $3.8 bln deal. The share price has risen since a deal was first mooted, but Nordstrom’s prospects haven’t. Its directors ought not to let this one get away.

Buyout barons’ music fest punt is oddly compelling

6 Sep 2024

Private equity and countercultural live events might seem worlds apart. Yet KKR’s recent $1.4 bln purchase of the Superstruct group that runs 80 music festivals has many of the factors buyout shops look for. Scope for a healthy return implies more will take the plunge.

Central banks lay liquidity trap for stock markets

6 Sep 2024

The US Federal Reserve and its major peers took $200 bln out of the financial system in early August, likely deepening a global equity slump. Ratesetters control the money supply for good reasons. But their huge presence and investors’ herdlike behaviour add new layers of risk.

Couche-Tard gives 7-Eleven owner easy defence path

6 Sep 2024

The Japanese company's board unanimously rejected its Canadian suitor's $39 bln takeover offer. The 21% premium is well short of Seven & i's breakup value. For this deal to be a real test of Japan's receptiveness to foreign M&A, Couche-Tard needs to work a whole lot harder.

China’s global battery ram will be hard to stop

6 Sep 2024

The US and EU have erected tariffs to limit imports of electric vehicles. The People’s Republic has an even bigger lead in batteries. New tech gives rivals a chance to muscle in, but Chinese cellmakers’ head start means resisting giants like $115 bln CATL will come at a cost.