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World economy’s star athlete may run out of puff

23 Apr 2024

The IMF crowned the United States as the champion of global growth at last week's summit. A predicted rise in GDP of 2.7% this year is welcome as Europe and China struggle. But high debt and hard-to-repeat gains in productivity and the workforce will limit American staying power.

European airlines’ hot summer belies sector clouds

23 Apr 2024

Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.

Private credit paints a new scream for banks

22 Apr 2024

Lending against wealthy patrons’ art has been dominated by financial institutions. Sotheby’s $700 mln sale of bonds backed by such loans offers non-bank rivals a template to upend the status quo. A rebounding securitization market can feed this machine, if it fits a careful mold.

Swedes’ gaming split is far from a next-level fix

22 Apr 2024

Struggling $3 bln Embracer will divide itself into three discrete companies. Leveraging up the group’s board games arm and splitting out hit-and-miss blockbusters and steadier mobile games makes sense. But it’s unlikely to unlock value akin to the Swedish firm’s glory days.

CVC insiders’ delayed payday is still pretty sweet

22 Apr 2024

The soon-to-list buyout shop will bar employees from selling stakes for three years, and then only let them do so slowly. It helps get IPO investors on board, and suits bosses too. By the time they cash out, CVC should be worth a lot more than its 13 to 15 bln euro float price.

What to do about the EU’s relative decline

22 Apr 2024

The European Union will become marginalised if it continues to shrink compared with other regions. Two former Italian prime ministers, Enrico Letta and Mario Draghi, are coming up with remedies. But anxious leaders may lack the will to drink the necessary medicine.

Winner’s curse unfairly haunts $7 bln paper deal

19 Apr 2024

UK-based Mondi dropped its pursuit of DS Smith, handing victory to rival US bidder International Paper. The victor’s shares have lagged the sector, suggesting its investors see little value in the deal. If the promised cost savings appear, that view may be too pessimistic.

ESG is ghost at global retailers’ annual feast

19 Apr 2024

LVMH, Amazon and peers gathered in Paris for the industry’s yearly shindig. The growth areas in the $30 trln sector are Shein-style cheap garments and the Middle East. Both jar with retailers’ previous focus on environmental, social and governance factors.

Shell’s value gap is more strategy than geography

19 Apr 2024

CEO Wael Sawan may shift the $230 bln UK oil giant’s listing to New York if a discount to rivals like Exxon Mobil persists beyond 2025. But Shell’s shifting priorities, slower growth, and unreliable dividends weigh on its valuation. Those factors defy a superficial fix.

UK music fund may walk off stage without encore

18 Apr 2024

Hipgnosis Songs Fund accepted $1.4 bln in cash from US rival Concord Chorus. The 32% premium pitches songs by Neil Young and Shakira at the lower end of their shrunken fair value. With higher-for-longer rates, it’s far from clear that its Blackstone-owned manager will pay more.

Spain’s utility saga calls for tough balancing act

18 Apr 2024

The UAE wants to buy 40% of 22 bln euro Naturgy from its private equity owners. That would usually require a full takeover, but Madrid has form on protecting key infrastructure. Spain will have to balance its desire to retain control with the need not to scare its bidder away.

UAE is timely reminder of climate plan B urgency

18 Apr 2024

Torrential rains have flooded Dubai’s airport. Spending cash to prepare for the impact of global warming often takes a back seat to slashing emissions. The more richer states upgrade climate defences, the more they highlight the need to help poorer ones do so too.

Telecom tycoon ensnared by his hefty debt machine

18 Apr 2024

Patrick Drahi built the ocean-spanning Altice empire on the back of aggressive dealmaking and $60 bln of borrowing. The bill is coming due with interest rates elevated. In this Viewsroom podcast, Breakingviews columnists discuss what comes next as bondholders get restless.

Czech Sphinx may need to pay up for UK mail morsel

17 Apr 2024

Daniel Kretinsky has been rebuffed in a bid to buy the 72% of 3 bln pound International Distributions Services he doesn’t already own. The Czech billionaire has deep enough pockets to pay more for the owner of Royal Mail. But his target’s board has grounds to dig its heels in.

Guess what: Boeing can be spelled without G and E

17 Apr 2024

Instead of investing in a new model, the 737-maker embraced the gospel of Jack Welch and returned $60 bln to shareholders over a decade. McDonnell Douglas suffered a similar fate before infusing Boeing with GE’s toxic ethos. It’s not too late to excise it and build another plane.

EU bank-saving raid can boost tired capital market

17 Apr 2024

European households have 33 trln euros of rainy-day cash, but not much invested in equities. Former Italian PM Enrico Letta reckons savers could fund the green transition if they had access to better stock funds. Forcing countries to lower tax and other barriers would help.

Luxury’s great divide will get more striking

17 Apr 2024

Sales at $420 bln LVMH rose a dull 3% in the first quarter. The Tiffany-to-Dior behemoth’s insipid performance points to a broader fragility within the sector. With revenue in the luxury industry flattening, the gap between winners and losers is set to grow wider.

Germany engineers sharper China-EU autos debate

17 Apr 2024

Chancellor Olaf Scholz echoed Janet Yellen in using his visit to the People's Republic to warn against industrial overcapacity. But he also has reservations about Brussels’ potential EV protectionism. That suggests the bloc may yet take a more nuanced look at BYD and peers.

Microsoft’s G42 deal puts UAE in America’s AI tent

16 Apr 2024

The $3 trln software giant is paying $1.5 bln for a minority stake in Abu Dhabi-based artificial intelligence group G42. Microsoft gets years of cloud storage business. But it also implies an end to the Gulf state’s effort to be a neutral AI counterparty to China and the US.

Austerity is a bad economic answer at a worse time

16 Apr 2024

While the global economy is running hot right now, the International Monetary Fund warns that long-term growth will be below its 3.8% pre-pandemic trend. The problem is, a familiar prescribed fix of budget cuts and high rates has failed in the past and would do so again today.