EMEA

ECB will have to stay laggard in bond-buying exit

13 Dec 2022

The central bank will explain how it will cut its 5 trln euro bond pile on Thursday. Frankfurt’s stimulus reduction plans are behind the Fed and the BoE. It should not rush to catch up. Markets are calm but rising rates and a surge in issuance raise the risk of a tantrum.

Capital Calls: Lucky LBOs, Byron Trott

12 Dec 2022

Concise views on global finance: Coupa Software, a business that tracks expenses has a message for investors weighing its sale to Thoma Bravo: it is doing terribly. Byron Trott’s BDT is taking grill-maker Weber private again for $3.7 bln, a discount to last year’s IPO valuation.

Danish $22 bln enzyme M&A is costly bet on growth

12 Dec 2022

Novozymes will absorb smaller domestic rival Chr. Hansen. The 38% premium dwarfs expected synergies from the deal. And Novo Holdings, the biggest shareholder in both groups, will retain majority voting rights. Novozymes investors look to be paying too much for future growth.

Democracy remains vulnerable despite a good year

12 Dec 2022

Autocrats like Xi Jinping and Vladimir Putin have suffered setbacks. So have demagogues like Donald Trump. But the tough economic outlook presents further challenges for democratic systems. So does the fact that many people feel their lives have little meaning, says Hugo Dixon.

Guest view: Protecting Earth’s underground heroes

12 Dec 2022

Construction, erosion and agriculture undermine biodiversity and hamper the fight against climate change, with potentially disastrous economic consequences. Yet conservation efforts fail to include tiny subterranean organisms, write Toby Kiers and Mark Tercek. That’s a mistake.

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.

UK’s Big Bang barely mitigates City’s Brexit pain

9 Dec 2022

Finance minister Jeremy Hunt is fiddling with some peripheral regulations to try and boost the City’s competitiveness. It won’t reverse the flow of bankers to Europe. The exodus might even speed up if the EU finally gets moving on its own financial reforms.

New buy-now-pay-later fad runs old-school risks

8 Dec 2022

After Klarna and others saw their valuations slashed, venture investors are now pouring money into business-focused lenders like Wayflyer. It sounds like digital trade finance, which has a patchy past. There’s often a good reason that small borrowers can’t get money elsewhere.

Banks’ buyout-debt machine defies quick jumpstart

8 Dec 2022

SocGen, BNP and Deutsche are buying slices of their own European collateralised loan obligations, which turn private-equity loans into bonds. That has echoes of 2008-style excess, but it’s not too risky. Their bigger problem is that the $1 trln market may be inexorably slowing.

Capital Calls: U.S. labor market softens, slowly

8 Dec 2022

Concise views on global finance: Joblessness data suggests Americans are taking longer to find work. That’s good for inflation, but sluggish progress means the Fed will have to keep tightening monetary policy.

Rio Tinto plays chancy round of Mongolian roulette

7 Dec 2022

After years of wrangling, the fate of a $3 bln offer for the rest of the Oyu Tolgoi copper mine’s partner heads to a vote. A win would make a key piece of growth easier to manage. If the bid fails, minority shareholders face stake dilution and Rio managers may merit the boot.

Capital Calls: DWS fixes what it can

7 Dec 2022

Concise views on global finance: The 6 bln euro German asset manager unveiled some punchy new targets, but its biggest challenge will be to unshackle itself from controlling shareholder Deutsche Bank.

Big Pharma’s heartburn win is a valuation salve

7 Dec 2022

GSK, Haleon and Sanofi’s combined worth rose $14 bln after a U.S. judge dismissed claims that a drug causes cancer. It frees up cash for new research and deals. The victory also helps lay to rest the ghost of Bayer’s Roundup legal thwack, which has haunted the sector since 2020.

ECB’s bank loan-loss worries look overdone

7 Dec 2022

Chief supervisor Andrea Enria fears that BNP, ING and others are flying blind into a 2023 default storm. But rate hikes will give the 10 largest lenders a 120 bln euro profit buffer before their capital gets hit. The big banks can afford to keep going with dividends and buybacks.

New CEO gives Prada more stylish look for listing

6 Dec 2022

Former Luxottica executive Andrea Guerra will replace founder Patrizio Bertelli at the $15 bln fashion house. It’s a breath of fresh air for the family-controlled firm. Putting an experienced outsider in charge may increase Prada’s appeal as it eyes a share sale in Milan.

The complexities of EY’s big breakup bet

6 Dec 2022

The Big Four firm is pushing a plan to separate its auditing unit from its consulting business. In this Exchange podcast Andy Baldwin, global managing partner, discusses the challenges of convincing partners in over 70 countries to back the split – and what happens if it fails.

UniCredit CEO Orcel has leverage in pay debate

6 Dec 2022

The veteran dealmaker has hit his bank’s targets this year and narrowed a valuation gap to peers. Andrea Orcel may therefore deserve his maximum annual bonus. A pay hike beyond that is less obviously required, but legitimate fears he may jump ship may tip the board to offer one.

Breakup is best cure for Fresenius chronic pain

6 Dec 2022

Covid-19 disruption and staff shortages have hit the $16 bln medical group, in which activist fund Elliott owns a stake. Sold separately, its various bits could better reward investors. Flogging low-hanging fruit like hospital builder Vamed would earn CEO Michael Sen a first win.

Capital Calls: Twitter’s news problem

6 Dec 2022

Concise views on global finance: If the U.S. Congress passes a law that allows news organizations to band together and negotiate with online platforms, Elon Musk may have one more challenge to add to his growing list.

Vodafone CEO exit limits room for quick turnaround

5 Dec 2022

Nick Read is leaving the 25 billion pound telecom group after just four years. Finding a permanent successor may take time, and the board’s focus meanwhile is on completing two deals and improving the group’s weak performance. Bold moves like a breakup may take a back seat.