Consumer Products and Services

Mattress M&A is stuffed with sweet dreams

10 May 2023

Tempur Sealy’s $4 bln deal to buy retailer Mattress Firm could be a nightmare to get past trustbusters. Financially speaking, there’s cushion for error. Plus, after the industry struggled with both brick-and-mortar and direct-to-consumer strategies, they make logical bedfellows.

Workforce shifts stress need for migration rethink

9 May 2023

A Trump-era rule barring migrants seeking US asylum at the Mexico border ends this week. Arrivals are expected to double. With an aging US workforce and a job market in desperate need of workers, legislators have the opportune time to finally fix broken immigration policy.

Capital Calls: Amazon, Aramco

9 May 2023

Concise views on global finance: Rising costs and cautious consumers are driving the e-commerce giant to sell goods through mobile games and push incentives; the $2 trillion Saudi oil company’s new dividend policy is one way to interest investors in future share sales. 

Chickens alone can’t save Tyson Foods

8 May 2023

The world's second-largest meat producer known for its poultry production is struggling as inflation squeezes margins for red meats such as beef and pork. But even a surge in demand for chicken can’t inoculate Tyson from the volatility of the commodity market.

Buffett’s imprint on Berkshire reaches its limit

8 May 2023

The billionaire again made clear that energy lieutenant Greg Abel will someday be the company’s next CEO. By bequeathing his stock to the Bill and Melinda Gates Foundation and others, Buffett has outlined ownership succession too. Even those best-laid plans leave notable holes.

At Starbucks, hot is the new cold

3 May 2023

Shares in the $130 bln coffee company dropped 8% after it said it would keep doing what it’s doing. That’s harsh. Since the last downturn, Starbucks’ focus on mobile has given it an edge. It is more recession-proof, which is key against low-cost competitors.

Eli Lilly’s golden ticket is a regrettable winner

3 May 2023

A voucher system to encourage drug development for neglected diseases has mostly been a limp carrot. For some, though, fast lanes to U.S. FDA approval are worth a fortune, perhaps $30 bln for a new weight-loss treatment. But the pandemic showcased better ways to spur investment.

Chinese tourists return with lighter wallets

3 May 2023

More than 240 mln people are visiting mainly domestic spots like Shanghai and Hong Kong during the Labour Day festivities. It’s slightly more than pre-Covid levels, but spending is lower as many find cheaper ways to have fun. That bodes ill for an already weak retail revival.

Ford and GM can afford to put on a brave face

2 May 2023

Detroit carmakers say profit will hold up despite economic woes and costly electric makeovers, though markets look skeptical. Their reinventions carry risks, but 3.6 mln missing car sales thanks to Covid-era shortages mean their gas guzzlers enjoy plenty of unfulfilled demand.

Ending the retailers’ crisis has a high price tag

2 May 2023

Luring inflation-wary shoppers back to the high street won’t be cheap, executives at last week’s World Retail Congress said. Heavyweights like Zara owner Inditex, which has room to plough money into stores, stand to win big. H&M and others cutting to survive face a slow decline.

The game’s on, not over, for Activision Blizzard

1 May 2023

Microsoft has vowed to fight for its $69 bln takeover despite regulatory opposition. Even if the deal collapses, however, the developer behind “Call of Duty” would be armed with $15 bln of cash, including the break fee. It’s plenty of firepower to wage a stand-alone war.

India’s tycoons will weigh down Unilever’s basket

28 Apr 2023

The company’s $72 bln Indian unit is growing volume and gross margins in a sluggish market. It caps an excellent decade under outgoing CEO Sanjiv Mehta. He has set a high bar for his successor who will have to work harder as rivals from Reliance to Tata ramp up to win consumers.

Capital Calls: US GDP, Eli Lilly, EU budget

27 Apr 2023

Concise views on global finance: Consumer spending provided fragile support for the US economy in the first quarter. Meanwhile pharma group Eli Lilly is racing against rising obesity expectations, and the European Commission faces German hurdles to replacing its budget rules.

Meta is younger dog learning newer new tricks

26 Apr 2023

Mark Zuckerberg cut enough costs last quarter to bolster margins well past expectations, adding 12% to its $530 bln value in after-hours trading. That positions it nicely against competitors pivoting to AI. The issue is that Meta’s metaverse project doesn’t look as fresh.

TikTok ban is the least palatable of options

26 Apr 2023

Montana wants to block the Chinese-controlled short-form video service from operating in the state. The White House is mulling a similar strategy. But banning the app from 150 mln US phones is hard and legally fraught. Outside of a sale, a data privacy law is the best outcome.

Britain grabs mantle of chief Big Tech deal-slayer

26 Apr 2023

The UK competition watchdog vetoed Microsoft’s $69 bln purchase of “Call of Duty” owner Activision, rejecting the software giant’s promises. Takeovers by tech titans have fizzled under scrutiny from the EU and US. This decision makes it even harder to expand by acquisition.

Capital Calls: Plan C for Teck Resources

26 Apr 2023

Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.

Coinbase will force SEC to quit ghosting crypto

25 Apr 2023

It’s been eight months since Coinbase asked securities watchdogs to clarify how digital assets will be regulated. Now the world’s second-largest crypto exchange is suing for an answer. The legal battle will decide the fate of the trillion-dollar cryptocurrency industry in the US.

Icahn may fall short in quest of the holy Grail

21 Apr 2023

New rules in proxy contests haven’t helped activists in Disney or Salesforce. But with a concentrated shareholder base, they may embolden Carl Icahn as he agitates at Illumina, in the process of buying cancer detector Grail. The trouble is Icahn is pushing beyond the attainable.

Data-hungry AI models could help Reddit valuation

21 Apr 2023

The rise of artificial intelligence models like GPT-4 has turned social media posts into valuable commodities. Twitter paywalled that data last month, and Reddit plans to follow suit – which could help boost its valuation ahead of a public market debut.