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☆ Boomerang UBS boss ticks several important boxes
▼ + stars: | 2023-03-29 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

That’s the best explanation for why Chair Colm Kelleher on Wednesday said the Swiss bank was replacing CEO Ralph Hamers with erstwhile boss Sergio Ermotti. Though the move violates several corporate-governance red lines, it improves the group’s chances of successfully absorbing stricken rival Credit Suisse (CSGN.S). Nor was his hesitant delivery in a call with analysts after announcing the Credit Suisse deal. During his previous spell in charge, UBS held talks with Deutsche Bank (DBKGn.DE) and discussed a merger with Credit Suisse. Ermotti, a Swiss national, led the Swiss bank for nine years, departing in late 2020, and is currently chair of Swiss Re.

☆ Syngenta IPO delay rekindles past China fears
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 28 (Reuters Breakingviews) - Syngenta’s bumpy relisting path in the People’s Republic brings back unpleasant investor memories. The Shanghai Stock Exchange had scheduled this week a hearing, one of the last steps before listing. The exchange’s rules vaguely mandate that any “major issue” affecting an IPO would justify the postponement. It’s unclear how long a drag this would cause, but Shenzhen VMAX New Energy had been on a similar boat: its IPO hearing was abruptly cancelled in January, only to be rescheduled two months later. Ant’s $37 billion Shanghai IPO was pulled in 2020 shortly before its shares were due to start trading.

☆ Europe throws ignition cars a thin lifeline
▼ + stars: | 2023-03-28 | by ( Lisa Jucca | ) www.reuters.com time to read: +4 min

Bowing to pressure from automaking Germany, the European Union has agreed to exempt cars that run on carbon-neutral synthetic fuel from a ban on new combustion engine vehicles in 2035. loadingFor mass-market brands, electric cars will likely remain the cheapest option. RBC industry analysts expect electric and plug-in hybrid vehicles to make up 90% of Western European passenger vehicle sales by 2035. Yet, it will do little to stop the hollowing out of Europe’s combustion engine supply chain. The deal paves the way for EU ministers to approve the 2035 phaseout law for CO2-emitting cars on March 28.

☆ EU single market remains short of a single patent
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

While it’s good the EU is moving forward, a single patent can’t fulfill its promise without full participation. The European Patent Office holds fifth place. Billions of euros remain out of reach because the EU is strong on research but weak in finding market success. Seeking an EU patent via separate applications across Europe costs about 20,000 euros, compared to an estimated 6,000 euros under the new system. For Europe to be more than the world’s technology incubator, its single market needs more tools that are fully subscribed.

☆ Credit Suisse investor’s exit will zip some lips
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 27 (Reuters Breakingviews) - The fate of Saudi National Bank’s (1180.SE) chairman may persuade other investors to maintain radio silence for a while. Asked by a television interviewer whether Saudi National Bank would invest more money into Credit Suisse, Al Khudairy replied “absolutely not”. Although SNB lost more than $1 billion on its Credit Suisse investment, Gulf investors are unlikely to stop investing in banks globally. Indeed, the Saudi bank was part of an investor group that proposed injecting around $5 billion into Credit Suisse as an alternative to the UBS deal, the Wall Street Journal reported. But big bank investors may avoid appearing on live television for a while.

☆ Just Eat’s employment U-turn won’t travel
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 22 (Reuters Breakingviews) - Just Eat Takeaway (TKWY.AS) Chief Executive Jitse Groen is speaking out of both sides of his mouth. That marks a U-turn from Groen’s 2021 claim that the gig worker model “led to precarious working conditions”. Just Eat Takeaway will employ food-delivery drivers in the UK as independent contractors or through third party agencies. Sacrificing workers’ rights amid a cost-of-living crisis also doesn’t make Groen look good. But with the European Union passing the legislation to improve workers’ rights, Just Eat Takeaway seems to be exploiting a Brexit loophole.

☆ Swiss CoCo shakeout may yet help bank regulators
▼ + stars: | 2023-03-22 | by ( Neil Unmack | ) www.reuters.com time to read: +3 min

LONDON, March 22 (Reuters Breakingviews) - Switzerland’s forced merger of Credit Suisse (CSGN.S) with UBS (UBSG.S) has caused a real stink. European regulators on Monday mobilised to calm debt investors after Swiss authorities chose to write off 16 billion Swiss francs of Credit Suisse’s Additional Tier 1 CoCos. Both the Bank of England and European regulators pledged on Monday to respect the bank rescue hierarchy that says shareholders should lose money before debt. A case in point: only last year the already creaking Credit Suisse chose to redeem a bond. Follow @Unmack1 on TwitterCONTEXT NEWSPrices of contingent capital securities, a kind of junior ranking loss-absorbing bank debt, fell after bonds issued by Credit Suisse were wiped out following its takeover by UBS.

☆ Saudi is far from the last Western bank bagholder
▼ + stars: | 2023-03-21 | by ( George Hay | ) www.reuters.com time to read: +5 min

LONDON, March 21 (Reuters Breakingviews) - Saudi Arabia has joined the Western bank bagholder club. The bank only made its play in November, when client money was already flowing out of Credit Suisse. Saudi National Bank bought 307.6 million Credit Suisse shares for 3.82 Swiss francs ($4.11) per share. The UBS offer of 3 billion Swiss francs ($3.23 billion) values Credit Suisse shares at 0.76 francs each, more than 80% lower than the price paid by the Saudi bank. Saudi National Bank's statement added that the potential impact to its capital adequacy ratio is about 35 basis points, with no impact on profitability.

☆ Enel self-help plan has one known unknown
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +2 min

MILAN, March 17 (Reuters Breakingviews) - Enel (ENEI.MI) Chief Executive Francesco Starace’s slim-down plan is not getting enough attention. That prompted the group to start aggressively selling assets in places like Chile, Argentina and Romania to cut debt by 21 billion euros. As of Thursday, it had clinched sales equivalent to around 8 billion euros, while net debt had fallen to 60 billion euros. Since taking the helm in 2014, the 67-year-old Italian executive has set the state-controlled power company on a clear green energy trajectory, with one of the biggest green generation pipelines. If Enel replaces its green champion with someone less competent, investors may stay jittery.

☆ UK growth demands better-directed fiscal fireworks
▼ + stars: | 2023-03-13 | by ( Francesco Guerrera | ) www.reuters.com time to read: +7 min

As a former health minister, Hunt is familiar with the Hippocratic Oath’s principle of “first, do no harm.” That credo didn’t resonate with former finance minister Kwasi Kwarteng. The Institute for Fiscal Studies estimates that borrowing in the current financial year is running 31 billion pounds below the November forecast by the Office for Budget Responsibility (OBR), the UK’s independent fiscal watchdog. A further 6 billion pounds will freeze fuel duties, avoiding a 23% rise from April. In November, the OBR forecast that Downing Street would meet that goal with just 9.2 billion pounds to spare. That would still cost 11 billion pounds a year but would boost investment by 5% in the long run.

☆ HSBC turns Silicon Valley Bank calamity into gold
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 13 (Reuters Breakingviews) - A crisis can be an opportunity for the prepared. That’s what HSBC (HSBA.L) may find with its acquisition of Silicon Valley Bank’s UK arm (SVBUK), announced on Monday morning. The Bank of London, a young clearing bank that also submitted a bid, said on Monday that the HSBC deal was a missed opportunity to promote competition. On that theory, the UK government and Bank of England should have handed SVBUK to a financial-technology startup or a challenger bank, rather than strengthening an established player. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Big bank selloff rests on tiny kernel of truth
▼ + stars: | 2023-03-10 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

LONDON, March 10 (Reuters Breakingviews) - The travails of Silicon Valley Bank (SIVB.O) are rippling across the global banking system, wiping billions off the market capitalisations of HSBC (HSBA.L), Deutsche Bank (DBKGn.DE) and JPMorgan (JPM.N). It’s nonetheless a useful reminder that rising interest rates bring risks as well as benefits. The trigger for the selloff seems to have been a $1.8 billion equity issue by SVB Financial, which does business as Silicon Valley Bank. Shrinking deposits saw Chief Executive Greg Becker sell down a $21 billion portfolio of Treasury and agency mortgage bonds. As interest rates rise banks are charging more for loans.

☆ Credit Suisse blunders undermine CEO’s repair job
▼ + stars: | 2023-03-09 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

Credit Suisse said on Thursday it would not publish its 2022 annual report on the day, as previously planned, prompting its shares to fall by roughly 5%. The scarcest commodity at Credit Suisse right now is confidence, among both its clients and investors. Follow @liamwardproud on TwitterCONTEXT NEWSCredit Suisse on March 9 said it would delay the publication of its 2022 annual report. In the same annual report, Credit Suisse also changed the way it accounted for past share-based compensation, certain non-cash exchange rate movements and hedges. Shares in Credit Suisse were down 4.9% to 2.55 Swiss francs as of 0956 GMT on March 9.

☆ Bolloré Jr. readies Vivendi for asset purge
▼ + stars: | 2023-03-09 | by ( ) www.reuters.com time to read: +2 min

But the markdown gives Yannick more latitude to end his father’s ill-fated Italian foray while continuing to play hardball to raise the price tag. Here again, the move will give Bolloré junior more freedom to consider offers from potential buyers, which the European Commission will have to approve. At 70, the elder Bolloré, who remains in charge of the family holding that owns a 30% stake in Vivendi, is gradually implementing his succession plan. At 9.8 euros, Vivendi’s stock fails to capture the value of its various investments and trades below an analysts’ target of between 12 to 15 euros. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ New Carlsberg CEO’s task: stay ahead of Heineken
▼ + stars: | 2023-03-07 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 7 (Reuters Breakingviews) - Carlberg’s (CARLb.CO) new boss may struggle to maintain its newfound fizz. The $21 billion Danish brewer revealed on Tuesday that Chief Executive Cees 't Hart will retire after eight years at the helm. The company now trades at nearly 11 times its expected EBITDA for 2023 according to Refinitiv data, a premium to arch rival Heineken (HEIN.AS). In 2022, Heineken grew revenue in its Asia-Pacific market by 70%, while Carlsberg’s sales in the region rose by 22%. If the new boss can’t keep pace, Carlsberg shareholders will face a painful hangover.

☆ SAP ends pointless M&A roundtrip with Qualtrics
▼ + stars: | 2023-03-07 | by ( Karen Kwok | ) www.reuters.com time to read: +4 min

For SAP Chief Executive Christian Klein, an exit would cap a relatively pointless M&A roundtrip. In theory, SAP could have supercharged the groups’ combined revenue by offering its software to Qualtrics’ customers and vice versa. Silver Lake, a specialist in tech buyouts, is well-placed to keep that growing. One potential hiccup is that Qualtrics’ fairly paltry EBITDA limits how much debt Silver Lake can use. SAP paid $8 billion in cash for Qualtrics in 2018, and subsequently offloaded a minority stake through an initial public offering in 2021.

☆ There’s hope beyond moaning for European telcos
▼ + stars: | 2023-03-03 | by ( Pierre Briancon | ) www.reuters.com time to read: +6 min

The annual Barcelona tech fest this week was in line with tradition, but a different mood music could also be heard beyond the bleatings of European telco executives. The good news for them is that European competition authorities seem to have been mollified by the constant pleading, and could take a softer approach to consolidation in the industry. Höttges compared the 55 billion euros invested by European telcos on infrastructure last year to the 1 billion euros invested in connectivity by those he calls the “hyperscalers”. The hope is now that, considering the European telcos’ low return on investment, European competition authorities will review their strict stance on consolidation in the sector. But European telcos also have means to address some of the problems they are facing without giving the impression that everything depends on forces beyond their control.

☆ Fintech darling Stripe has first-world problems
▼ + stars: | 2023-03-02 | by ( Karen Kwok | ) www.reuters.com time to read: +7 min

When it’s a fintech darling previously valued at $95 billion, the whole industry takes notice. Though a solid business model and rapid growth have allowed Stripe to remain private, it has its share of first-world problems. A lower valuation for Stripe is painful for investors who bought in two years ago, and for employees who dreamed of IPO riches. Stripe is raising $4 billion in fresh capital from investors including Thrive Capital, Reuters reported on Feb. 24. Stripe has hired Goldman Sachs and JPMorgan to explore a public listing and to help with its latest fundraising.

☆ Abrdn turnaround is still a marathon, not sprint
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 28 (Reuters Breakingviews) - Abrdn (ABDN.L) still has one big problem. Chief Executive Stephen Bird’s turnaround at the $5 billion asset manager is gaining traction. Full-year results on Tuesday showed that interactive investor, the savings platform he acquired last year, grew revenue by 20%, despite lower trading volumes. Assets under management fell 19%, after factoring in falling markets and client outflows, to 376 billion pounds, while operating profit fell 55%. That may cost some 200 million pounds, nearly double the unit’s 2022 operating profit.

☆ Warren Buffett’s greatest hits lose their verve
▼ + stars: | 2023-02-27 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Feb 27 (Reuters Breakingviews) - After writing bangers for decades, it makes sense to keep playing them over and over. Warren Buffett mostly trotted out his greatest hits over the weekend in his latest annual letter to Berkshire Hathaway (BRKa.N) shareholders. It’s a testament to Buffett’s proven ability to ride out economic storms, even though the $670 billion company’s size makes it ever harder to outperform the market. Buffett’s missive accompanying the financial results was among his shortest, at fewer than 3,500 words, in nearly 60 years of writing them. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ IAG takeoff weighed down by debt dilemma
▼ + stars: | 2023-02-24 | by ( Aimee Donnellan | ) www.reuters.com time to read: +3 min

Its $11 billion net debt pile, a legacy of an epic collapse in revenue during the pandemic, is tangibly more than its $9.4 billion market capitalisation. While Friday’s 2022 results showed operating profit of only 1.22 billion euros, well below the 3.3 billion euros it delivered in 2019, the last few years have seen big operating losses. Operating profit could be as high as 2.3 billion euros in 2023, according to company forecasts. More holidaymakers mean revenue last year was over 23 billion euros, compared to less than 8.5 billon euros in 2021. IAG announced an operating profit of 1.22 billion euros for 2022 and forecast 2023 operating profit in the range of 1.8 billion euros to 2.3 billion euros.

☆ Revisiting JPMorgan’s innovative Cazenove deal
▼ + stars: | 2023-02-24 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +6 min

JPMorgan avoided most of these problems by structuring its deal as a joint venture with Cazenove. Though the corporate entity called JPMorgan Cazenove was quietly wound down a few years ago, the name still graces the U.S. group’s UK banking business. At the time of the JPMorgan deal, Cazenove acted as broker to almost half of the companies in the FTSE 100 Index (.FTSE). By 2009, the enlarged business reported a pre-tax profit of 280 million pounds. The Cazenove deal still stands as a case study of how to buy an investment bank without destroying it.

☆ Wood Group has grounds to face down Apollo
▼ + stars: | 2023-02-23 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 23 (Reuters Breakingviews) - John Wood Group (WG.L) has a seriously pushy bidder. While the latest 230 pence a share one represents a 50% premium to Wood Group’s closing price on Wednesday, the target has reasonable grounds to say no. Wood Group’s latest offer implies only around seven times on the same metric. Admittedly Wood Group shares are hovering around 200 pence, far below Apollo’s offer. Still, if he’s right and Wood Group trades on the same multiple at its peers, it would be worth nearly 3.8 billion pounds.

☆ Rolls-Royce strategy bind is a problem best shared
▼ + stars: | 2023-02-23 | by ( Pamela Barbaglia | ) www.reuters.com time to read: +4 min

That’s way better than the 1.5 billion pound cash outflow in 2021, but also four times what analysts had expected. Even so Rolls, which makes 45% of its revenue from making, selling and servicing commercial aircraft engines, is on the wrong side of the energy transition. But reaching net zero emissions by 2050 may involve ditching gas turbines entirely. One solution could come from hydrogen-powered fuel cell engines - Rolls clinched a partnership with easyJet (EZJ.L) in July to carry out a joint project to test a hydrogen engine. Rolls-Royce’s plans to reach net zero emissions by 2050 date back to 2021.

☆ Amazon delivers a regulatory breather to Big Tech
▼ + stars: | 2023-02-22 | by ( ) www.reuters.com time to read: +2 min

The U.S. Federal Trade Commission said it won’t challenge Amazon.com’s (AMZN.O) $3.9 billion acquisition of physician network One Medical. As the deal moves forward, deal-hungry technology giants can take a small breather. One Medical’s revenue accounted for just 0.2% of all U.S. healthcare spending in 2021, according to Amazon. And while the FTC’s concerns about Big Tech seemed limitless, its resources aren’t. Letting the One Medical deal move forward frees up staff to focus on ones that pose a clearer threat to consumers.

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