Japan's youngest CEO is doing sterling work
BBL financing, junk food and supermarkets selling banks.
Hello,
M&A has been on my mind, in part because I've been reading about KKR's takeover of RJR Nabisco in the 80s. It's left me wondering how many acquisitions are driven by the fact that many executives used to work in investment banking and so must constantly have friends egging them on to buy stuff.
Doing deals feels good (I just bought an excellent kettle) and they are the lifeblood of the startup economy. It's a real problem for the VC model that the competition authorities keep squashing acquisitions. If you can't get your money out after a few years, it's not great news for investors in the fund. That having been said the Harvard Business Review claims 70-90% of M&A deals fail as the two companies can’t properly be integrated, often because the people doing the deals and the people trying to make them work are not the same people. It’s all about the day after the night before.
It’s a deal,
Hugo
Chief Acquirer
The Business of Stuff
The Stuff
GB Energy given minimal pocket money 🪫 - the new state-owned energy company is to receive just £100m for renewable projects in the first two years of this parliament. Whilst it has left some disappointed the idea is that they will use the money to get the whole enterprise set up before seriously investing in carbon capture projects and the like.
Japan’s youngest CEO turns around Hello Kitty 🐱 - it is the second-highest-grossing media franchise in the world after Pokémon but its’ (her?) parent company Sanrio has suffered some financial peaks and troughs for several years. Tomokumi Tsuji has turned things around after inheriting the company from his father at just 31 in 2020. Tsuji has worked hard to diversify away from Hello Kitty with characters like Cinnamoroll and Aggretsuko. Nonetheless, we wish Hello Kitty a happy fiftieth birthday.
Wall Street is in a bad mood about earnings 🥴 - October’s gains were wiped off the S&P 500 as several tech companies reported quarterly results that didn’t quite meet the expectations that have been set by all the investment in AI. Amazon and Apple are both doing reasonably well however as they go into the festive season racing to become the first $4 trillion company.
Uber isn’t growing as fast as hoped 🚂 - the company has been struggling to find growth as you’ll have probably noticed from their attempts to sell train tickets in London, endless in-app advertising and the potential acquisition of Expedia. In an analyst call, however, the main factor they called out for a slowdown in bookings was the higher cost in the US for the service. All that having been said their share price is up over 50% in the past year.
Tesco is returning £700m to investors 💰 - this is after the sale of its banking operation to Barclays which has left them with a pile of cash they have decided not to invest. This is part of a wider trend of grocers moving out of banking so they can focus on selling vegetables. Tesco sells 27% of the vegetables in the UK.
BBL Default Swaps are gaining traction 🏦 - cosmetic surgery is expensive which is resulting in people taking out loans to get them done and in true end-of-days fashion this debt is being rolled up a la financial crisis. Bankers are turning the debt into bonds worth hundreds of millions of dollars. Major cosmetic procedures were up 7% in 2023 as social media is awash with influencers showing off the results.
Six companies account for half of content spend 📺 - Disney, Comcast, Google, Warner Bros, Netflix and Paramount will spend a collective $126bn which amounts to 51% of all investment. Disney is the biggest spender, at 14%, boosted by its acquisition of Hulu. Google’s investment is via YouTube and its revenue-sharing scheme with content creators.
Boohoo appoints current employee as CEO 🙅 - they’ve decided they can’t be bothered with Mike Ashley and so have appointed Dan Finley who has been running Debenhams. Frasers Group is still a big shareholder in Boohoo so it is far from clear that the boardroom battle is over and that they will accept this new appointment.
Mars is happy to keep peddling junk food 🍫 - the sweetie company is in talks to buy Kellanova which would give them brands like Pop-Tarts and Cheez-It, allowing them to diversify away from chocolate (and pet food). They are sailing into the cultural winds as everyone is trying to cut back on their lumps of sugar and e-numbers as much as possible. It’s hoped that weight-loss drugs like Ozempic will reduce cravings for these sorts of ‘foods’ and change consumer habits.
Amazon Etsy-type website in India isn’t working 🇮🇳 - Amazon Karigar was launched in 2017 to give artisans a platform to sell their wares but items aren’t being distinguished from mass-produced tat and are generally struggling to sell. For an incredibly successful company, Amazon’s inability to make life easy for its customers (see Firestick, their website, AWS panel) can be staggering.
Quote of the week
"I'm looking for deals, only good deals. Ride the trends, just don't try too hard for the turns" - Gordon Gekko