Hi Newsletterest, here's what you need to know for June 26th in 3:07 minutes.

🏳️‍🌈 Finimized while celebrating Pride in London, UK (27°C/80°F ☔)

Today's big stories

Mergers and acquisitions appear to be picking up again, with several tabled deals gaining traction
Our analysts scrutinize two soaring Chinese stocks attracting big overseas investment – Read Now
Bayer and Lufthansa concluded sorry sagas with good news for investors, while Wirecard’s story had a tragic ending

1/3

A Thirst To Prove Yourself

What’s Going On Here?

Companies have been sorting through their business units lately – and several are now taking the decision to cleave off those which no longer pass muster.

What Does This Mean?

Consumer staples giant Unilever – the (presumably frozen) brains behind Ben & Jerry’s ice cream – has been brewing up a sale of its global tea business since January. As with a similar spreads sale in 2017, several private equity investors are reportedly poised to make offers valuing the tea set at over $6 billion. Like rival Nestlé, Unilever will be hoping its overall business can expand faster once free of slower-growing segments.

Some forthcoming sales could be forced, however. The London Stock Exchange (LSE), for instance, may have to sell Borsa Italiana – the Italian rival it bought in 2007. That’s because regulators fear its $27 billion deal to take over market data provider Refinitiv would otherwise give LSE too much influence in the industry. A sale is one way to limit LSE’s power and help maintain healthy levels of competition. After all, Gryffindor haven’t won the Quidditch Cup since Charlie left…

Why Should I Care?

For markets: For buyers.
Companies compulsorily selling business segments can represent good value for buyers, since they may get away spending less than they otherwise would. In the current envirusment, that effect could perhaps be exaggerated by the sheer number of businesses under financial strain. Not all forced sales are bad for the seller, though: in LSE’s case, a Borsa Italiana sale may allow it to complete an acquisition that’ll bring much more value to the company.

The bigger picture: Not Slytherin, eh?
German automaker Volkswagen is reportedly considering a bid for $400 million car rental firm Europcar: that may be brave considering the bankruptcy that befell its transatlantic rival Hertz. Elsewhere, a SoftBank-backed software firm is said to be in the sights of patient industrial powerhouses Schneider and Emerson. And while not a traditional merger, a wise consortium of investors this week committed $10 billion to a gas pipeline business controlled by the Abu Dhabi National Oil Company – 2020’s biggest energy deal so far.

Take action: Discover how you can profit from M&A deals.

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2/3 Premium

Eastern Promise

Chinese companies and Western investors are more connected than ever – and as one local drinks firm grows bigger than Coca-Cola and an emerging ecommerce giant sees its share price double in three months, easily accessible Chinese stocks are attracting attention…

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Happily Never After

What’s Going On Here?

Once upon a time (a.k.a Thursday) two princes among German companies had relatively happy endings to recent trying tales – but one ugly duckling was consigned to oblivion.

What Does This Mean?

Pharmaceutical and life sciences giant Bayer bought US agricultural biotechnology firm Monsanto for $63 billion back in 2018 – but it also took on legal liabilities relating to Monsanto’s weed killer Roundup, which allegedly caused cancer. After paying $80 million to settle some initial lawsuits, 125,000 more quickly piled up. This week, Bayer finally agreed to pay $12 billion to settle three quarters of those claims.

On Thursday, meanwhile, airline Lufthansa’s biggest shareholder gave his blessing to the German government’s $10 billion rescue package, having previously threatened to vote against a deal which sees Germany take a 20% stake in the company.

Why Should I Care?

For markets: Verily, to be sure is to be happy.
It’s fair to say investors dislike uncertainty: for one thing, it reduces their confidence in their forecasts and leaves companies at the mercy of forces outside of their control. That might explain why Bayer’s stock initially rose on Thursday: while the company’s shelling out a lot, at least putting a figure on the furor is something. Similarly, Lufthansa’s 7% rise likely reflects investors’ increased certainty that the airline will go to the ball.

The bigger picture: What big teeth you have!
There was no fairytale ending for payments processor Wirecard – which admitted it was missing $2 billion on Monday and filed for insolvency on Thursday. After all, companies that lose so much cash they can’t meet their financial obligations quickly fall prey to wolfish creditors. Traders who briefly thought Wirecard might bounce back were roasted alive: the company’s stock fell a further 70% (tweet this).

Know thyself: Find out which investment style suits you.

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💬 Quote of the day

“Love is a human experience, not a political statement.”

– Anne Hathaway (an American actress)

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🤔 Q&A · RE: Double, Double, Toil And Trouble

“How do S&P 500 options and futures work?”

– Edward in London, UK

“Let’s say the S&P 500 index of US stocks was at 3,000, Edward, and you bought a ‘call’ option on it with a ‘strike price’ of 3,500. If the S&P 500 was at 3,400 when that option eventually expired, you’d let it lapse: you could buy the S&P 500 directly at a lower price if you wanted to. If the S&P 500 was at 3,600, however, you’d use your option to buy the S&P 500 at 3,500 and make a profit. The main difference with a futures contract is that you don’t have a choice: upon its expiry, you’d have to buy the S&P 500 at 3,500 regardless of its actual level.”

🙋 Ask a question

🕺 Events coming up

It’s never too late to do the right thing: join one of our upcoming digital or in-person events.

🌍 Global: Finimize Live AMA – 1.30pm UK Time, June 30th
🇬🇧 UK: Estonia’s Startup Ecosystem – 5pm UK Time, July 1st
🇦🇺 Australia: Women & Money – 5.30pm Perth Time, July 22nd (this is an in-person event)

📚 What we're reading

Shark myths busted (Inverse)
Green sand to capture carbon dioxide (MIT Technology Review)
Gandhi’s letter to Hitler (The Baffler)

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Finimize - 😵 RIP Wirecard

Today's big stories

A Thirst To Prove Yourself

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Eastern Promise

Happily Never After

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🕺 Events coming up

Older messages

🌱 Green shoots of a global recovery

🕚 JPMorgan: stocks’ party will stop

🆘 Missing: 2 billion dollars

🤕 Hertz to be a retail investor

📈 Stocks are a rip-off, say investors

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