Japanese co Nippon Steel is buying US Steel for over $14bn in cash, roughly a 40% premium to Friday’s closing price.
Adobe can’t see a way around EZ and UK regulatory challenges to get its planned $20bn acquisition of cloud-based tool co Figma, so it’s letting the deal go.
BP is jamming the price of oil up (as well as shipping stocks) after announcing it will pause all tanker traffic through the Red Sea, given the recent attacks by Houthi militants.
GS’ Rosner recommends buying shorter-maturity debt (such as 2-yr and 5-yr debt yielding 4%+) as a preferred way to play the Fed’s eventual pivot. The idea is to generate decent yield while hoping for security appreciation.
Underwater car loans are becoming a problem in the US. Ave negative equity increased to over $6k in Nov, the highest level since Aug 2020, per Edmunds.com. The ave interest rate for a car is 7.4% for new and 11.6% for used.
Southwest agreed to a record $140mm civil fine due to its massive flight cancellations last holiday season that stranded 2mm folks. They’ve been out this past week promising there won’t be a repeat.
Various officials are cautioning that market participants are getting ahead of themselves by front-running rate cuts, in the US and the EZ. If markets can extend its 7-week bull run for another week (this has happened only 20 other times since 1964), then they’re probably wearing ear muffs and enjoying the egg nog—not listening to the officials.
Folks are now adding to their dollar-down bets as well.
Well, some companies are having indigestion from all the egg nog they’ve been drinking. Today’s piece by BBG covers the debt-fueled M&A boom, and concluded from its study of 75 of the largest acquisitions over the past 5 years that (i) <50% have been able to reduce their leverage ratios, (ii) almost 1/3 have high lev ratios >3.5x, and (iii) their ave net debt to EBITDA rose. These are the candidates facing a refinancing wall at higher rate levels, especially with recent credit downgrades.
