Easter Dealmaking with Ruth David – A Readout


It seems like this is a busy week for the United Kingdom when it comes to daelmaking as the London-listed Glencore bid for a $23 billion stake in Canadain miner Teck Resources faced a non-acceptance. It looks like the central bank of England’s most dovish policymaker Silvana Tenreyro is advocating for a rate reduction as inflation remains above 10%, which is five times the BOE target.

Investors are warned to prepare for rising prices in the coming years and that could force central banks to raise their inflation targets from 2% to 3%. It’s not just a UK problem, as globally there have been more 500,000 job cuts announced since October. Additionally, investors should also expect the cost-of-living crisis to worsen across the world.

However, there is an uptick in corporate activity, as past 48 hours have been made the third-busiest week of 2021 in UK. Rhodnbones Group has agreed to buy Investec’s UK wealth management business, creating an operation worth about £100 billion in funds. This exemplifies the fact that businesses are combining forces to cope-up rising costs for regulation, technology, and operations.

On a similar note, CEO’s across several sectors are more keen on pursuing deals for growth in the light of recent issues. To follow-up, the sale of the storied football club Manchester United also faced some complexity, as UK government officials have shown their concerns about the bidder. Furthermore, there is a dearth of initiations for IPO as it hits a 14-year low, outpacing declines in New York and Paris.

Recently, Sultan Al Jaber was selected to lead COP28; the world’s most important climate summit, He runs the United Arab Emirates’ oil and gas behemoth Adnoc. As for Ireland, its banking industry is expected to expand this year despite turmoil in the global financial system. Virgin Money is aiming to go beyond retail banking and has started an investment platform with asset manager Abrdn.

On the flipside, Virgin Orbit has filed for bankruptcy after a failed UK space launch which caused the stock price to collapse. The much-loved Harry Potter world is all-set to have a new online TV series based on the magical franchise. Furthermore, Paris’s air taxi stations are expected to be ready soon and auto insurance in the coming months might be expensive due to increasing accident and theft claims.

Overall, there has been a surge in dealmaking activities in the UK, with many business operations across the sectors chasing growth in the light of increasing inflation and rising costs. However, completion of cross-border deals can prove to be a difficult task due to many regulations. Moreover, the cost of living crisis is deepening with job losses worldwide.