What You Need To Know This Week — May 18th, 2019
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
AIRLINE CONSOLIDATION HEATS UP AS ONEX MOVES TO BUY WESTJET FOR $5 BILLION
WestJet Airlines announced that it struck a deal to sell to private equity firm Onex in a $5 billion go-private transaction. The deal was struck at $31.00 per WestJet share, representing a premium of 67%. WestJet’s sale was the result of a direct approach from Onex in March 2019.
AIR CANADA BIDS FOR AIR TRANSAT AND PUTS THE COMPANY IN PLAY
Air Canada is in exclusive discussions to acquire Air Transat after making a $13.00 per share bid for the company, representing a deal value of $520 million. This potential merger would combine the country’s #1 and #3 carriers. Between the two, the airlines would command about 60% of transatlantic tickets and 46% of winter holiday tickets to Mexico and the Caribbean, which could become a potential roadblock for the deal’s required anti-trust approval.
CHINESE ECONOMY SLOWS IN APRIL
Recent Chinese data comes in negative as April numbers for factory activity, investment and retail sales trended downward. April retail sales growth came in at 7.2%, a marked reduction from 8.7% one year ago and substantially below analyst expectations of an 8.8% rise.
TRUMP MOVES TO ISOLATE HUAWEI AS HE BANS IT FROM U.S. 5G NETWORKS
The Trump administration moved to ban Chinese networking company Huawei from the U.S. market, which has the effect of pressuring other nations to do the same. In moving to cut off the Chinese corporate champion rumoured to have close ties with the Chinese government, trade war tensions are sure to rise. Huawei equipment has been banned in a number of countries due to Chinese government spying and espionage concerns given the company’s close relationship with the Chinese government.
Recommended Articles, Podcasts, Books and Tweets
Listen to market strategist Michael Mauboussin talk about “Who’s on the Other Side” on the Capital Allocators podcast.
Group messaging company Slack plans to go public via a direct listing on June 20th.
Disney takes full control of streaming app Hulu from Comcast.
A profile on credit manager GSO Capital Partners.
Saudi Arabia has flooded Silicon Valley with money leading to the overvaluation of some technology startups.
Global index investors will put more money into Chinese stocks as index providers MSCI and FTSE Russell ratchet up exposure to Chinese shares.
Shares of opioid makers are reeling after increased legal woes cause hedge funds to go short.
-The Accelerate Team
