Daily Brief - 11 June 2024

Political upset in Mexico sends peso to year-long low

The Mexican peso dropped to $18.65 per dollar, its lowest in over a year, due to political uncertainty after the Morena party’s unexpected electoral victory. The party's win in the lower house of Congress has raised market concerns about potential shifts in power, though they lack the Senate majority for constitutional changes. This caused the peso and the MSCI index tracking Latin American currencies to fall, with Brazil's real also dropping despite rising short-term interest rates. Investors are bracing for more volatility as Latin American currencies face pressure amid strong US job data and upcoming interest rate decisions.

EU probe threatens Emirates Telecom’s €2.2 billion deal with PPF

Emirates Telecommunications Group’s €2.2 billion takeover of PPF Telecom's assets in Bulgaria, Hungary, Serbia, and Slovakia is under EU investigation. The EU suspects Emirates Telecom received unfair state subsidies, possibly giving it an advantage over competitors. This could lead to the deal being blocked or concessions required. The probe is the first to test the EU's new rules on foreign subsidies in company takeovers. Emirates Telecom is cooperating with the EU as regulators aim to ensure fair competition in the bloc.

Noble acquires Diamond Offshore in $1.6 billion deal, expanding rig fleet

Noble Corp., the world’s top offshore oil-rig contractor, is buying Diamond Offshore Drilling for $1.6 billion. Diamond’s shareholders will receive shares and cash, giving them about 14.5% of Noble. This acquisition boosts Noble's fleet with the latest deepwater rigs just as offshore drilling is set to grow while US shale slows down. Noble will use a $600 million loan to finance part of the deal and will increase its dividend by 25%.