Daily Brief - 20 Feb 2024

Capital One to buy Discover for $35 billion to create the largest US credit card company

Capital One is set to buy Discover for a whopping $35 billion in an all-stock agreement, marking the biggest deal of the year. This merger will create the USA's top credit card company, overtaking giants like JPMorgan and Citigroup in loan volume. The deal, expected to close by early 2025, also means Capital One can bypass Visa and Mastercard, saving costs and controlling prices better. It's a strategic move aiming to blend Capital One's reach with Discover's payment networks, boosting their position against competitors. Both companies eye significant savings and a stronger market presence from this historic merge.

Europe's car giants join forces to supercharge EV revolution

Europe's leading car manufacturers like Volkswagen, Renault, and Stellantis are teaming up in unexpected ways to tackle the rise of Tesla and Chinese competitors in the electric vehicle (EV) market. They're considering pooling resources to make EVs more affordable, facing pressures from slowing sales and tougher regulations. With the future demanding more battery-powered cars, these collaborations aim to keep Europe's car industry competitive. The idea of an 'Airbus of autos' is being floated to share the hefty costs of developing cheap EVs. This shake-up shows a bold move to adapt and thrive in the rapidly changing automotive landscape.

Bayer takes drastic step with 95% dividend slash amidst roundup struggles

Bayer AG is cutting its dividend by a whopping 95% to cope with debts and litigation costs from its Monsanto acquisition, particularly related to Roundup herbicide lawsuits. This dramatic reduction will save the company €2.3 billion annually, but experts believe it's still not enough to fully recover. CEO Bill Anderson emphasized the tough decision aims to reduce debt and improve financial flexibility. Despite operational changes and strategic reviews, Bayer faces ongoing legal challenges and a tough market, making future growth uncertain. The dividend cut, while anticipated, surprised many with its severity, potentially impacting investor confidence.