Greetings from the home office, where I promised myself that I wouldn't write a newsletter today. So, yeah, this is what procrastination looks like. We'll be back Monday with our regular format at our regular time. Have a great weekend!
We're all about to find out if trade wars are easy to win.
China today hit the U.S. with $34 billion in retaliatory tariffs, which are expected to take particular aim at states that voted for President Trump in the 2016 election.
Why it matters: For U.S. businesses, this trade war creates both short-term and long-term complications.
China may not be finished, as detailed in The Washington Post. It could go beyond tariffs and increase the cost of custom inspections, while China's citizens could end boycott U.S. products — as happened last year to South Korea's Lotte Group.
Bottom line: Trump had promised that such actions would be met with additional U.S. tariffs, which means the two countries may be staring down the black hole of a tit-for-tat trade war. It's also possible that Trump could revisit the idea of tougher investment restrictions, beyond the CFIUS-strengthening bill that is expected to come out of Congress.
Global and U.S. M&A activity both hit all-time highs during the first half of 2018, driven by mega-deals, according to data from Thomson Reuters.
The value of global M&A rose 64% over the first half of 2017, but the actual number of deals fell by nearly 10%.
Private equity-backed deals came in at $215 billion. That represents a 46% boost over the first half of 2017, although private equity's piece of overall M&A fell from 9.5% to 8.6%.
Energy and power was the first half's busiest sector in terms of deal value, followed by media/entertainment and health care.
Morgan Stanley took the top spot in terms of M&A advisory work, flip-flopping with Goldman Sachs.
What to watch: Many dealmakers fear that an all-out trade war could severely slow new M&A activity in the second half.
Photo by Michele Tantussi/Getty Images
Kia reports that Uber and Lyft each held talks to acquire Skedaddle, a startup that creates group bus rides by matching customers headed in the same direction (e.g., charter buses to sporting events).
Also in ride-hail: Uber reportedly is in merger talks with Careem, a Middle East-focused ride-hail company most recently valued at $1.5 billion. This would be in keeping with what Uber has done in other foreign markets where it has significant homegrown competition — including Southeast Asia, where Singaporean regulators are threatening to unwind Uber's deal with Grab.
“Everyone is almost certain it is not going to happen.”— Anonymous Saudi Aramco exec to the WSJ, in reference to the company's IPO.