© Financial Times

One thing to start: Natixis chief executive François Riahi is leaving the bank “due to strategic differences”, which people with knowledge of the decision said was linked to a disagreement over a plan by co-operative bank BPCE to buy up the 30 per cent of Natixis that it did not already own. That plan was revealed by our team last month. 

© Bloomberg

Welcome to the Due Diligence briefing from the Financial Times. Not a subscriber? Sign up here. Drop us a line and join the conversation: Due.Diligence@FT.com

Who said America is ‘not an M&A country’?

Dealmaking is difficult in the best of times. But when you’re trying to negotiate with someone who has the attention span of a 15-second TikTok video, things can get even more complicated. 

Aboard Air Force One on Friday, Donald Trump vowed to ban TikTok, the hugely popular video-sharing app owned by China’s ByteDance. That was apparently news to Microsoft, which had been quietly in talks to buy the social media app’s operations in a handful of countries including the US. 

“We are not an M&A country,” said the president, who literally has a book published under his name titled The Art of the Deal

By Monday, Trump changed his tune quicker than a sellside M&A banker after getting the price up on a bidder. Think of the advisory fees! No, really. 

In a sign of just how far his administration is going off the rails, Trump said he expects the US government to receive a portion of any sale price because Washington would be helping the deal by allowing TikTok to continue to operate in the country. 

The government getting paid from a private company to get a deal through sounds a little fishy to DD. But remember when Trump swore that Mexico would pay for the wall on its border with the US? Anyway, let’s not worry about semantics. 

In front of reporters, Trump said he wouldn’t mind if a “very American” company bought TikTok. But, it has 45 days to do it. The message was: get a deal done by September 15 or TikTok is banned.

Chart showing that TikTok use has boomed during the pandemic

Yes, that’s 45 days to agree to a hugely complicated deal that faces myriad technical and political challenges. Any agreement will have to satisfy Zhang Yiming, the app’s founder, his powerful investors both in China and the west, as well as the Trump administration. 

So what happened between Friday and Monday? It depends on which news service you were reading (we’re only partly joking). There was a lot of talk about whether Microsoft would go ahead with the deal after Trump’s comments on Friday afternoon. 

After much speculation, Microsoft said on Sunday it would press ahead with talks to acquire TikTok’s operations. 

Chart showing that TikTok has been downloaded more than 2bn times

The US group also revealed that the potential transaction would include the social media platform’s business in Canada, Australia and New Zealand.

TikTok would allow Microsoft, which has a limited presence in social media, to enter a market dominated by rivals such as Facebook and Twitter. Go deeper with Lex on Microsoft’s race against the clock. 

Marathon fills its tank

Has a Japanese buyer overpaid again? 

That was definitely the question investors were asking as Seven & i outbid rivals by about $4bn to buy Marathon Petroleum’s Speedway stores for $21bn. 

The price — which, after tax, will leave the US’s largest oil refiner with $16.5bn to repay debt and return cash to shareholders — is even more remarkable because the Japanese owner of the 7-Eleven convenience store chain had walked away from exclusive talks just five months earlier. Back then, the two companies failed to agree on a $22bn price tag amid the coronavirus outbreak. 

In the intervening months, consumer spending has crashed and demand for petrol has fallen dramatically. So why did Seven & i approve the purchase for just $1bn less — especially when rival bidder EG Group valued the company, with one of its forecourts pictured below, at closer to $17bn? 

© Bloomberg

Aggressive M&A — including its $3.3bn purchase of parts of Sunoco’s convenience store and petrol station business in 2017 — has long driven Seven & i’s strategy in the US. That is how the Japanese group has risen to become the world’s largest convenience store operator. 

Analysts say Seven & i could not afford to lose the opportunity to cement its top position in the US market by adding Speedway’s 3,900 outlets which have little overlap with its existing 9,046 stores. If convenience story group Couche-Tard had outbid the Japanese company, the two rivals would have faced neck-and-neck competition with a market share of equivalent size.

But with its shares falling as much as 8 per cent after the deal was announced, it’s going to take a lot to convince investors that it’s worth the money. Read up on the deal here with the FT’s Kana Inagaki and DD’s Kaye Wiggins and Ortenca Aliaj. 

Read up on why Marathon has come out on top in the Speedway deal, with the FT’s Lex column here

The man who brokered SoftBank’s controversial bet on Wirecard

We’re used to writing about some pretty colourful characters here at DD.

But even by our standards, the 42-year-old financier who brokered SoftBank’s controversial investment in Wirecard last year has quite the back story.

Christian Angermayer, pictured below, is a keen cryptocurrency investor and a vocal believer in the benefits of psilocybin — the active ingredient in “magic mushrooms”. 

© Bloomberg

His efforts to commercialise psychedelic substances for medical purposes have drawn investment from Silicon Valley billionaire Peter Thiel and US cryptocurrencies investor Mike Novogratz, who have both partnered with the German financier on several other ventures.

He also played a key role in helping China’s HNA Group become Deutsche Bank’s largest shareholder in 2017. That complex deal saw his friend and business partner Alexander Schütz, an Austrian financier, elected to Deutsche’s supervisory board.

Angermayer has also backed several business ventures in Africa, forging a particularly close bond with Rwanda’s president Paul Kagame, previously praising his country as having “zero corruption”.

And the FT revealed that he netted a cool €13m for introducing Wirecard and SoftBank to one another last year. Nice work if you can get it. 

If you want to read more on Wirecard, here’s our latest article on how the company processed payments for a Maltese online casino that was later revealed to have laundered money for a powerful arm of Italy’s dangerous ’Ndrangheta mafia. 

AlixPartners acqui-hires former FBI director Louis Freeh

AlixPartners, the consulting and restructuring firm, has acquired Louis Freeh’s wholly owned risk management outfit in a deal that will see the former FBI director join the company.

Freeh, 70, said the buyout of Freeh Group International Solutions, for an undisclosed sum, would give his two-dozen strong team a bigger platform. 

And he pointed to his personal relationship with AlixPartners chief executive Simon Freakley, saying the deal was an opportunity to “work with friends”. 

“At this stage in my life, that’s probably the most important thing,” he told DD.

As part of the deal, Freeh, a former federal judge, pictured above, is leaving his law firm, Freeh Sporkin & Sullivan, and will no long practice law to avoid the potential for conflicts — though he will continue his work for certain clients including the sanctioned Israeli billionaire Dan Gertler and the Kuwaiti private equity firm KGL Investment.

Job moves

  • British Airways owner IAG has named Javier Ferrán as its new chairman starting early next year. Already a director at the company, Ferrán is also chairman of the distiller Diageo. He replaces outgoing chairman Antonio Vázquez

  • James Murdoch quit the board of News Corp following the latest rift with his family’s media empire, citing disagreements over certain editorial content published by its news outlets and certain strategic decisions.

  • JPMorgan Chase has poached Credit Suisse dealmaker Andy Lipsky, who advised on mega deals for General Electric and ABB, as its new vice-chairman of investment banking. Go deeper

  • Separately, JPMorgan has named veteran dealmaker David Freedman to lead its newly-created global shareholder engagement and M&A capital markets group. He takes over on activism issues from David Hunker who is leaving the firm. The bank named three regional heads including Benjamin Wilson in New York to support Freedman. 

Smart reads 

When 5G comes calling Telecom giants, buyout shops, infrastructure investors and market disrupters are racing to stake their claim across Europe in the form of mobile towers, a hotbed of consolidation as European governments brace for a next-generation 5G world. (FT)

Deadweight The recent €6bn writedown of Santander’s UK business helped push its Spanish parent company to its first loss in 163 years, further highlighting the chaos posed by Brexit and the coronavirus pandemic. (FT)

Diversity deficient A father-son investment banking duo discuss their experiences as black men on Wall Street. Despite the generational gap between them, the same diversity issues persist. (Bloomberg)

News round-up 

Siemens Healthineers to buy Varian in $16.4bn deal (FT) + (Lex)

HSBC profits plunge 96% as loan-loss provisions jump on coronavirus (FT) + (Lex)

Google signs $750m deal with ADT to sell its Nest devices (FT)

Blackstone and TPG vehicles renegotiate debt after Covid upheaval (FT)

$340m in London law firm's account suspected of 1MDB connection (Guardian)

SEC director calls for private markets to open up for retail investors (FT) 

Nvidia in talks to buy Arm from SoftBank for more than $32bn (FT)

LSE considers selling Italian assets to secure Refinitiv deal (FT) 

Metro Bank agrees deal for peer-to-peer lender RateSetter (FT)

Deutsche Bank probes Trump banker’s apartment deal (FT) 

Due Diligence is written by Arash Massoudi, Kaye Wiggins and Robert Smith in London, Javier Espinoza in Brussels, James Fontanella-Khan, Ortenca Aliaj, Sujeet Indap, Eric Platt and Mark Vandevelde in New York and Miles Kruppa in San Francisco. Please send feedback to due.diligence@ft.com

Get alerts on ByteDance when a new story is published

Copyright The Financial Times Limited 2020. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article