A couple scoops to start: US investment group Sixth Street is putting $500m into Convex, a commercial insurance start-up launched by industry veteran Stephen Catlin, the FT’s Oliver Ralph and DD’s Arash Massoudi report.

Next up, the FT’s Stephen Morris reports Standard Chartered’s head of investment banking, Simon Cooper, has emerged as the leading internal contender to replace Bill Winters as chief executive. 

And one big trend to watch: the dominance of passive funds. Vanguard’s assets under management surged beyond $7tn for the first time, after securing more than a quarter of the exchange traded fund industry’s entire cash flows in 2020. Vanguard boss Tim Buckley speaks to the FT about that here. And check out the FT’s new, free-to-read ETF Hub if you are keen to go deeper on the industry.

Tim Buckley, Vanguard chief executive © FT Montage: Kristoffer Tripplaar/Alamy

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When it comes to foreign buyers, French M&A gets political 

The future of France’s Carrefour supermarket chain rests in the hands of a small group of billionaires and the French government.

Bruno Le Maire, the French finance minister, for one, is not impressed with a proposed €16.2bn takeover offer for the group that pioneered the hypermarché. The offer comes from Couche-Tard, a Canadian group that runs convenience stores mostly at petrol stations. 

“What is at stake is nothing less than the food sovereignty of France,” said Le Maire in a television interview on Wednesday night. “So the idea that Carrefour can be bought by a foreign competitor, at first glance I am not in favour of such a deal.” 

In effect, Le Maire is signalling that any bid from Couche-Tard would have to go through his ministry for approval since food-distribution is on a list of “sensitive” sectors in which the government can intervene, the FT’s Leila Abboud reports.

Bruno Le Maire, French economy and finance minister © Reuters

Cue flashbacks to 2005 when France made it clear that the yoghurt company Danone was off-limits to foreign buyers. 

But that doesn’t mean the deal is impossible.

Le Maire’s comments, while punchy, could be read as a manoeuvre to ensure that — with President Emmanuel Macron facing re-election next year — any takeover that’s agreed is seen to protect the interests of the French consumer. 

The French state has intervened massively in the economy to support businesses and stave off mass unemployment during the pandemic so can’t be seen to do nothing when the future of the biggest private-sector employer is at stake. It could yet wave through the deal if it received assurances on jobs, headquarters and governance.

Couche-Tard would also have to win over Carrefour’s three biggest shareholders, who together control about 23 per cent of the stock and have double voting rights. 

On the list: Bernard Arnault, France’s richest man and the billionaire founder of LVMH, the Brazilian billionaire Abilio Diniz and France’s wealthy Moulin family, who own the department store group Galeries Lafayette.

As the saying goes, in Paris all roads lead to Bernard Arnault © AFP/Getty Images

Couche-Tard, which owns the Circle-K convenience store chain and has a market value of $37bn, has been clamouring for a mega-deal for a while, having spent years growing through acquisitions.

Last year it missed out in a battle for Speedway, the US petrol station group owned by Marathon Petroleum that was eventually acquired by Japanese rival Seven & i Holdings for $21bn. 

The Carrefour deal seems to be a bid to shift from being based heavily on gas stations to a more general grocery retailer — not unlike the logic of the owners of UK petrol stations business EG Group, which last year agreed a £6.8bn deal for Asda with none of the government intervention that Couche-Tard may face in France. 

The FT’s Lex column is sceptical, pointing out earlier on Wednesday that there is hardly any overlap between the two companies in geography or format and “a deal is not advisable simply because it is possible”. With his intervention, Le Maire has signalled that France demands to be consulted on what is possible. 

The US joins Europe’s telecoms dealmaking streak

Earlier this week DD ran the ruler over Cellnex’s breakneck mergers and acquisitions strategy. Bankers we spoke to were adamant that the Spanish mobile towers group’s endgame would probably be an acquisition by a larger rival such as American Tower

But it turns out the Americans were already on the move. American Tower, which only has a small presence in Europe, has bagged a €7.7bn takeover of Telxius Telefónica’s tower arm — transforming it into a major player in Spain and Germany and strengthening its hand in Latin America.

A mobile phone mast in Berlin used by Telefónica

For Telefónica, the deal brings in much-needed cash to reduce its debt. It tried and failed to float Telxius in 2017 before selling minority stakes to private equity shop KKR and the founder of Inditex’s investment company — with both now set to enjoy a bumper payday. 

Cellnex now faces competition from American Tower to scoop up other assets across Europe. It had designs on Telxius itself — a deal that would’ve opened up Germany and locked down its home market — and, as the FT’s Nic Fildes reports, held talks with Telefónica over a deal in recent weeks.

But it was outgunned by American Tower and also had no interest in the Latin American assets meaning, for once, it had a weaker hand in negotiations. 

Cellnex shouldn’t be too disheartened, though. The American company paid 30.5 times trailing income for Telxius which, if applied to other tower companies including Vodafone’s Vantage, Inwit and itself, sets a very healthy valuation benchmark for asset owners. 

Telefónica, for example, still has a 50 per cent stake in the UK tower company Cornerstone which is up for sale, according to bankers, given that its owner has jettisoned all of its sister assets. 

It’s clear that American Tower now intends to be a contestable force in that consolidation process. How the pieces of the tower jigsaw are put together remains to be seen. 

LSE/Refinitiv: the big data exchange deal gains EU approval at last

For much of the past decade, the acid test of a multibillion-dollar exchange deal was to present it for approval by antitrust regulators in Brussels. Deutsche Börse had two failed megamergers, NYSE Euronext in 2012 and London Stock Exchange Group in 2017.

That meant the LSE scored a notable victory on Wednesday when it secured consent from the watchdog for its $27bn purchase of data and trading group Refinitiv.

It’s been a tortuous passage since it was first broken by the FT in July 2019 and announced days later. 

The LSE had been hoping to wrap the entire deal well before the end of last year, but a more protracted Brussels investigation than expected, coupled with the coronavirus, has stretched out the process. It will have to sell Borsa Italiana, probably to Euronext for €4.3bn, but the LSE expects that to be done by the end of the quarter.

And then, finally, the fees will be unleashed. Bankers, lawyers and other advisers are set to divvy up an enormous $1.1bn fee pool for work on the deal.

Job moves

  • Intel has ousted chief executive Bob Swan following sweeping changes at the semiconductor maker by activist hedge fund Third Point. He will be replaced by VMware chief executive Pat Gelsinger next month. More here.

  • BlackRock co-founder Barbara Novick is retiring from the world’s largest asset manager. She will move from her role as vice-chairman to become a senior adviser on February 1. More here from the WSJ.

  • Snowflake chief executive Frank Slootman has been named a senior adviser at Blackstone.

  • Shahmir Khaliq was named Citigroup’s head of treasury and trade solutions. He replaces Naveed Sultan, who is entering a new role as chairman of Citi’s institutional clients group.

  • Sir Julian King, the UK’s EU Commissioner in Brussels from 2016 to 2019 and former UK Ambassador to Paris and Dublin has joined consulting group Flint Global as a senior adviser.

Smart reads

Barclay brother David Barclay, the fiercely private British billionaire and Daily Telegraph owner, has died aged 86. Alongside his twin brother, he built an empire across property, hotels and media following an upbringing of hardship and upheaval. (FT)

Caught up in the honeymoon phase Tesla’s lucrative relationship with China helped propel Elon Musk to become the world’s richest man, and the electric carmaker’s Shanghai factory to thrive as competitors battle bureaucratic hold-ups. Will the love last? (Bloomberg)

Hedge funds lead the Spac race Early blank-cheque believers like Magnetar Capital, Glazer Capital and Israel Englander’s Millennium Management are cashing in big on Wall Street’s hottest trend. (Wall Street Journal)

News round-up

Affirm shares double on debut in new sign of hot IPO market (FT) 

UniCredit sounds out Andrea Orcel and Tidjane Thiam as hunt for new chief narrows (FT)

WhatsApp fights back as users flee to Signal and Telegram (FT)

Tesla/China EVs: pricing power (Lex)

NCR/Cardtronics/ATMs: dispenser defender (Lex) 

Talkspace strikes $1.4 billion merger with Hudson executive (Bloomberg) 

Americans won’t be banned from investing in Alibaba, Tencent and Baidu (WSJ) 

Former Carillion executives face boardroom ban (FT)

Renaissance’s Medallion Fund surged 76% in 2020. But funds open to outsiders tanked (Institutional Investor)

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, Mark Vandevelde and Francesca Friday in New York and Miles Kruppa in San Francisco. Please send feedback to due.diligence@ft.com

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