Good Friday morning. Will businesses reconsider their links to the N.R.A.? And what happens now that China controls Anbang Insurance? Just in: General Mills has bought the pet-food maker Blue Buffalo. We’ll also be looking ahead to Warren Buffett’s annual letter, which should arrive on Saturday.
A series of companies has severed their relationship with the National Rifle Association after the school shooting in Parkland, Fla., following pressure from customers. Andrew highlighted how financial companies could limit the sale of guns in his column on Tuesday, causing debate on both sides and prompting petitions to begin circulating.
On Thursday, the First National Bank of Omaha said it would not renew its agreement to issue an N.R.A.-branded Visa card. “Customer feedback has caused us to review our relationship with the N.R.A.,” the bank said.
And Enterprise, which owns two other rental car brands, Alamo and National, said it would stop offering a special discount for N.R.A. members.
Groups have previously pushed the investment industry to dump gun stocks, with limited impact.
Pension funds, including those for public-school teachers in at least a dozen states, own shares in gun makers. And major money managers such as BlackRock and Vanguard are indirectly some of the biggest holders of gun stocks through exchange-traded funds. BlackRock says it can’t divest shares of a company in an index, but with $6 trillion under management, it is often effectively the biggest investor in such businesses.
Lawmakers in New Jersey moved this week to restrict the state’s public pensions from investing in the shares of gun manufacturers. BlackRock said it planned to reach out to weapons makers “to understand their response” to the shootings.
More on gun controls
• Two gun safety groups are joining with Tom Steyer, the billionaire Democratic activist, in a drive to register high school students to vote. (Politico)
• President Trump embraced an N.R.A. position to arm some teachers. (NYT)
• Democratic governors from four northeastern states joined forces to restrict the movement of illegal guns and share information about residents barred from owning firearms. (WSJ)
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Pyeongchang, South Korea; Stephen Grocer in New York; and Chad Bray and Amie Tsang in London.
The government in Beijing seized control today of Anbang Insurance Group, the troubled Chinese company that owns the iconic New York hotel.
• The Chinese insurance regulator said Anbang had violated regulations, putting into question its ability to pay claims.
• A group that includes China’s central bank, its securities and banking regulators, the country’s foreign exchange regulator and other government agencies will oversee Anbang for a year.
• The takeover could be extended if Anbang fails to complete an equity restructuring and resume operations.
• The company’s former chairman was charged with financial crimes.
Anbang came under scrutiny for its opaque ownership structure and for the political ties of its former chairman as it embarked on a period of frenzied deal making.
But, “Anbang is too big to fail,” as an unnamed senior Anbang executive told The FT. “Even though it has no real value, they will have to restructure it very carefully.”
From Keith Bradsher and Alexandra Stevenson of the NYT:
• Quentin Webb of Breakingviews writes that the seizure is the boldest move yet in Beijing’s battle against financial excess, and the new precedent could be a worrying omen.
• Anbang’s size and entanglements are comparable to Lehman Brothers or A.I.G. before the global financial crisis, and the insurer was always going to crash and burn if left untouched, writes Nisha Gopalan in Bloomberg Gadfly. Beijing’s intervention deserves a round of applause, she adds.
More on Chinese deal makers
• Financial strains at another buyer, HNA, have prompted its subsidiary, the Irish aircraft leaser Avolon, to rewrite its bond documentation to try to reassure investors. (FT)
• Fosun has acquired Lanvin, France’s oldest surviving couture house, after a fierce bidding war. (NYT)
The deal values Blue Buffalo at about $8 billion and bolsters an area for General Mills, which owns brands including Cheerios, Lucky Charms and Yoplait, that has become increasingly popular: natural foods for pets
The transaction is the latest as food makers, such as Mars and Danone, seek to acquire more organic and natural brands.
The deals flyaround
• Standard Life Aberdeen has agreed to sell what was left of its insurance business to Phoenix Group for about $4.5 billion. (The Times of London)
• Swiss Re said it was still considering Softbank’s partnership approach. (FT)
• In the wake of the new tax law, many business owners are asking: Will changing a company’s structure cut tax bills? (WSJ)
• European banks with significant operations in the U.S. have seen multibillion dollar hits on their fourth-quarter results because of tax changes, but most say they expect to benefit from a lower rate in the future. (NYT)
• Treasury Secretary Steven Mnuchin believes policies introduced by the Trump administration will raise wages but not inflation. (Bloomberg)
• Regulators are looking to ease rules that restrict the ability of companies to speak with investors before announcing plans for initial public offerings, according to unnamed sources. (WSJ)
• Attorneys general in several states and a number of companies have filed lawsuits challenging the Federal Communications Commission’s repeal of net neutrality rules. (Axios)
• The U.S. Citizenship and Immigration Services dropped language from its mission statement that characterized the country as a “a nation of immigrants.” (NYT)
• When he was working as President Trump’s campaign manager, Paul Manafort lied to banks to secure millions of dollars in loans as part of a long-running money laundering scheme, according to an indictment unsealed on Thursday in the investigation of Robert Mueller, the special counsel. (NYT)
Shares of the social media company tumbled 6 percent on Thursday after Kylie Jenner tweeted that she no longer opened Snapchat.
The tweet comes as Snap faces growing criticism from users about the redesign of its app.
For tech companies like Snap and Twitter, Jennifer Saba of Breakingviews argues, celebrities “ought to be included as an intangible asset, to be written down when the celebrity stops being a customer — or stops being a celebrity.”
Evan Spiegel, Snap’s chief executive, received $638 million in total compensation in 2017. (CNNMoney)
The tech flyaround
• Altered images used by Russians to spread disinformation ahead of the 2016 U.S. election have exposed flaws in efforts by social media companies to stop such practices. (WSJ)
• British authorities are examining changes to the taxation of technology companies, potentially leading to higher bills for internet giants like Facebook and Google. (BBC)
• Spotify’s listing will put pressure on the music-streaming company to to reduce its reliance on music labels. (FT)
• Airbnb unveiled its Plus service, which features properties that are guaranteed to meet a 100-point quality checklist. (NYT)
• The lesson of the video-game company Rovio’s profit warning: Companies in high-risk industries with volatile earnings should think hard before going public. (Lex)
What rights do shareholders get if a company goes for an initial coin offering?
Here’s The Information’s Alfred Lee:
• The crash in cryptocurrencies hasn’t dented the popularity of initial coin offerings. (WSJ)
• Bitcoin is at $10,234.30. (coinmarketcap.com)
That’s the NYT’s James Stewart, who tries to unpick the puzzle.
Separately, a group of Harvard graduates has a plan to bolster the university’s straggling endowment.
The Treasury Department has proposed a regulatory move that would increase the likelihood that a failing bank would end up in bankruptcy rather than going through a resolution process overseen by the government.
The tweak would still keep the emergency structures introduced as part of Dodd-Frank as an option.
From the NYT’s Peter Eavis:
The banking flyaround
• Royal Bank of Scotland reported its first annual profit in a decade, after a grueling turnaround effort. That could make it easier for the British government to sell down its stake. (LSE)
• Behind John Flint’s bookish image lurks a ruthless streak that has helped him to rise to the role of chief executive at HSBC. (FT)
• Dina Powell is talking to Goldman Sachs about returning to the firm in a global role, according to unnamed sources. (WSJ)
• Kumar Galhotra, who has been running marketing and the Lincoln brand for Ford, will take over as head of North American operations after the abrupt departure of Raj Nair. (WSJ)
• Hidden in rising bond yields, there could be good news for shareholders. (WSJ)
• A federal judge criticized deferred prosecution agreements, which allow companies to avoid prosecution by paying a fine. (Bloomberg)
• The Japanese airbag maker Takata reached a $60 million deal to settle consumer protection claims in the U.S. (NYT)
• Hewlett Packard Enterprise’s sales of storage and networking devices did well enough over the holiday quarter that it raised its annual profit targets. (WSJ)
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