Good Tuesday morning. Should mutual funds become activists on guns? How Cfius is getting tougher. And could the Trump tariffs be weakened? On the calendar: Expect questions about Aramco’s I.P.O. when the oil giant’s chief speaks at an industry conference today.
Some institutional investors have talked about divesting their shares in gun makers like American Outdoor Brands and Vista Outdoor. (And some, like the Carlyle Group’s David Rubenstein, say they will never invest in the industry.)
But, Andrew asks, what if those giants became shareholder activists to change those businesses? From his latest column:
The rub: Any decision has to be anchored by financial logic, since BlackRock and others have fiduciary duties to their own investors. But then gun makers are facing costs from boycotts by both consumers and businesses like REI.
Elsewhere in guns: A bipartisan bill would require federal officials to notify state law enforcement within 24 hours if someone fails a national background check. And the dating app Bumble has banned gun-related images from user profiles.
Today’s DealBook Briefing was written by Andrew Ross Sorkin on the road, and Michael J. de la Merced and Amie Tsang in London.
Every expert that Michael and our colleagues spoke to yesterday acknowledged that the national security panel’s review of Broadcom’s bid for Qualcomm was extraordinary. (One other time Cfius was involved in a contested situation, recalled by Reuters: BHP Billiton’s bid for Rio Tinto in 2008.)
Its move shows Washington’s worries about the selling of U.S. companies to foreign counterparts — and its willingness to act. From Alan Rappeport, Cecilia Kang and Chad Bray of the NYT:
The deal context: Qualcomm filed for a review of the proxy fight on Jan. 29, before voting on the board contest began. But as of yesterday, Broadcom looked on course to win at least four seats, with a decent chance of six. Big index funds like BlackRock and Vanguard hadn’t voted yet.
Bonus explainer: Everything you’d want to know about Cfius.
In other foreign deals: The Chicago Stock Exchange’s proposed sale to Chinese investors is dead.
Though President Trump insisted that the tariffs on all imported aluminum and steel are coming, there are signs that he may soften their impact.
• He left open the possibility that Canada and Mexico could be exempt if they signed a new Nafta pact.
• Gary Cohn is organizing a meeting with executives from U.S. companies that would be hurt by tariffs, according to Bloomberg.
Who has criticized the tariffs: House Speaker Paul Ryan, Goldman Sachs economists and the consulting firm The Trade Partnership.
Europe’s plan: It includes retaliatory tariffs on Harley-Davidson motorcycles and Kentucky bourbon and challenges at the World Trade Organization. (Those moves may also violate W.T.O. rules.) As Jean-Claude Juncker of the European Commission said on Friday, “It’s actually a stupid process that we must to do this, but we have to.”
Elsewhere on tariffs: Why economists don’t hate the trade deficit.
• Corporations could end up paying more in state taxes because of the federal tax overhaul. (WSJ)
• Washington State is getting its own net neutrality rules. (NYT)
• The Trump administration urged the Supreme Court to expand states’ authority to collect sales tax on internet purchases. (WSJ)
• The bank that processed a $130,000 payment from President Trump’s personal lawyer to an adult-film actress flagged the transaction to the Treasury Department as suspicious, an unnamed source says. (WSJ)
• A Belarusian escort with close ties to the Russian oligarch Oleg Deripaska says she has evidence relevant to the Russia investigation. (NYT)
• The Trump name has been pried off its only hotel in Latin America, but the Trump Organization denies losing control of the property. (NYT)
• Sam Nunberg, a onetime Trump campaign aide, told many news outlets yesterday that he didn’t want to appear before a grand jury, among other things. (NYT)
The Volcker Rule campaign: The Fed is working on “material changes” to the rule, which was meant to reduce banks’ ability to make risky and speculative trades, according to our colleague Matthew Goldstein. Among the proponents is Randal Quarles, the Fed’s vice chair for supervision. Peter Eavis notes one group grateful for the Volcker Rule: investors in banks.
The foreign bank campaign: Peter Eavis dived into how Deutsche Bank and others are trying to take advantage of a bill that would relax regulations for regional banks. In short: banks with less than $250 billion in assets would enjoy more relaxed rules, and foreign banks — which oversee less than $250 billion in assets in the U.S. — want in.
Elsewhere in regulations: Don’t expect more disclosure under the S.E.C.’s new cybersecurity rules, according to White Collar Watch.
Michael broke the news yesterday that a nine-year-old reviews site, The Infatuation, had bought Zagat — the “iconic” and quote-mark-happy restaurant guide built around contributions from readers — from Google.
What is The Infatuation? It was founded by two former music executives and grew by embracing technology: It created the “#EEEEEATS” branded hashtag on Instagram and a texting-based restaurant recommendation service.
The big question: Can even a company that rose to fame with Instagram hashtags keep Zagat relevant amid a slew of younger digital competitors?
• Nordstrom rejected its founding family’s latest takeover bid, valued at $8.4 billion. (NYT)
• Continental Grain plans to raise its stake in Bunge and push the agriculture-commodity trader to sell itself, unnamed sources say. (Bloomberg)
• Elliott Management is building a stake in Telecom Italia to counter the company’s biggest investor, Vivendi, unnamed sources say. (Bloomberg)
• The F.T.C. sued to block J.M. Smucker’s acquisition of Wesson from ConAgra. (WSJ)
• The European cardboard box maker Smurfit Kappa has rejected a takeover offer by International Paper. (FT)
• U.K. lawmakers called on the British government to block Melrose’s hostile takeover bid for GKN. (FT)
• The private equity owners of the baseball cards maker Topps are weighing a sale, unnamed sources say. (Bloomberg)
• How the $15.3 billion sale of XL Group to Axa of France got done. (Bloomberg)
Grocery stores, online video and health care aren’t enough. The online giant is talking to big banks like JPMorgan Chase and Capital One Financial about creating checking accounts for customers, unnamed sources told the WSJ.
What’s in it for Amazon: access to younger customers and those without bank accounts; lower fees to financial firms; and, of course, more customer data. (Amazon already runs a credit operation for customers in India, where it’s battling powerful local rivals.)
What’s in it for the banks: keeping a rival close and being tied to a company that millennials love.
The tech flyaround
• Now its legal fight with Waymo is over, Uber wants to partner with its erstwhile foe once more, unnamed sources say. Pennsylvania’s attorney general sued Uber for violating the state’s data breach notification law. And Uber booked more than half the seats available for the London premiere of “Brilliant Jerks,” a play inspired by the company.
• Glass Lewis recommended that Tesla shareholders reject a plan to award Elon Musk $2.6 billion in equity. (Bloomberg)
• Austrian banks should treat virtual currency transactions as suspicious until shown otherwise, the country’s financial markets regulator says. (Bloomberg)
• Meet Harmeet Dhillon, the lawyer trying to make Silicon Valley a safe space for conservatives. (Bloomberg)
• The U.N. made Michael Bloomberg a special envoy for climate action. (NYT)
• Disney named James Pitaro, the chairman of its consumer products and interactive division, as the next president of ESPN. (NYT)
• Noah Beck, previously a partner at Schulte Roth & Zabel, has joined Weil, Gotshal & Manges as a partner in its tax practice. (Weil)
• Kleiner Perkins has hired Ilya Fushman from Index Ventures as a general partner and managing member. (KPCB)
• Inge Thulin will step down as C.E.O. of 3M in the summer and become executive chairman. He will be replaced by the chief operating officer, Michael Roman. (WSJ)
• Luc Jobin, the C.E.O. of Canadian National Railway, has left abruptly, leaving operational challenges. (WSJ)
• Matthew Henick, the former head of BuzzFeed Studios, has joined Facebook as head of content planning and strategy. (TechCrunch)
• Martin Shkreli’s assets (including that Wu-Tang Clan album) can be seized if he doesn’t come up with the $7.36 million he owes the government, a judge has ruled. (NYT)
• Capitolis, which provides capital markets technology, has raised $29 million from investors like Index Ventures and Sequoia Capital. (Business Wire)
• The head of Yale’s $27 billion endowment, David Swensen, has called the editor in chief of the student newspaper there a “coward” over its coverage of the fund and asked if she understood “simple English.” (Bloomberg)
• More than half of C.I.O.s at the world’s top companies by revenue say they expect to leave within the next three years, according to a Korn Ferry International report. (WSJ)
• Puerto Rico remains far from being back in business: Some parts of the island are still in the dark. (NYT)
• Meet the judge handling over 400 federal lawsuits against central figures in the national opioid tragedy, including makers, distributors and retailers of prescription painkillers. (NYT)
• The proportion of women in senior roles at central banks fell last year, to 19 percent from 31 percent. (Bloomberg)
• Diversity and inclusion were buzzwords at Davos, but not at the SuperReturn International conference in Berlin, where 13 percent of the speakers were women. (Bloomberg)
• Microsoft’s new diversity chief has settled with IBM, which had sued her over a noncompete agreement, and will start in July. (Axios)
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