FTI Consulting News Bytes – 27th May
In this week’s news, we first go to the US as Broadcom has agreed to acquire cloud software company VMware for $69bn – as the group diversifies to computing services. We then turn to the UK government’s decision to examine the national security implication of French telecoms group Altice’s 18% stake in BT. We also look at some of the fintech unicorns which are not cutting jobs, following Klarna’s announcement of its plans to lay off 10% of its workforce. We then turn to the cryptocurrency market, as Andreessen Horowitz launches a $4.5bn fund to invest in blockchain technology, and finish with Dyson’s plans to produce robots to do household chores by 2030.
This week’s news
Chipmaker Broadcom to buy software group VMware for $69bn
US chipmaker Broadcom has agreed to acquire cloud software company VMware for $69bn, including debt, in a takeover that signals the market for large corporate mergers might be thawing after a stock market rout at the start of the year. The takeover, which is being supported with $32bn in bank financing, would help transform Broadcom, an acquisitive semiconductor group, into a diversified tech company ranging from chips to cloud computing services.
UK government to probe Altice’s BT stake
The UK government is to examine the national security implications of French telecoms group Altice’s 18% in BT, weeks before the investment vehicle controlled by billionaire Patrick Drahi will become free to make a takeover bid for the national asset. BT said on Thursday it had received a notification that business secretary Kwasi Kwarteng was exercising his “call-in power” under the new National Security and Investment Act to examine December’s increase in the French company’s stake. Kwarteng will now have 30 working days to assess the holding on national security grounds, although that could be extended by 45 days if necessary.
Not all fintech unicorns are cutting jobs
After Klarna announced plans to lay off 10% of its workforce Monday, some rival fintechs are making it clear that they have no intention of cutting jobs or freezing hiring. Revolut, the $33 billion digital banking start-up, said the company is “actively hiring,” with over 250 open roles listed on its website. Meanwhile, Wise CEO Kristo Kaarmann said the London-based money transfer firm is in a “different place” to tech firms that are letting staff go. While, German digital bank N26 said it has “no current plans to reduce headcount.” Other financial tech firms, such as Robinhood and Better.com, have also taken measures to cut jobs and rein in costs this year. Digital finance got a major boost from the Covid pandemic as people turned to online channels to make payments, apply for loans and trade shares. But the sector has had a difficult time in 2022 as the war in Ukraine, rising inflation and higher interest rates have led investors to question lofty valuations in the space.
Andreessen Horowitz launches largest ever cryptocurrency fund
Silicon Valley venture capital company Andreessen Horowitz launched a $4.5bn fund on Thursday, to invest in blockchain technology. Although this new fund is Andreessen Horowitz’s fourth focusing on cryptocurrency investments, it is unprecedented in its size, and will target NFT communities, start-ups of all stages, and decentralised finance, among other areas within the Web3 sector. Looking at the sector’s future in powering the internet, a general partner at the venture capital giant hailed a “golden era” for Web3 and blockchain-based platforms. The launch comes in spite of the declining cryptocurrency market value, which has seen Bitcoin’s value fall by more than half since November 2021, and the $40bn collapse of “stablecoin” terra. The company is betting on the future stabilisation of the cryptocurrency market after its recent turbulence, as it focuses on “the five, 10-year horizon and beyond”.
Dyson’s “big bet” on robots
On Wednesday, in an attempt to move beyond vacuum cleaners, dryers, and hair care products, Dyson announced its plans to produce robots capable of completing household chores by 2030. The technology company released images and footage of robot arms being used to undertake housework, including a video of a robotic hand picking up and tidying a teddy. Although other household robots, such as Dyson’s own robotic vacuums, are already on the market, many actions, like the ability to grasp fragile objects, still elude the capabilities of robots. At the International Conference on Robotics and Automation in Philadelphia this week, Dyson declared its plans to recruit an additional 700 robotics engineers. Jack Dyson, the founder’s son and the company’s chief engineer, confirmed that this “big bet on future robotic technology” will drive Dyson’s research.
Top Tweets of the Week
- CNN reposts its piece featuring images by NASA’s Earth Observatory’s of an undersea volcano erupting
- City A.M. writes that the FCA is pushing for reform of London’s listing regime in an attempt to boost growth and competitiveness
- Katie Martin, Markets Editor at the Financial Times, reposted the publication’s article on Binance promoting terra as safe’ investment before $40bn collapse, quoting the cryptocurrency exchange’s former view that it was a “safe and happy” opportunity
Number of the Week
$360bn – The amount Samsung plans to spend over the next five years to 2026 to expand businesses from chips to biopharmaceuticals according to Bloomberg
What’s happening next week?
- 28 May: UEFA Champions League Final
- 30th May – 31st May: European Council special meeting
- 2nd June: OPEC and non-OPEC Ministerial Meeting
- 3rd June – 4th June: Bank holidays to celebrate Platinum Jubilee
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