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| 1 | | Chevron will acquire PDC Energy for $7.6B in stock and debt in a deal projected to impact its U.S. operations substantially. The acquisition is part of a broader strategy for Chevron to expand production and consider other additions beyond 2027. More: - Chevron's acquisition of shale producer PDC Energy, at $72 per share, is expected to close by year-end and add 10% to its reserves.
- "It is a strong investment in our U.S. business," says Chevron CEO Michael Wirth.
- Within a year of the deal's conclusion, Chevron's capital expenditures and free cash flow will increase by nearly $1B.
- The acquisition will increase Chevron's oil and gas production in the DJ basin in Colorado by 260,000 barrels per day, elevating it to one of its top five business assets in terms of production.
- PDC Energy shares increased 9% in morning trading, while Chevron shares dropped less than 1%.
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| 2 | | 
What happened: Micron Technology Inc. products were declared to have failed a cybersecurity assessment in China. Due to "relatively serious" cybersecurity threats discovered in Micron's devices, Beijing banned purchasing its products for crucial infrastructure projects. Why it matters: The semiconductor industry has evolved into a national security struggle between the U.S. and China. This action intensifies the ongoing technological conflict between the two biggest economies. In 2022, Micron generated $3.3B in revenue from mainland China, accounting for 10% of the company's overall $30.7B revenue, and has manufacturing facilities in China. Where to see the impact: Samsung Electronics and SK Hynix, two of Micron's principal rivals, both enjoyed share price increases in Seoul. At the same time, Chinese chip companies like SMIC and Hua Hong Semiconductor rose in Hong Kong. The prohibition may impact other U.S. chipmakers exposed to the Chinese market, including Qualcomm, Broadcom, and Intel. The effect is anticipated to have a minimal impact on Micron, though. | | | |
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| 3 | | Magic Circle's Allen & Overy and Shearman & Sterling are joining together, subject to partner approval, to form one of the biggest law firms in the world, with almost 4,000 solicitors spread across 49 offices. The merger of two significant legal industry rivals is the first in more than 20 years, and the new business will concentrate on private equity, life sciences, and energy transition. More: - With over $1B in revenue in the U.S., 30% from the U.K., and 40% from the rest of the world, the merger will give both companies enormous size in London and New York.
- New York-based Shearman has been attempting to expand and improve profitability, while London-based Allen & Overy has been trying to break into the lucrative U.S. market.
- Due to a decline in demand and a need for economies of scale, Shearman had been restructuring and making cuts.
- After the partners' approval, the merger is anticipated to close between six to 12 months, and neither company expects any significant difficulties in aligning pay structures.
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| 4 | | Ferrari experienced a 24% rise in profit to $328.8M on a 10% rise in shipments in the first quarter of the year; revenue surged 20% to $1.55B YoY. EPS of $1.76 exceeded analysts' estimates of $1.60. More: - Ferrari's EBIT profit margin increased one percentage point from the prior year to reach 26.9%.
- High demand for products like the Portofino M, 296 GTB, and 812 Competizione was the primary factor in the company's successful performance.
- Ferrari's order book is filled until 2025, indicating upcoming solid demand.
- Ferrari's Purosangue SUV-like model, priced at $400,000, is set for delivery in Europe by the end of Q2 and in the U.S. by Q3.
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| 5 | | A multiyear relationship concentrating on intellectual property licensing and contract manufacturing in North America is being discussed by Meta and Magic Leap. The technology developed by Magic Leap, which includes waveguides that produce lifelike visuals, is viewed as a crucial component for creating a metaverse. More: - Well-funded AR start-up Magic Leap first concentrated on consumer applications but eventually moved to enterprise ones and looked toward IP licensing and manufacturing alliances.
- Despite investor concerns about funding $10B annually, Meta continues investing heavily in AR/VR, as Apple is set to unveil its version of a "mixed reality" device.
- The alliance with Magic Leap also supports Meta's goal of lowering reliance on China for hardware production.
- The partnership is not anticipated to produce a special combined Meta-Magic Leap headset.
Zoom Out: - According to IDC, Meta dominates the VR/AR headset market, with around 80% of all units sold last year, and Bytedance (10%) takes second place.
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| 6 | | Mizuho Financial Group has agreed to pay $550M, or a 121% premium over the most recent closing price ($15 per share), to acquire American M&A consultancy company Greenhill & Co. Mizuho seeks to gain more market share in the global investment banking fee market. More: - Robert Greenhill, a former executive of Morgan Stanley, started Greenhill in 1996.
- The Greenhill company will be incorporated into Michal Katz's banking division at Mizuho.
- In addition to seeking expansion in M&A advising and equity underwriting, Mizuho has concentrated on U.S. debt underwriting.
- Sumitomo Mitsui Financial Group also increased its foothold in the U.S. by raising its holdings in Jefferies Financial Group.
- Following the news, Greenhill's shares more than doubled to $14.68.
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- Geely has increased its stake in luxury carmaker Aston Martin to 17%, surpassing Mercedes-Benz, by investing $291M in a new long-term partnership that will involve technology and component supply.
- Biomilq, a North Carolina-based company, is working to replicate breast milk outside the body, which could revolutionize infant nutrition and could help alleviate shortages of infant formula.
- GM announced the launch of its Cadillac Escalade EV, known as the "Escalade IQ," this year as part of its plan to transition Cadillac into an electric brand by 2030.
- Ad-supported streaming is increasingly being embraced by media companies looking to monetize their streaming services, as exemplified by NBCUniversal, Fox, and Warner Bros. Discovery's pitches to advertisers.
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Term of the Day Gross domestic product: Gross domestic product (GDP) is a measure of the total value of goods and services produced within a country’s borders in a given year. Question of the Week What's the most effective team-building exercise you've ever participated in? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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