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| Happy Friday, Insiders!! Today's Business newsletter covers: - 🥃 Kevin Hart's tequila brand partners with the Philadelphia Eagles
- 🌬️ Deep Dive: The Wind-farm revolution in the U.S. stalls
- 🤝 Big Deal Round-Up: Mega-deals reshape industries; sports and tech partnerships form
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading for Quick Hits and the Knowledge Hub. Thank you!! Shriram
p/Shriram | |
| 1 | | Kevin Hart's tequila brand, Gran Coramino, has signed a sponsorship agreement with the NFL's Philadelphia Eagles, encompassing stadium signage, branded bars, and digital platform marketing. Hart, a lifelong Eagles fan and Philadelphia native, looks forward to leveraging his celebrity spirits brand's appeal and the growing preference for tequila over beer among American drinkers. More: - With spirits overtaking beer in market share in 2022, spirits brands have become more active in sports sponsorships.
- Major sports leagues like the NHL, MLB, NBA, and NFL have signed sponsorship agreements with liquor companies.
- These sponsorships are seen as ways to expand brand awareness and attract new customers.
- Given the escalating cost of NFL tickets, Gran Coramino's agreement with the Eagles gives it access to a high-end consumer base with extra money.
- According to TicketSmarter, the average NFL ticket will cost $377 in 2023, a 60% increase over the previous season.
Q: How do you perceive the trend of spirits brands increasingly entering into sports sponsorships, and can it significantly impact a brand's success in the spirits industry? Join the conversation here. |     | |
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What the numbers say: The world's largest offshore wind farm developer, Ørsted, has seen its worth drop by nearly $10B (or one-third of its market value) since issuing a warning about probable impairments of up to $2.3B on its U.S. wind projects. Although the Biden administration hopes to have 30 gigawatts of offshore wind power by 2030, it is far more expensive than solar and onshore wind. Relevance: Due to rising loan rates, protracted building times, and hefty upfront costs, the offshore wind industry is facing financial difficulties. Its expansion is further hampered by transmission problems, unfavorable seabed conditions, and changes in the supply chain, which has led to proposals for legislative measures like inflation-linked contracts to reduce risks and boost industry growth. Where to see impact: The ability of the industry to support sustainable energy goals in the U.S. and around the world is impacted by difficulties faced by businesses, including Ørsted, Shell, Avangrid, Siemens Gamesa, and Vestas, in offshore wind projects. | | | |
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| 3 | | Big Deal Round-Up Multi-billion dollar deals consolidate packaging and snacking, while private equity enters distribution and sports assets; big tech and sports marketing partnerships also emerge. M&A: - In an $11.2B deal, Smurfit Kappa Group will buy WestRock Co., creating the industry giant Smurfit WestRock under Smurfit Kappa management's direction.
- Smucker will buy Hostess Brands for about $5.6B at $34.25 per share, with the deal expected to close in Smucker's fiscal third quarter, ending in January.
- By acquiring 94.1% of Premier League team Everton FC from owner Farhad Moshiri, Miami-based 777 Partners LLC will be the latest U.S. investment company to fund the league.
- Esmax Distribucion SpA, a Chilean fuel distributor, will be acquired by Saudi Aramco, allowing it to expand its global chemical and refining activities and secure markets for its refined oil products.
- Following Robert G. Miller's resignation from his senior post due to charges of sexual misconduct, Taiwan's WT Microelectronics is buying Future Electronics for $3.8B.
Partnership: | | | |
| 4 | | Ford is raising the output of its hybrid F-150 pickup trucks to boost growth and profitability by offsetting weaker sales of all-electric vehicles. Although precise production estimates weren't revealed, this move will probably result in tens of thousands more hybrid cars, but prospective United Auto Workers labor strikes could hinder output. More: - For the 2024 model year, Ford wants to grow sales of the V-6 hybrid F-150 model to about 20% of all F-150 sales in the U.S.
- Ford predicts that the F-150 hybrid will outsell Toyota's RAV4 and Prius as the most popular hybrid in North America.
- Focusing on hybrid automobiles helps maintain jobs in the engine production industry and meets varied consumer demands.
- The 2024 F-150 hybrid will have 430 horsepower and 570 lb-ft of torque, along with additional improvements like a new tailgate design and safety features.
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| 5 | | In response to rising borrowing costs that have driven investment-grade and junk bond yields to levels near 6% and 8.6%, respectively, U.S. corporate bond issuers are switching to shorter 10-year average maturities, the lowest in more than a decade, in the hopes of refinancing at lower rates in the future. Additionally, businesses are using more asset-backed loans to lower interest costs in the face of high rates. More: - With 2023 debt having the shortest average term of 10.5 years since the financial crisis, daily issuance of investment-grade bonds has reached its highest level since 2020 as businesses adjust to high rates.
- Junk bond issuance maturities have plummeted to just six years, the lowest average since 1990, even as overall junk bond issuance has risen a third in 2023 after declining last year.
- Investor preference for shorter maturities over higher-yielding longer bonds has increased due to the inverted Treasury yield curve, generating a "push-pull" dynamic where corporations favor shorter debt.
- Businesses predict more significant borrowing opportunities with possibly lower yields in 2024 or 2025.
- The preferences of different investor types vary; some choose short-term debt due to its visibility, while long-term investors look to lock in greater rates provided by higher-grade corporations.
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| 6 | | An FDA panel unanimously voted to potentially ban the almost century-old decongestant ingredient phenylephrine, included in many over-the-counter cold remedies, since it did not go through today's more stringent clinical trials in light of recent research showing its ineffectiveness in treating congestion. This allows the FDA to omit oral phenylephrine from its list of permitted substances, which may result in the withdrawal of several goods, including Benadryl, from U.S. shelves. More: - In 2021, sales of over-the-counter medicines for treating cough, sinus, and flu symptoms, including phenylephrine, were estimated to be $5B.
- According to a 2020 study, phenylephrine can be found in approximately 260 oral nasal and sinus medications.
- According to the FDA, recent industry-funded research showed that phenylephrine-based medications provided no more comfort than placebos.
- The Consumer Healthcare Products Association contends that phenylephrine should stay on the market because earlier studies have shown it to be effective.
- Experts advise against phenylephrine and suggest antihistamines, pseudoephedrine-containing tablets, or nasal decongestants.
- After restrictions on the other two chemicals, the use of phenylephrine in over-the-counter decongestants surged.
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- After rising 25% in its debut, the stock of chip designer Arm was expected to continue rising, but analysts believe the valuation seems excessive given that its IPO set the precedent for future listings like Instacart.
- American Airlines and Spirit Airlines joined Alaska and Southwest Airlines in projecting lower third-quarter profitability as they both downgraded their summer profit outlooks due to higher fuel and other costs.
- With increasing competition and complexity in media measurement, Nielsen named Karthik Rao as its new CEO to succeed David Kenny.
- Google settled location privacy violations with California for $93M, following a $391.5M deal with 40 states last November.
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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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