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| Here’s your daily business briefing. - ✈️ Boeing buys Spirit Aero for $4.7B
- 🔍 Deep Dive: IEA forecasts decade of oil surplus
- 💄 Online cosmetic sales surge despite inflation: Report
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Boeing ($BA) will acquire Spirit AeroSystems in a $4.7B all-stock deal to improve supply chain reliability and safety issues, with Spirit priced at $37.25 per share. The total transaction, including Spirit's net debt, is valued at about $8.3B. More: - Airbus (AIR.PA) will pay $1 for Spirit's Airbus-related assets while receiving $559M in compensation, depending on the final terms of the deal.
- Airbus specified that these activities encompass manufacturing A350 fuselage sections in North Carolina, France, and A220 wings and mid-fuselage in the U.K.
- In 2023, Spirit earned 64% of its $6B in revenue from Boeing, totaling $3.9B, and 19% from Airbus, amounting to $1.1B.
- Boeing will integrate Spirit to enhance quality control and has committed $455M in additional payments from 2023 to 2025.
- Boeing's shares dropped 1%, while Spirit's rose 5% in premarket trading after the acquisition announcement, indicating mixed investor reactions.
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What the numbers say: The IEA says that by 2029, global oil consumption is projected to level off at 105.6 million barrels a day, about 4% higher than last year, while production capacity will exceed demand by 8 million barrels a day. Developed economies' oil use will drop to 43 million barrels a day by 2030, and producers in the Americas, led by the U.S., will add 4.8 million barrels a day of capacity. Relevance: The shift towards clean energy and improved fuel efficiency will plateau oil demand, significantly impacting global oil markets and potentially driving down prices due to increased production capacity from the Americas. This surplus challenges oil companies to reassess strategies, potentially affecting OPEC+ market share and global price stability. More data: The IEA projects oil consumption will grow due to economic expansion in India, China, and increased aviation and petrochemical use. Significant production increases from the U.S., Argentina, Brazil, Canada, and Guyana are expected, though the IEA's forecasts face criticism over climate change assumptions. | | | |
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| 3 | | Adobe Analytics reports that despite trading down in categories like electronics and apparel due to inflation, consumers increased online spending on cosmetics by 8.8% to $16.3B from January to May 2024. The analysis covered over one trillion visits to U.S. retail sites and examined 100 million SKUs across 18 categories. More: - While most consumers turned to cheaper options to manage inflation, electronics and apparel saw only modest YoY growth of 3.2% and 2.9%, respectively.
- Prestige cosmetics, especially fragrances and lipsticks, experienced a significant boost, with daily online fragrance sales rising 53% from April to May.
- Lipstick sales surged 49% from April to May and rose 27.7% YoY, showing consumers' readiness to spend more in this category.
- Subcategories such as lip gloss, setting products, mascara, concealer, foundation, and nail polish also saw significant YoY sales growth.
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| 4 | | Nokia ($NOK) has unveiled plans to acquire Infinera Corp. ($INFN) for $2.3B, aiming to strengthen its optical network division, particularly in North America. Infinera's stock jumped approximately 22% in response to the acquisition announcement. More: - The deal values Infinera at $6.65 per share, a 26.4% premium over its pre-announcement closing price of $5.26.
- Nokia will provide cash equivalent to at least 70% of the purchase price.
- Infinera shareholders can receive up to 30% of the deal's consideration in Nokia's American Depositary Shares (ADS).
- The acquisition is expected to boost Nokia's earnings per share in the first year and contribute over 10% to profits by 2027.
- Headquartered in San Jose, California, Infinera specializes in optical semiconductors and networking equipment for telecommunications.
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| 5 | | "Inside Out 2," produced by Disney and Pixar, has become the top-grossing film of 2024 with earnings surpassing $1.014B worldwide, marking the first animated movie since Warner Bros.' "Barbie" to achieve this milestone. It set a new record as the fastest animated film to reach $1B, highlighting a resurgence in Disney-Pixar's box office success not seen since 2019. More: - The film's success was largely due to family audiences, who made up over 70% of domestic debut attendance.
- With 14% of its audience between 13 and 17, the film also appealed to teenagers.
- Following the epidemic, Pixar encountered difficulties at the box office due to several films making theatrical debuts on Disney+.
- The next family and teen-oriented movie, "Despicable Me 4," from Universal and Illumination, will be released over the long weekend of the Fourth of July.
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| 6 | | TikTok Shop's Deals for You Days event, starting July 9, will offer discounts on thousands of products from brands like L'Oréal Paris and Maybelline New York, coinciding with Amazon's Prime Day on July 16-17 and other summer sales. The sale will feature deals across categories, including apparel, beauty, home decor, and books. More: - Forrester reports that 57% of back-to-school shoppers now discover new products primarily through social media.
- Forrester's research shows that 52% of consumers have bought products they saw on social media, but only 46% made purchases directly from social media ads.
- Content creator Tati Westbrook will feature her favorite beauty products in a live stream, while brands like Benefit Cosmetics, Coola, and Simplymandys will host live shopping events on the platform.
- TikTok is evolving from a social network into an entertainment and commerce company, aiming to compete directly with Amazon in online sales.
- From January to May 2024, online spending on cosmetics rose 8.8% to $16.3B, showing strong consumer interest despite economic challenges.
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 | 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 Shriram Jeevakumar | |
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