TheChek News Flow

Elon Musk’s attacks on equality laws trigger dispute over Starlink in South Africa

Ruling coalition is divided over whether to exempt US satellite company from post-apartheid Black empowerment rules

Elon Musk’s hopes of launching Starlink in South Africa are being delayed by fierce infighting within the country’s ruling coalition over Black economic empowerment laws the US entrepreneur has characterised as “racist”.

Foreign investors in South Africa’s telecommunications sector are required to provide 30 per cent of the equity in a project to Black-owned businesses to qualify for a licence, a policy championed by the African National Congress to redress racial inequalities created under apartheid.

But Musk, who was born in South Africa, on Monday described the country’s policies as “openly racist”. US President Donald Trump also weighed in this weekend, saying South Africa’s government was “treating certain classes of people very badly”, a reference to a land expropriation bill also intended to address unequal ownership.

South African officials say Musk has expressed strong interest in launching Starlink’s broadband-by-satellite service in the country. The billionaire in September said he was “still waiting for regulatory approval” from Pretoria after launching in neighbouring nations including Botswana, Mozambique and Zimbabwe.

Starlink could become a test case of how far the ANC is prepared to dilute equality laws to attract investment and whether the pro-business Democratic Alliance — a key member of South Africa’s fragile government of national unity — is prepared to risk the stability of the coalition by pushing its opposition to Black empowerment.

Solly Malatsi, minister of communications and digital technology and deputy chair of the DA, has raised the possibility of giving Starlink, operated by Musk’s SpaceX, a carve-out from empowerment rules.

Malatsi told the Financial Times it might be possible to extend to the telecoms sector exceptions to ownership rules — known as “equity equivalent programmes” — offered to other sectors, including automobiles.

“I recognise the opportunity that equity equivalence programmes in the [telecoms] sector can help in expanding broadband connectivity to the quarter of our population which does not have access to the internet, while grappling with the reality that the current legislation doesn’t cover for that,” he said.

But ANC stalwarts are likely to oppose any attempt to water down Black empowerment rules. One person in government told the FT on Monday the party is divided on the Starlink issue — even more so after Musk’s latest intervention.

“The reformists would agree that an exception for Starlink is necessary, while the hardliners see any dilution of the rules as an attack on its quest for racial empowerment,” the person said. “But this is complicated because Musk’s posture towards South Africa this week also makes many in the ANC very uncomfortable.”

Malatsi’s predecessor as minister, the ANC’s Mondli Gungubele, was explicit two years ago that, if Starlink were to operate in South Africa, it would need to comply with the “prevailing legislation” on Black empowerment. 

Parks Tau, minister of trade, industry and competition and an ANC member, in January appeared to double down on Black-empowerment rules by proposing a new R100bn ($5.3bn) “transformation fund” to invest exclusively in Black-owned businesses. Foreign investors would have to pay up to 25 per cent of the value of their operations into the fund.

Tau called the fund a “catalyst for change”, but the DA condemned the proposal, saying it would “not support this madness”. The DA’s chair, Helen Zille, has called the policies “a figleaf for corruption”.

President Cyril Ramaphosa, who met Musk to discuss possible investments by SpaceX and Tesla on the fringes of the UN general assembly meetings in New York last September, said he had told the US entrepreneur: “I want you to come home and invest here.”

One person familiar with the tug of war within the ruling coalition noted Ramaphosa invited the ANC’s Tau to the September meeting, but not the DA’s Malatsi. “Nobody knows what was discussed in that meeting,” the person said. “There was no internal brief, no steer from the president that any commitment was made.”

The BEE Chamber, a South African consultancy normally supportive of Black empowerment initiatives, described Tau’s R100bn transformation fund as being “to investment what mosquito repellent is to mosquitoes”.

One senior DA official told the FT: “The ANC appears intent on doubling down on what they refer to as the third wave of black empowerment, even at the cost of growth.” South Africa’s economy has not grown at all in per capita terms in 15 years.

“This is one of the most perverse effects of broad-based Black economic empowerment, which is not broad based and which doesn’t empower a lot of people,” he said.

Starlink, which is the main revenue driver for Musk’s SpaceX, has also faced a political backlash in Canada, where the premier of Ontario on Monday said he would rip up a $100mn contract with the company in retaliation against US tariffs.

SpaceX did not respond to a request for comment.

Industry braces for tit-for-tat trade war that could spark wave of bankruptcies among parts makers

Car companies are bracing for what could be an even bigger shock to the global automotive supply chain than the Covid pandemic amid uncertainty over the duration and extent of Donald Trump’s global tariff war. 

Just two days after the US president issued an executive order applying tariffs of 25 per cent to all imports from Canada and Mexico, as well as 10 per cent on goods imported from China, Trump put levies on Mexican imports on hold for a month following a “very friendly” conversation with Mexican President Claudia Sheinbaum. Shortly afterwards, Canadian Prime Minister Justin Trudeau also reached an eleventh-hour deal with the US for a 30-day pause on tariffs.

Carmakers have been cautious about making significant and costly strategic changes without more clarity on the longer-term direction of US trade and energy policy, although executives at General Motors, Stellantis and Tesla have signalled they will increase manufacturing in the US to offset any impact of tariffs. 

“If you start overreacting, it’s a bit dangerous now,” Michael Lohscheller, chief executive of Polestar, the electric-car maker backed by China’s Geely, said in a recent interview. 

Many car executives had turned to the experience of Trump’s first presidency in playing down the risk of an international tariff war, saying the US president had not carried through on threats of additional levies against its trading partners. 

Supply chain experts say the worst-case scenario, in which both US and retaliatory tariffs are implemented, would be likely to lead to a chain of bankruptcies among weaker car parts suppliers. 

The global automotive supply chain is so complex and interconnected that a component made in Mexico could end up at an American plant before going back to Mexico for final assembly and then being sold to the US market — which could result in “a tariff-on-tariff” situation. 

“The mechanics of it are almost as bad, if not worse than the actual amounts because the accounting and book-keeping and paperwork requirements involved to ensure compliance are massive,” said Ian Henry, an automotive production expert who runs the AutoAnalysis consultancy. 

Henry warned that the supply chain disruption could be worse than during the pandemic if a tariff war endured and carmakers were not able to provide enough financial support to keep their suppliers afloat.

Mikael Bratt, chief executive of Swedish seatbelt and airbag maker Autoliv, said it would immediately begin discussions to pass on the cost of higher tariffs to customers if they were implemented against Mexico.

“There is no reason at all why we . . . absorb any cost like that,” Bratt said at an earnings briefing last week. “Ultimately, it will be higher cost for vehicles sold in the US.”

The traditional “Big Three” carmakers, which have spread their footprint across the continent since the 1994 signing of the North American Free Trade Agreement, are the most vulnerable to a hit to profits. GM was the most exposed, analysts said, with Chrysler owner Stellantis not much better off. Ford is the least exposed because it imports the smallest share of vehicles from outside the US.

GM makes its popular, high-margin Chevrolet Silverado at its Silao plant in Mexico and Oshawa in Canada, which increases its exposure. BNP Paribas analyst James Picariello said that while the carmaker could probably shift production to the US for about 300,000 of the 350,000 trucks it currently imports, such a switch would take 12-18 months as it adjusted supplier shipments and hired workers.

That would add about $1bn in labour costs, he said, as workers earned more in the US than in Mexico. GM’s operating earnings would take a 7 per cent hit, but that looked favourable compared with a possible 50 per cent reduction that could come from a 25 per cent tariff.

“A billion dollar headwind seems like a manageable scenario right now,” Picariello said.

Investors and analysts were assuming that any tariff on goods from Canada and Mexico would ultimately be negotiated down, he added, because otherwise “the numbers get too large for the industry to properly survive.”

Even before any tariffs against the EU, European carmakers are exposed. Volkswagen is in the worst position, with 45 per cent of its US sales coming from cars made in Mexico and Canada, although the American market accounts for a small share of the group’s total revenue.

With all US-sold vehicles from its luxury Audi and Porsche brands manufactured outside the country, Moody’s estimates that a 25 per cent Mexican tariff will reduce Volkswagen group’s global earnings before interest and taxes by more than 15 per cent.

“We have a factory in Mexico and, independently of which administration is at work, our plan is to become stronger in the US,” Audi chief executive Gernot Döllner said last month. But he added: “We think that tariffs are wrong and we believe in free trade.” 

Fellow German carmaker BMW is less exposed, as 65 per cent of its cars in the US are built locally while it is also a net exporter from the US. 

“There might be volatile situations that could be less predictable, but I’m really optimistic” about the US, said Jochen Goller, BMW’s board member in charge of customer, brands and sales. “I think it will be one of the growth markets for us in the next year.” 

Investors have pinned hopes that Elon Musk’s close ties to Trump will shield Tesla from the fallout from the president’s policies, but the world’s largest electric vehicle maker is still exposed. 

Tesla assembles all its vehicles sold in the US locally but it sources 20 to 25 per cent of its components for the Model 3, Model Y and the Cybertruck from Mexico, according to Barclays. 

“Over the years, we’ve tried to localise our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses,” chief financial officer Vaibhav Taneja said at an earnings briefing last week, warning of a hit to its profitability from Trump’s tariffs.

The company could also be a target of retaliatory tariffs by Canada. Former finance minister Chrystia Freeland, who is running to replace Trudeau as prime minister, has said Ottawa should retaliate against US tariffs by adding huge levies on Tesla vehicles to punish Musk. 

The tariff war also comes as Tesla grapples with declining sales in Europe due to slowing demand for electric vehicles, heightened competition and a consumer backlash against Musk’s political activism. 

According to French industry association La Plateforme Automobile, Tesla’s January sales in France were 63 per cent lower than a year earlier.

Smaller Japanese automakers, such as Mitsubishi Motors and Subaru, could benefit from a lack of production in Mexico and Canada. Honda is also comparatively well placed, since two-thirds of its US sales are assembled locally, according to Barclays.

Takao Kato, chief executive of Mitsubishi Motors, told reporters on Monday that tariffs would have little impact on the company and that it could even receive a slight “tailwind” from increased exports to the US if tariffs were not extended to the rest of Asia.

However, he subsequently retracted his comment, saying that “on balance, it looks like there are more headwinds”, and clarified that Japan could benefit if it managed to wriggle out of being the target of heavy tariffs.

Renault is also unlikely to be hard hit as it has no sales in the US or Canada. The French carmaker’s shares dropped just 0.6 per cent on Monday, far below the falls suffered by other European carmakers with greater US exposure.

Renault, one of the few European brands not to issue a profit warning last year, was “doing very well” in Europe,” said Stephen Reitman, an analyst at Bernstein. The company’s exposure to tariffs is through its stake in Nissan, which is currently pursuing a merger with Honda. 

But while the company is less exposed than rivals, Reitman added: “There’s not many winners in all of this . . . it’s reducing wealth, which reduces GDP, which reduces car sales.”

Flexing

Brussels is open to increasing the “flexibility” of the EU’s rules governing national debt and fiscal deficits to allow capitals to spend more on defence, in what would be a significant shift from the European Commission, following a summit of EU leaders to “brainstorm” ways to increase the continent’s security.

Context: The EU’s spending rules limit deficits to 3 per cent of GDP and debt to 60 per cent. The rules were recently reformed to give countries more wriggle room, but several member states have been asking the EU to exempt military spending from the thresholds altogether.

Making this a reality took centre stage at yesterday’s meeting, where trade with the US and UK-EU relations were also discussed.

António Costa, the EU Council president who chaired the meeting, said afterwards that EU leaders expected the commission to propose ways “to create more fiscal space . . . for more defence spending”.

“I am willing to explore and will use the full range of flexibility in the new stability and growth pact to allow for a significant increase in defence spending,” said commission president Ursula von der Leyen, referencing the new EU fiscal rules.

“It’s obvious that we need more resources to build up and strengthen our common defence. It’s a fact. At the national level but also at European level,” Finnish Prime Minister Petteri Orpo told the FT after the summit. “At the national level, the flexibility of fiscal rules is one tool, and I hope that we can use that, it’s [the] fastest way to boost spending to defence.”

Orpo also said that while his government had previously been against common funding, the “existential question” of Russian aggression meant that he was now “open to different kinds of solutions”.

German Chancellor Olaf Scholz endorsed the fiscal flexibility demands, but stopped short of endorsing common EU debt to finance them.

“We see a big fragmentation between many defence projects . . . this has to change,” Scholz said. During the summit he also proposed reforming the EU’s competition rules on defence, for countries to co-operate on the same tenders.

Scholz said that some countries faced greater hurdles than others in raising their military spending. “And that is why it is a very common view that there needs to be more flexibility . . . also for example through borrowing,” Scholz said.

But he specified that the EU “does not have the prospect of taking on joint debt. It is about creating more flexibility for the individual countries” — including for Germany, where he called for a reform of the strict debt brake.

But Scholz’s colleagues noticed a change in tone: “The approach of the German chancellor is today now much more positive [than in previous discussions],” said Polish Prime Minister Donald Tusk.

Prices in the Eurozone unexpectedly rose by 2.5 per cent in January, although the increase in inflation is not expected to alter policymakers’ plan to continue lowering interest rates.

Première mondiale pour Safran et l’Agence européenne de la sécurité aérienne avec la certification du premier moteur électrique destiné à propulser des drones, des petits avions et des jets régionaux.

Le premier moteur d’avion tout électrique certifié dans le monde, l’ENGINeUS 100, est Français. Son concepteur, le motoriste Safran, a annoncé, ce lundi, avoir obtenu sa certification auprès de l’Agence européenne de la sécurité aérienne (EASA), à l’issue d’une campagne d’essais de 1 500 heures de tests et de plus de 100 heures de vol en conditions réelles. L’EASA devient la première agence dans le monde à avoir défini les règles de navigabilité ainsi que les méthodes et normes de certification de ce type de moteurs, appelés à devenir des standards mondiaux.

Il s’agit donc d’une double première mondiale pour l’aéronautique française et européenne, qui démontre sa capacité à avoir de l’avance dans une industrie stratégique. Contrairement à d’autres secteurs industriels qui sont dominés par les États-Unis et la Chine. «C’est une réalisation française mais aussi une réalisation européenne qui acte un moment clef dans l’histoire de l’aéronautique. C’est une immense fierté pour nous et nos partenaires », insiste Bruno Bellanger, président de Safran Electrical & Power.

4 lignes de production automatisées dont 2 en France

La certification de l’ENGINeUS 100, capable de délivrer une puissance électrique allant de 100 à 200 kilowatts, en fonction de l’architecture des avions qu’il motorisera est le fruit d’un «investissement conséquent» et de plusieurs années de travail. «Nous avons engagé les premiers travaux de recherche et technologie (R&T) en 2016 et la certification en collaboration avec l’EASA, il y a quatre ans», précise Bruno Bellanger.

L’obtention du précieux sésame permet d’engager l’industrialisation à grande échelle du nouveau moteur. À cet effet, le motoriste français a ouvert quatre lignes de production automatisées en Europe. Deux d’entre elles sont basées à Pickstone, à 100 km de Londres, au Royaume-Uni. Elles sont en charge du «cœur électromagnétique» des moteurs (stators et rotors). Les deux autres sont installées à Niort en France et sont en charge de l’électronique de puissance et l’assemblage final. « La ligne d’assemblage finale sera opérationnelle en 2026 et aura une capacité de 1000 moteurs par an. Elle a été pensée pour être extensible, avec une capacité de production de 4 000 à 5 000 moteurs par an, voire plus en fonction de la demande du marché», explique le président de Safran Electrical & Power. La ligne sera reconfigurable et modulaire : elle pourra assembler indifféremment toutes les versions de la gamme ENGINeUS, notamment le modèle XL plus puissant (750 Kilowatts).

Car le modèle 100 qui a permis à Safran de travailler sur des briques technologiques pour hybrider de nouveaux moteurs, prépare la suite. Il s’inscrit au cœur de la feuille de route décarbonation de Safran. Elle comporte trois piliers : «le premier porte sur l’optimisation des équipements actuels et des moteurs de plus en plus frugaux ; le second sur l’utilisation de carburants d’aviation durable (SAF) et le troisième sur l’hybridation avec des systèmes de génération et de distribution de puissance électriques vers les moteurs thermiques pour les appareils les plus grands ou la propulsion tout électrique, adaptée aux nouvelles mobilités aériennes (NDLR : drones, taxis volants, petits avions)» détaille Bruno Bellanger.

Aura Aero et Volt Aero parmi les clients

Cette certification de l’ENGINeUS 100 ouvre la voie à la certification, la production et à la commercialisation des premiers appareils électriques. Plusieurs acteurs des nouvelles mobilités aériennes ont en effet déjà choisi le moteur ENGINeUS (ou les moteurs-générateurs GENeUS ) notamment les Français Aura Aero et Volt Aero, les Américains Bye Aerospace et Electra, l’autrichien Diamond Aircraft (passé sous pavillon chinois) et le chinois TCab Tech.

Avec la famille ENGINeUS, Safran a décidé de répondre aux besoins de tous les marchés, de la propulsion 100% électrique pour les petits avions de 2 à 4 passagers, à la propulsion hybride distribuée pour les avions de transport régional de 19 passagers, jusqu’à l’hybridation électrique des futures générations de moteurs d’avions commerciaux régionaux. Mais aussi aux marchés des drones civils (livraison notamment) et militaires.

Une concurrence multiforme

Le groupe dirigé par Olivier Andriès a pris de l’avance sur ses concurrents qui n’ont pas adopté la même stratégie. Alors que Safran commence par de petits moteurs lui permettant d’acquérir de l’expérience et d’éprouver des technologies qui monteront à bord de plus gros moteurs, l’américain GE (partenaire de Safran dans CFM International et dans le programme de recherche RISE de moteur ultra-sobre ) a décidé d’entrer sur le marché des moteurs électriques par le haut, en travaillant d’emblée sur des réacteurs puissants. C’est aussi l’option retenue par Pratt & Whitney et Collins, les deux filiales du géant américain RTX. En revanche, le britannique Rolls-Royce a jeté l’éponge, en fermant sa branche dédiée aux moteurs électriques.

D’autres acteurs sont sur les rangs. La Chine, qui veut à terme devenir un grand de l’aéronautique travaille sur le moteur électrique. Des start-up spécialisées sont aussi dans la course telle que l’américaine Magicall. Et plusieurs constructeurs de e-VTOL (appareils électriques à décollage vertical) aussi appelés taxis volants électriques, clients potentiels des motoristes établis, ont décidé de concevoir et de fabriquer leurs moteurs électriques en interne. C’est le choix fait par Joby Aviation, Archer ou encore Wisk (filiale de Boeing), les plus importants spécialistes américains des taxis volants.

ChatGPT operator eyes biggest disruption in tech devices since iPhone

PALO ALTO, California -- After taking the world by storm with ChatGPT, OpenAI is looking to develop an artificial intelligence-specific device -- a move that could bring the largest disruption to tech hardware since the 2007 launch of the iPhone.

"We hope to do it in partnership" with Jony Ive, a former chief design officer for Apple, OpenAI co-founder and CEO Sam Altman told Nikkei on Jan. 27. Altman is visiting Japan and plans to meet with Japanese Prime Minister Shigeru Ishiba on Monday.

OpenAI has not previously announced official plans to develop AI-specific hardware. Altman indicated that it would take several years to unveil a prototype.

"It feels to me like AI is a big enough shift in how we can interact with computers that there ought to be a new kind of hardware," he said.

Altman's journey as an entrepreneur began when he dropped out of Stanford University to start a mobile social media company. He later served as president of Y Combinator, a startup accelerator, and co-founded OpenAI in 2015. He became the full-time CEO in 2019.

The startup's ChatGPT AI chatbot launched in 2022 and has since gained over 300 million users worldwide. OpenAI aims to lead the AI market in both software and hardware with its AI-specific device.

Apple's iPhone revolutionized user interface design with the use of touchscreens. With AI, "I think voice should be a key," Altman said.

When asked whether OpenAI would develop its own semiconductors, Altman said, "We're certainly working on it."

Other U.S. tech companies like Apple, Google and Amazon are also working on custom-made chips to deliver faster and more efficient AI.

On the day after U.S. President Donald Trump's inauguration, OpenAI announced a $500 billion Stargate venture with SoftBank Group and Oracle to develop AI infrastructure on U.S. soil.

OpenAI will be responsible for running the company overseeing Stargate and will build and operate data centers.

"Stargate is a big and complex project that is up and down the stack," Altman said. "I think there's places to collaborate [with Japanese companies and investors] at every level, including chip."

Altman is calling for Japanese companies to participate in Stargate. OpenAI has recently put forward policy recommendations warning the U.S. might fall behind China competitively without drawing AI investment from global partners, such as Japan and Middle East countries.

Chinese startup DeepSeek has developed an AI model it claims rivals OpenAI's model at a fraction of the cost.

DeepSeek's offering is "clearly a good model," said Altman. "It's a reminder of the strong interest in reasoning, and there is going to be serious competition."

"This capability level isn't new," he added. "We've had models at this level for some time and we'll continue to make better models."

OpenAI is looking into whether DeepSeek improperly used its proprietary technology for training.

China has caught up to American AI companies "significantly," Altman said, while warning bad actors could apply advanced AI to military and similar applications.

"If authoritarian governments misuse powerful AI for power consolidation, that would be bad," he said.

The Stargate venture has become a signature project in Trump's presidency. Under former President Joe Biden, the government sought to regulate AI development by setting mandatory safety requirements for powerful AI models, but the Trump administration represents a departure from that trajectory.

The plan is to ease regulatory strictures and encourage investment in AI companies, so the U.S. solidifies global leadership in the field.

"I think it's important for the world to get AI built correctly and be deployed for maximum benefit to everyone," said Altman. "U.S. leadership is helpful to get to that place."

"I was very impressed with the way President Trump thinks about the need to build infrastructure and to move quickly and sensibly on technology policy," he added.

Some have voiced concerns that AI safety would be compromised if the Trump administration eases regulations. Altman mentioned the idea of establishing an international watchdog to monitor AI development processes for potential harm and prevent AI from becoming a threat to humanity.

"When we have these technologies that have truly global potential, mega impact, we have some sort of international framework or plan," said Altman.

The International Atomic Energy Agency is one example.

"I think the same thing makes sense here," said Altman. There is "a lot of talk in the world right now about all of the different approaches, that'll be for the heads of states to decide," he added.

Anglo boss warns Trump tariffs will push up cost of mining for years

Wanblad’s remarks come as a worldwide trade war threatens to upend the flow of commodities

Anglo American chief executive Duncan Wanblad has warned that US President Donald Trump’s wave of new tariffs will push up the cost of mining production for years.

Wanblad’s remarks come as a worldwide trade war threatens to upend the flow of commodities on oil and gas and a range of precious and base metals on which their businesses depend.

Trump’s sabre-rattling sent the stocks of some of the big mining groups lower on Monday with London listed Glencore and Anglo American down more than 2 per cent at the close.

Wanblad warned that Trump’s tariffs on Canada and Mexico and threat to freeze funding to South Africa over a new law that permits expropriation of land in public interest would lead to market volatility and inflation. 

“One thing I’m sure of is that under all circumstances, [tariffs] are going to be inflationary. We are going to see the cost of production go up pretty much everywhere as a result of this,” he said.

It remains unclear whether Trump will stick to his plans, however, as Mexico’s President Claudia Sheinbaum said the tariffs would be suspended for one month after a discussion with the US president. Canada’s Prime Minister Justin Trudeau is also locked in talks with Trump.

The Anglo boss said the near-term impact on mining groups was unclear, depending on the region, the level of the tariff and where the product was bought. “I have no idea what to make of the [Trump] statement, other than we could have all done without it.”

Wanblad’s view on tariffs echoes other mining chief executives, who are all assessing the impact of higher tariffs, particularly on resource-rich Canada, which has reserves of oil and gas and metals such as gold and copper. 

Speaking to the Financial Times in January before the tariffs were announced, William Oplinger, the chief executive of aluminium producer Alcoa, said a tax on Canadian imports would mean “aluminium prices in the US would be substantially higher”. 

“Ultimately it will be in the price of pick-up trucks and beer cans,” he said. “It’s really hard to determine how much demand destruction we’ll see . . . If prices are substantially higher in the US that has to put some downward pressure on aluminium demand.” 

Duncan Hobbs, an analyst at trader Concord Resources, said the impact of the tariffs would be reflected in the premiums paid by metal users on top of the benchmark exchange price for physical metals in the US.

Analysts at BMO said higher premiums were likely to endure until “Canadian producers and US consumers alike can reroute supply chains to avoid the new duties”. 

Practically, that is likely to mean Canadian metals being diverted to Europe and the US importing more from other regions such as Australia, they said.

Such a change would “create longer supply chains which will result in a sustained increase in US premiums”. 

Speaking at the Investing in African Mining Indaba in Cape Town on Monday, South Africa’s mining minister Gwede Mantashe called on African countries to halt mineral exports to the US in retaliation for Trump’s decision to suspend funding aid programmes on the continent. 

“They want to withhold funding, but they still want our minerals,” he said. “Let us withhold minerals. Africa must assert itself.”

Italy makes a meal of bank takeovers

It is hard to escape the feeling that an opportunity for simplification has been missed

Italian financiers rarely opt for a simple plan where a complicated one would do. That shows in a five-way pile-up taking shape between the country’s banks and insurers. It’s a power struggle that offers crumbs to the companies’ regular shareholders.

The tangle looks thus. Large lender UniCredit has bid for Banca Popolare di Milano — derailing a potential merger between BPM and Tuscan lender Monte dei Paschi di Siena. That bank, in turn, launched a hostile bid for Mediobanca, whose key asset is a 13 per cent stake in insurer Generali. And in a weekend colpo di scena, UniCredit unveiled a 4 per cent stake in Generali. 

All of this may sound confusing. It stems, though, from two long-standing — and not especially complex — strategic challenges in Italy’s financial landscape. 

The first is that its banking system remains fragmented, with two larger groups — Intesa and UniCredit — and a number of smaller banks that will need to consolidate. The second is that Generali, one of the country’s prize assets, has not participated in consolidation and lost scale relative to its rivals. Detractors argue Mediobanca’s influence has held it back.

Both of these issues have long needed bringing to the table. The trouble is, it looks like spaghetti is on the menu.

In terms of bank consolidation, the potential combinations on offer help, but only partly. While UniCredit’s bid for BPM does have obvious potential synergies, Monte dei Paschi and Mediobanca is less of a natural combination. There is limited business overlap and the Tuscan lender relies in part on a more rapid use of deferred tax assets to create value.

Over at Generali, meanwhile, the stage has been set for a struggle for control which looks likely to descend into a bunfight, as opposed to a bid with a fulsome control premium.

Much of the frenzy has been sparked by Italian tycoon Francesco Gaetano Caltagirone and Delfin, the Del Vecchio family’s holding company, who have in the past tried and failed to install their own candidates at Generali. 

When the insurer’s shareholders pick a new board next May, the two will have tanks on everyone’s lawn. Together they own a direct 17 per cent stake in Generali. Alongside the Italian government, they are both significant shareholders in Monte dei Paschi, which has Mediobanca’s 13 per cent stake in Generali in its sights. They may be hoping that UniCredit — which now has a chance to play kingmaker — could come down on their side.

There are plenty of questions that arise. Who will own whom when the dust settles? Who will control Generali, and will it be any better as a result? But it is hard to escape the feeling that an opportunity for simplification has been missed. The new world of Italian finance may be just as convoluted as the old.