Voici les résumés des articles de La Lettre du 27 février 2026, en français puis en anglais, dans le format demandé :
FRANÇAIS
LUXE & MÉDIAS
La Lettre - Pour illustrer l'unité familiale des Arnault dans le cadre d'une opération de communication orchestrée par son nouvel impresario Louis Jublin, Hélène Mercier-Arnault a fourni à TF1 une photo officielle retouchée par IA : Bernard Arnault y a été rhabillé d'un costume bleu, son bras repositionné, pour donner l'apparence d'un cliché décontracté. La même photo originale — prise le 12 janvier lors de son intronisation à l'Académie des sciences morales — était parue deux jours plus tard dans Le Figaro, rendant la manipulation évidente. LVMH, TF1 et Hélène Mercier-Arnault n'ont pas souhaité commenter.
POLITIQUE
La Lettre - Emmanuel Grégoire, candidat PS à la mairie de Paris, mène une campagne large rassemblant communistes, écologistes et Place publique dès le premier tour pour contrer la fragmentation de la gauche face à LFI. Son QG est coordonné par deux proches de confiance — Paul Tirot et Lily Munson — entourés d'une vingtaine de collaborateurs issus de Publicis, du SIG ou de la haute fonction publique. En tête des sondages au premier tour, il reste vulnérable face à la droite au second tour si LFI se maintient.
La Lettre - La Canadienne Paula Folkes, spécialiste des achats d'armements américains, prendra le 1er septembre la direction de l'Agence OTAN de soutien et d'acquisition (NSPA), succédant à l'Américaine Stacy Cummings. Cette nomination illustre la volonté de Washington de conserver la main sur l'agence, dont les industriels américains captent un tiers des 10 milliards d'euros de contrats annuels, alors même que les États-Unis annoncent leur retrait militaire partiel d'Europe. La NSPA reste marquée par des affaires de corruption systémiques que Paula Folkes devra traiter en urgence.
La Lettre - La Direction générale de la santé (DGS) a préparé un non-paper adressé ce vendredi 27 février à la Commission européenne, pour s'opposer à la suppression des subventions de fonctionnement accordées aux ONG de santé publique via le programme EU4Health. Huit pays ont cosigné le document, dont l'Espagne, la Belgique et le Luxembourg. La coupe, estimée à 9 millions d'euros pour 2024, ne remet pas en cause les subventions projets, mais fragilise les structures associatives comme France Assos Santé et le Forum européen des patients.
DÉFENSE & ENTREPRISES
La Lettre - Le projet de pôle défense d'Atos est suspendu pour cause d'obstacle juridique : la double holding néerlandaise créée fin 2024 pour satisfaire ses créanciers empêche le transfert de certaines activités militaires vers sa filiale Avantix. Environ 165 salariés — issus d'Eviden France et de la cybersécurité Trustway — sont en attente de leur transfert juridique. Le pôle concentre des contrats hautement sensibles (Rafale, Scorpion, systèmes d'écoute), et la DGA, principale cliente, presse pour disposer d'un interlocuteur unique d'ici l'été.
MÉDIAS
La Lettre - LVMH a proposé aux journalistes de Challenges, Sciences et Avenir et La Recherche une clause de cession bonifiée (deux mois de salaire par année d'ancienneté, contre un mois initialement) pour encourager les départs volontaires avant le 30 avril. Dans un groupe où l'ancienneté moyenne atteint douze ans, ce dispositif est perçu en interne comme un plan de départ déguisé. La direction envisage par ailleurs de céder les titres scientifiques si les économies s'avèrent insuffisantes. Les négociations avec la Société des journalistes ont échoué en février, avec 84,5 % des salariés ayant voté une motion de défiance.
ENGLISH
LUXURY & MEDIA
La Lettre - As part of a PR campaign orchestrated by her new publicist Louis Jublin, Hélène Mercier-Arnault provided TF1 with an AI-retouched official photograph designed to project family unity among the Arnaults: Bernard Arnault was digitally re-dressed in a blue suit matching his sons', and his arm was repositioned to suggest a relaxed family pose. The original photo — taken on January 12th at his induction into the Académie des sciences morales et politiques — had already appeared two days later in Le Figaro, making the manipulation easily traceable. LVMH, TF1, and Hélène Mercier-Arnault all declined to comment.
POLITICS
La Lettre - Socialist candidate Emmanuel Grégoire is running a broad left-wing coalition for the Paris mayoral race, uniting communists, ecologists and Place publique behind his name from the first round to counter the fragmentation risk posed by LFI. His campaign HQ is run by two trusted lieutenants — Paul Tirot and Lily Munson — backed by around twenty staffers drawn from Publicis, the government information service and senior civil service ranks. Leading first-round polls, he remains vulnerable in a potential run-off against the right if LFI stays in the race.
La Lettre - Canadian official Paula Folkes, a specialist in US arms procurement, will take over as head of NATO's Support and Procurement Agency (NSPA) on September 1st, replacing American incumbent Stacy Cummings. The appointment signals Washington's intent to retain control over the agency — whose contracts, worth €10 billion annually, flow largely to American defence firms — even as the US announces a partial military withdrawal from Europe. Folkes will inherit an agency mired in systemic corruption scandals that her predecessor failed to address.
La Lettre - France's General Directorate of Health (DGS) has prepared an informal note to be sent to the European Commission on February 27th, opposing the planned elimination of operating grants to public health NGOs under the EU4Health programme. Eight countries have co-signed the document, including Spain, Belgium and Luxembourg. The cuts — estimated at €9 million for 2024 — would not affect project-based funding but would structurally weaken health civil society organisations such as France Assos Santé and the European Patients Forum.
DEFENCE & BUSINESS
La Lettre - Atos's plan to consolidate its defence activities into a single subsidiary, Avantix, has been put on hold due to an unexpected legal obstacle: a Dutch double-holding structure imposed by creditors in late 2024 is blocking the transfer of certain military contracts into the new entity. Around 165 employees from Eviden France and cybersecurity firm Trustway are in legal limbo. The unit handles highly sensitive programmes including Rafale communications, the Scorpion combat system and intelligence interception technology. The DGA is pressing for a single defence interlocutor by summer.
La Lettre - LVMH has offered journalists at Challenges, Sciences et Avenir and La Recherche an enhanced voluntary redundancy package — two months' salary per year of service, up from one — to encourage departures before April 30th. In a newsroom where average seniority stands at twelve years, staff have widely interpreted this as a disguised mass layoff plan. Management has also warned it may sell the science titles if savings targets are not met. Negotiations with the journalists' society broke down in February, with 84.5% of staff voting a motion of no confidence in the new direction.
>>> Up
* Ambarella Raised to Buy at Summit Insights
* Aixtron PT Raised to 31 euros from 25.20 euros at JPMorgan
* Marriott Vacations PT Raised to $80 from $64 at Barclays
* Nestle PT Raised to 99 Swiss francs at Berenberg
* Nexstim Raised to Accumulate at Inderes; PT 11.50 euros
* QT Group Raised to Buy at Inderes; PT 32 euros
* QT Group Raised to Buy at Inderes; PT 32 euros
* Warner Bros Discovery PT Raised to $26 from $22 at TD Cowen
>>> Down
>>> Down
* Iberdrola Cut to Neutral at Goldman; PT 20.50 euros
* Lindt & Spruengli Cut to Sell at Berenberg
* Redeia Cut to Underperform at Mediobanca SpA; PT 15 euros
* Sandoz Group Cut to Underweight at Morgan Stanley
* Sandoz Group Cut to Hold at Deutsche Bank; PT 70 Swiss francs
* Segro Cut to Neutral at Goldman; PT 890 pence
* Swisscom Cut to Neutral at UBS; PT 735 Swiss francs
* Swisscom Cut to Neutral at UBS; PT 735 Swiss francs
* Warner Bros Discovery Cut to Underperform at Raymond James
>>> Initiation
>>> Initiation
* CSG Rated New Buy at Berenberg; PT 35 euros
* Magnum Ice Cream Rated New Hold at Berenberg; PT 14.60 euros
* OXB Reinstated Outperform at RBC; PT 1,170 pence
* Palantir Rated New Buy at Rosenblatt Securities Inc
>>> Call
* Palantir Rated New Buy at Rosenblatt Securities Inc
>>> Call
Asian stocks were on track for their best February on record as investors piled into the region’s companies supplying the artificial intelligence infrastructure build-out. The yen strengthened on inflation data. The MSCI Asia Pacific Index has gained 6.9% this month, making it the best February performance since the inception of the index in 1998. The gauge — up 0.2% on Friday — is also poised to outperform the S&P 500 Index for a third consecutive month. Equity-index futures indicated Wall Street benchmarks were set to slip on Friday. South Korea — a bellwether for AI investments — was the standout performer in Asia, with the Kospi Index gaining about 20% this month. It’s the world’s best-performing gauge this year after a 49% surge year-to-date. Asian equities have outpaced European and US benchmarks as investors flocked to companies underpinning the expansion of AI infrastructure, viewing the region’s firms as the “picks and shovels” of the supply chain. By contrast, the disruptive potential of the new technology has roiled stocks across sectors for weeks in the US, in what’s become known as the “AI scare trade.” Global asset managers who collectively oversee more than $20 trillion of assets have grown more bullish across emerging-market equities, currencies, domestic bonds and credit, potentially offering fresh momentum to the sector’s record-busting rally. Eastspring Investments Asian Equity Portfolio Specialist Ken Wong speaks on Bloomberg TV about bright spots for investors seeking growth in key Asian markets including South Korea, Taiwan and India. Citigroup Inc., which reviewed the published outlooks of some of the world’s biggest asset managers, found that funds had added to long positions in markets across Asia, Latin America, as well as Europe, the Middle East and Africa. The findings came as MSCI’s main emerging equity index also traded close to record highs. In other corners of the market, Treasuries held their gains with the yield on the 10-year holding at 4%. At one point during the US session, the yield touched its lowest this year. The US is becoming ever more dependent on its closest allies to fund its swollen debt burden, exposing a vulnerability in the $30 trillion Treasuries market. Countries that are aligned with Washington bought $463.9 billion of Treasuries in 2025, the biggest annual net purchase since at least 2016, according to Bloomberg’s analysis of US Treasury data. By contrast, the figures showed that countries least united with the US offloaded $125.24 billion of American debt last year, the most in six years. In commodities, oil steadied after the US and Iran agreed to more nuclear talks next week following a round of discussions on Thursday, as a huge deployment of American forces in the Middle East kept the market on edge. Also, gold was poised to close out its longest run of monthly gains since 1973, with February’s 6%-plus climb set to be the seventh on the trot. Meanwhile, the yen strengthened against the dollar after inflation in Tokyo — a barometer for broader Japan — eased less than expected. The dollar consolidated amid month-end flows. Among other movers in Asia, attention was on the technology shares, with the region’s IT index dropping 0.8%. That came after a drop in Wall Street benchmarks, as sentiment was weighed down by a muted reaction to Nvidia Corp.’s earnings. The sober response to Nvidia, which included beats on revenue, net income and guidance, was partly because investors now expect such outperformance, according to Hardika Singh at Fundstrat Global Advisors. US After Hours XYZ +22.9%, AAOI +17.2%, DELL +10.3% higher on earnings; NFLX +10.6% and PSKY +5.3% higher as NFLX declines to match PSKY higher offer; DUOL -21.4%, ZS -9.6%, ESTC -9%, CRWV -8.6%, FLUT -8.6% lower on earnings.
Nikkei +0.10% Hang Seng +0.75% CSI -0.71% Shanghai -0.17% Shenzen -0.33%
Eur$ 1.1811 CNH 6.8502 CNY 6.8552 JPY 155.58 GBP 1.3498 CHF 0.7726 RUB 76.7331 TRY 43.9594 WTI$ 65.34 +0.20% Gold 5,184 -0.02% BTC 67,820 +0.40% ETH 2,048 +0.60%
S&P -0.30% Nasdaq -0.24% EuroStoxx +0.02% FTSE +0.27% Dax -0.05% SMI
Macro :
- Iran Says US Nuclear Talks So Far ‘Very Intense and Serious’
- Hedge Fund Millennium Hires Goldman’s Hoxha for CIO Office
- YOLO Traders Rush to Buy Dip in Beaten-Down Software Stocks
- China’s Carmakers Cede Ground in Europe After Surging in 2025
- Airstrikes hit Afghan capital of Kabul, hours after Afghanistan attacks Pakistan
Keep an eye on :
Keep an eye on :
- ANA SM : Acciona FY Net Income Beats Estimates
- ANE SM : Acciona Energia FY Net Income Misses Estimates
- ACX SM : Acerinox 4Q Ebitda Misses Estimates
- ACKB BB : Ackermans FY Net Income Beats Estimates
- AMS SM : Amadeus 4Q Adjusted Profit Beats Estimates
- AMZN US : Jeff Bezos’s $30bn AI lab seeking tens of billions for industrial sector deals - FT
- AMBA US : Ambarella 1Q Revenue Forecast Beats Estimates
- ASML NA : ASML Says Next-Gen Tools Ready to Mass-Produce Chips: Reuters
- AVIO IM : Glass Lewis Backs Avio Governance Changes
- AZE BB : EQT to Receive €173m From Exit of Stake in Azelis Group
- Barnes & Noble IPO : Barnes & Noble Owner Elliott Is Said to Seek London IPO Pitches
- BAS GY : BASF Eyes More Cost Cuts as Chemicals Headwinds Continue in 2026
- BIM FP : BioMerieux Sees 2026 Organic Sales +5% to +7%
- BOBN SW : Bobst FY Sales CHF1.62B Vs. CHF1.89B Y/y
- IAG LN : IAG Plans €448 Million Dividend, €1.5 Billion Share Buyback
- BWO NO : BW Offshore 4Q Ebitda Misses Estimates; Revenue Beats
- CO FP : Casino Gets Extension on Term Loan B, RCF, Quatrim Debt
- CLNX SM : Cellnex Telecom 2025 Operating Profit €476m vs €197m in 2024
- CTY1S FH : Citycon 4Q EPRA EPS EU0.10
- CLARI FP : Clariane FY Revenue Misses Estimates
- COL SM : Colonial SFL Socimi FY Net Income Misses Estimates
- DELL US : Dell Technologies 2027 Rev. Forecast Beats Estimates
- DHL GY : DHL, JD.com Sign MoU Focused on Logistics Innovation, E-Commerce
- DOV IM : doValue FY Gross Rev. EU580.4M Vs. EU482.1M Y/y
- DOV IM : doValue FY Gross Rev. EU580.4M Vs. EU482.1M Y/y
- DKNG US : DraftKings Gets License To Launch Online Sportsbook in Arkansas
- ENGI FP : Engie Preps Paris’s Biggest New Share Sale in Decades
- EQT SS : EQT to Receive €173m From Exit of Stake in Azelis Group
- FAGR BB : Fagron Acquires Pharmavit Europe for About €68m
- FLUT US : Flutter Shares Fall as 2026 US Revenue Guide Misses Estimate
- FUR NA : Fugro 4Q Adjusted Ebitda Misses Estimates
- GOOGL US : Google Introduces AI-Powered Features in Google Translate
- GOOGL US : Google Strikes Multibillion-Dollar AI Chip Deal With Meta, Sharpening Nvidia Rivalry - The Information
- GRF SM : Grifols 4Q Net Revenue Beats Estimates
- GSBD US : Goldman Sachs BDC 4Q Total Investment Income Meets Estimates
- GUBRA DC : Gubra FY Revenue Meets Estimates
- HOLN SW : Holcim Sees 2026 Organic Recurring Ebit +8% to +10%
- INGA NA : ING Seeks to Boost CEO Pay After Finding Widening Gap With Peers
- SKB GY : Koenig & Bauer Prelim FY Revenue Matches Estimates
- FII FP : LISI FY Ebitda Misses Estimates
- MARA US : MARA Rises on Starwood AI Data Center Deal Amid 4Q Miss
- MRL SM : Merlin Properties FY FFO Beats Estimates
- META US : 2 founding members of Mira Murati's Thinking Machines Lab quietly left for Meta
- META US : Meta’s Internal Chip Design Efforts Hit Roadblocks - The Information
- BMPS IM : Paschi Sees 100% Div Payout Through 2030 After Mediobanca Deal
- NFLX US : Netflix Declines to Raise Offer for Warner Bros.*NETFLIX SHARES EXTEND GAIN TO 13% IN POSTMARKET TRADING
- NVDA US : Google Strikes Multibillion-Dollar AI Chip Deal With Meta, Sharpening Nvidia Rivalry - The Information
- OpenAI IPO : OpenAI Builds an M&A War Chest - The Information
- PSKY US : *PARAMOUNT SKYDANCE SHARES GAIN 4%
- PROX BB : Proximus 4Q Adjusted Revenue Misses Estimates
- RECT BB : Recticel FY Net Sales Meet Estimates
- RBREW DC : Royal Unibrew Sees 2026 Organic Ebit +6% to +10%
- SAP GY : SAP’s New Bonus System Ended Up Rewarding Underperforming Bosses
- SGO FP : Saint-Gobain Sees 2026 Operating Margin Above 15%, Saint-Gobain ADRs Fall as 4Q Sales Miss Estimates
- SCYR SM : Sacyr FY Net Income Beats Estimates
- SWTQ SW : Schweiter FY Ebitda Misses Estimates
- SMCP FP : SMCP FY Adjusted Ebitda Meets Estimates
- SpaceX IPO : xAI Founding Member Toby Pohlen Says He Is Leaving Company
- STWD US : Starwood Property Announces $400m Share Buyback
- STLAM IM : China’s Carmakers Cede Ground in Europe After Surging in 2025
- SREN SW : Swiss Re FY Net Income $4.76B
- TEF SM : Telefonica Chile’s New Owner Makes ‘Mass’ Layoffs: La Tercera
- TEP FP : Teleperformance Replaces CEOs With McKinsey AI Consultant
- TLW LN : Tullow Oil In Lock-Up Pact With Holders of Over 90% of ‘26 Notes
- FR FP : Valeo Sees 2026 Free Cash Flow Above EU400M, Est. EU460.2M
- FR FP : Valeo’s Free Cash Flow Outlook Beats Expectations: Street Wrap
- VIS SM : Viscofan 4Q Ebitda Misses Estimates
- VOW GY : China’s Carmakers Cede Ground in Europe After Surging in 2025
- VU FP : Vusion FY Ebitda Beats Estimates
- VZN SW : VZ Holding FY Operating Revenue CHF574.5M Vs. CHF525.1M Y/y
- WIZZ LN : Wizz Air Holder Indigo Partners Offers About 10m Shares
DAX:
- Heidelberg Materials (HEI TH) +1.3%
- BASF (BAS TH) -2.3%
- BASF 2026 Adjusted Ebitda Forecast Misses Estimates
MDAX:
- Freenet (FNTN TH) +2%
- Puma (PUM TH) -1.5%
- IONOS Group SE (IOS TH) -1.5%
- Delivery Hero (DHER TH) -3.6%
- Delivery Hero 4Q Gross Merchandise Value Misses Estimates
SDAX:
- Heidelberger Druck (HDD TH) +1.6%
- Verve Group (VRV TH) +1.3%
- Verbio SE (VBK TH) +1.1%
- Borussia Dortmund (BVB TH) +1%
- Gerresheimer (GXI TH) -1%
- Alzchem Group AG (ACT TH) -1.8%
Jeff Bezos’s $30bn AI lab seeking tens of billions for industrial sector deals
Project Prometheus in new talks with Abu Dhabi and JPMorgan over vehicle to buy up businesses disrupted by the technology
Jeff Bezos’ AI lab is raising tens of billions of dollars to acquire companies hit by the technology, seeking to capitalise on the disruption that the Amazon founder anticipates will reshape the industrial sector.
Project Prometheus, a code name for a new company led by the tech billionaire and former Google executive Vikram Bajaj, raised $6.2bn late last year.
The funding valued the business at about $30bn, not including the new investment, according to two people with knowledge of that deal.
The financing, from investors including Robert Nelsen, founder of Seattle-based ARCH Venture Partners, supports Prometheus’ bid to use AI to transform manufacturing and industry, according to people familiar with the matter.
The group is separately in new funding talks for a holding company that would invest in groups that Bezos and Bajaj anticipate will be hit by its technology.
According to two people with knowledge of the plans, the new holding company would serve as a “manufacturing transformation vehicle”, with tens of billions at its disposal to acquire businesses.
Venture investors, including Thrive Capital and General Catalyst, have launched vehicles to buy businesses in industries disrupted by AI, hoping they can use technology to improve the margins of these traditional companies. But the scale of Bezos’ plans dwarfs those efforts.
Prometheus is in early discussions with a number of big sovereign wealth funds, including the Abu Dhabi Investment Authority, about investing in the holding company.
Bezos was also talking to JPMorgan chief Jamie Dimon about investing, according to those with knowledge of the talks. That investment would come through the bank’s $10bn fund for its Security and Resiliency Initiative, which aims to reinforce American supply chains in critical industries. Bezos is an advisor to the initiative.
Prometheus aims to build novel AI systems that go beyond large language models, with the ability to map the real world and understand design and engineering.
It is targeting the complex manufacturing processes behind objects ranging from jet engines to computer chips, aiming to make these far quicker and less resource-intensive.
The company has acquired data from these industries to begin training its AI systems.
Bezos is co-chief executive, his first management role since stepping down as Amazon’s chief executive in 2021, and is active in day-to-day operations, according to people familiar with the matter.
However, it is also steered by Bajaj and a set of founding team members, including Christian Bodnar and Nal Kalchbrenner, former Microsoft and Google DeepMind research scientists.
It has recruited more than 100 employees, including staff from OpenAI, Google’s DeepMind and Meta, whose technical expertise spans LLMs, computer vision, weather forecasting and optimising advanced computer chips for physics simulations. Prometheus is based in San Francisco with offices in London and Zurich.
Prometheus acquired General Agents in June, the start-up behind Ace, a tool that can search the web and take actions on behalf of users. It also hired the start-up’s founders Sherjil Ozair and William Guss, ex-DeepMind and OpenAI researchers.
The AI lab has also been recruiting engineers near New Delhi to create accurate 3D models of components used to make equipment such as engines, according to people familiar with the company’s plans.
Fei-Fei Li’s World Labs and Yann LeCun’s AMI Labs are developing so-called world models, which use videos to understand the real world. Prometheus was also working on an AI system to navigate the physical world, but its systems are distinct from world models, according to those with knowledge of its plans.
“Figuring out how to reinvent the physical world is a big challenge,” ARCH’s Nelsen, a Prometheus director, told an audience at JPMorgan’s healthcare summit last month. “[But] the pace of innovation in AI right now is truly hard to understate.”
Nelsen added that he believed Prometheus would be “one of the most important companies in the world”.
Prometheus, JPMorgan and ADIA declined to comment.
Power failure could undermine America’s AI ambitions
Spiralling electricity demand threatens to hold the US back in its technological race with China
What might halt America’s artificial intelligence boom? There are many potential candidates. One is swelling anti-tech populism: a new survey shows 58 per cent of Americans do not trust AI.
Excess leverage is another: AI-linked firms are not just gobbling up oodles of private credit but plan to issue a record $450bn in bonds this year, according to the Institute of International Finance. A third risk is that cheaper, better forms of AI will usurp the costly, proprietary large language models beloved of Silicon Valley.
But there is also a fourth, more humdrum issue: electricity. If the AI boom keeps accelerating, global electricity demand for data centres is projected to double by 2030, with even bigger jumps in the US and China.
Beijing has already prepared by installing an eye-popping 1,500 gigawatts of new energy capacity since 2021, taking its total to 3,891GW. However, the US has not: its installed capacity has barely risen in recent years, and now sits around 1,373GW — or less than what China added in just four years.
This is shocking. Worse, China will add over 3.4 terawatts of electricity-generation capacity in the next five years, according to Bloomberg — six times as much as the US.
Unsurprisingly, the American tech sector is alarmed. Jensen Huang, head of Nvidia, for example, told the FT last year that China could “win the AI race” with the US because its “power is free”. Elon Musk says that “based on current trends, China will far exceed the rest of the world in AI compute” because it will have three times America’s electricity output by late 2026.
And OpenAI has called for government action. “The US leads the world in developing AI [but] keeping that edge requires far more electricity than the US can currently provide,” it declared in a memo last year. “Electrons are the new oil.” (Which is ironic given that data was previously hailed by techies as the “new oil”.)
But whether President Donald Trump can — or will — act is unclear. On Tuesday he declared in his State of the Union address that “we’re telling the major tech companies that they have the obligation to provide for their own power needs” so that “no one’s prices [as a consumer] will go up”. Next week he will apparently flesh that out in a White House meeting with Big Tech executives.
But don’t expect him to wave a magic wand. It will be hard to shield voters from a looming energy squeeze, even if Trump does bully the tech companies into building their own generators. To cite one issue: since many data centres use diesel generators as a backup, “price increases of 20 to 50 per cent could be expected in the tight global diesel market” soon, according to Philip Verleger, an energy economist.
Another enormous problem is electricity transmission. China has raced to build high-voltage lines in recent years. But America has not. This cannot be fixed by the private sector or states without federal action because lines typically cross state borders. However, there has hitherto been very little done — either by Democratic or Republican presidents. “In 2008, a new [transmission] project typically had to wait less than two years to get connected. But by 2024, it was over 4.5 years,” notes Heather Boushey, former economic adviser in the Biden White House.
Worse still, Trump is waging ideological war on renewable energy. Yes, China is using fossil fuels to expand its grid (including, lamentably, coal). But as Kyle Chan, an energy expert at Brookings, notes: “Over half of China’s [recent] electricity growth during [the last decade] has come from clean energy sources, such as wind, solar and hydropower.” These are fast and cheap to install — even before noting the climate change benefits.
But Trump’s “drill, baby, drill” mantra makes him reluctant to embrace renewables even as a complementary power source, let alone as a replacement for fossil fuels. Indeed last summer the energy department terminated a planned $4.9bn loan guarantee for an 800-mile “Grain Belt Express” power line intended to take wind power from Kansas to Illinois and Indiana. This is mad.
So can America close the gap with China? Some White House officials tell me it can, by using federal powers to install transmission lines and forcing Big Tech to pay for huge energy investments.
David Victor, a professor at UC San Diego, thinks more innovation will also help. “The really big [future] story in energy will be energy-saving innovation for the chips,” he says. “Many of the scenarios for rapacious energy growth for data centres are quite frothy [since] many of these projects will not be needed, especially if the AI bubble bursts.”
One hopes so. But unless — or until — this occurs, the saga will be yet more evidence of why joined-up, proactive, pragmatic policies can outperform a governance system plagued by polarisation and excess financialisation. Future US historians may well weep. But right now, tech investors should ponder the grubby real-world problems of power — in both a political and literal sense.
Ineos puts a new industrial spin on a morbid financial game
Chemicals is a crowded space; forging ahead in the hope of driving out weaker peers looks like a leveraged bet
Among finance’s more cold-blooded inventions is the tontine: a 17th-century contract in which several people pool their money or assets, and everything goes to the last survivor. Occasionally it reappears in modern markets — financier Bill Ackman tried out a version a few years ago. Today, it could describe the strategy of UK chemical conglomerate Ineos.
The company led by Sir Jim Ratcliffe is in the early stages of its metaphorical tontine: chemicals is a crowded space. Since 2018, global capacity growth has consistently outpaced demand, and projections through 2030 suggest the industry is still not done building, according to commodity data provider ICIS. In high-cost Europe, average utilisation rates have fallen to 74 per cent, says industry body Cefic.
One response would be for everyone to retrench and wait for better days. That’s what Ratcliffe’s peers are doing. More than 5mn metric tonnes per year of European ethylene capacity, or a fifth of the region’s capacity, is expected to close, according to S&P Global. Out of 51 crackers in Europe, 16 are either for sale, closing or are idled since 2020, says ICIS.
Of course, a tontine player always has another temptation: to push their rivals down the stairs. In industrial terms, that means forging ahead in the hope of driving out weaker peers. This is risky because Ratcliffe’s companies are indebted. Ineos Group Holdings and Ineos Quattro are lossmaking and have more than €17bn in net debt. Their bonds are nosing into distressed territory.
Yet there are reasons his gamble might work. First, Ineos is a relatively low-cost producer. It has, for years, imported cheaper feedstock from the US into its European plants. Its new “Project One” cracker will also be significantly less energy intensive than older assets.
Second, Ineos — being one of the world’s largest chemical companies and the employer of 24,500 people — is good at throwing its weight around with governments. In December, the UK agreed to a £125mn loan guarantee-and-grant package for the Grangemouth complex in Scotland. The French government chipped in €300mn for its Lavéra plant. Such support is helpful to Ratcliffe in tough times.
Ratcliffe’s punt depends on his ability to convince his creditors to be patient, and trust that his strategy will work. His first debts are due at the Quattro unit in January 2027. Lenders may be willing to amend and extend: if Ineos’ strategy does pay off, and its ebitda returns to 2022 levels, leverage at its Ineos Group Holdings will halve from the current 8.9 times ebitda.
This is, without question, a leveraged bet. But that is consistent with the career of Ratcliffe, who built Ineos by taking a risk on unloved assets, backed by high-yield debt, and turning them around. His biggest wager yet is that Europe’s chemical industry is headed for a tontine, and that Ineos will be the last participant standing.
Private equity’s problems explained in one blow-up
Business development company FSK’s latest filings offer a look at unravelling buyout deals
The small fund and private equity’s $4tn problem
What do veterinary clinics, dental offices, language translation services, customer service chatbots and software used to handle turnstiles for the New York City subway have in common?
These businesses collectively received billions of dollars in investment over the past decade as part of a record boom in private equity dealmaking. But now, as they collect dust in the portfolios of large buyout shops and private credit firms, many are unravelling.
On Thursday, a public credit fund that lent to these types of private equity deals plunged amid mounting financial distress across its portfolio of private equity loans, DD’s Antoine Gara reports.
The fund offers a window into a private equity industry suffering from a vicious hangover.
PE firms, during an era defined by rock-bottom interest rates, went on a deal binge. The pressure to deploy money was so great that firms chased sky-high valuations and conjured ever more cookie-cutter ideas to put growing stockpiles of investor cash to work.
An industry that had once owned corporate icons such as Hilton, Continental Airlines and Broadcom turned its attention to obscure software companies and unglamorous roll-ups of car washes and insurance brokerages.
Many of these deals have limped along for years but a long-awaited reckoning has surfaced at niche publicly listed lending vehicles called “business development companies”.
FS KKR Capital Corporation, a BDC managed by KKR, exemplifies the trend. On Thursday it reported large losses on some of its loans and watched its shares fall 15 per cent after saying it would slash its dividend.
FSK’s portfolio is characteristic of the older private equity deals that are now having their comeuppances.
The BDC wrote down the value of Cubic Corporation, which manages tap-to-pay technology for the New York City subway system and is owned by private equity group Veritas Capital and an affiliate of hedge fund Elliott Management.
Other writedowns included AmeriVet, a network of more than 100 vet hospitals acquired in 2022 by AEA Investors, a PE firm founded with backing from the Rockefeller, Mellon and Harriman families, and a roll-up of dental offices.
The most prominent was the further markdown of Medallia, a customer service software company acquired by Thoma Bravo for $6.4bn in 2022. BDCs reporting earnings this week slashed the value of their Medallia loans to below 80 cents on the dollar.
The deal was part of a surge in software takeovers struck by Thoma and others in 2021 and 2022 that won financing because of groups’ massive equity investments. Thoma ploughed about $5bn of investor equity into the deal.
Blackstone, which also lent Medallia money, said it had appraised the software company’s enterprise value lower by 70 per cent, valuing its loans at a steep discount of 78 cents on the dollar. That implies that Thoma’s equity investment has mostly evaporated.
DD readers are familiar by now with the troubles percolating the private capital ecosystem.
Funds managed by Blue Owl have triggered broader fears that private credit lenders are vulnerable to the software sell-off and flighty investors. A golden age of software returns also faces the existential threat of AI.
But what about all of those grittier PE deals, like roll-ups of janitorial service companies, waste disposal networks, or local HVAC and plumbing operations? They don’t look too hot either.