TheChek News Flow

The city’s many attractions — plus being cheaper than the capital to rent or buy a home — are overcoming its gritty reputation

Once a week, Florian Tiennot, 31, who moved to Marseille in 2021 after nine years in Paris, makes the journey back to the capital for a day in the office for his job as a sound engineer.

It is an eight-hour round trip door to door, thanks to the TGV that connects the two cities. But it is worth the slog, he says. “Paris had become more and more expensive; here the living is so much cheaper and you have the sun, the sea and the chilled-out lifestyle. The surrounding countryside is stunning and I love to ski — in the winter I’m on the slopes in two hours,” he says.

Then there is the cost of housing. In January, Tiennot bought an 82 sq m home in the city for €337,000. “In Paris, where I was living on the Canal Saint-Martin [a fashionable district spanning the 10th and 11th arrondissements], I’d have paid double,” he says.

Combined with Marseille’s Mediterranean location and manageable size, savings like these have seen a sharp influx of those moving from Paris in recent years seeking homes to buy or rent.

“It has been growing in popularity among those from Paris for about a decade but since the start of the pandemic it has really accelerated,” says Marie-Christine Steffanetti of local agent Barnes Marseille. 

Many from Paris choose Vauban — a neighbourhood now so thick with Parisians, says Tiennot, that he refused to consider it in his home search, preferring a more authentic Marseille experience.

Less than 2km from the sea, the area’s steep narrow streets, lined with a range of apartments and varying sized town houses with distinctive colourful facades, command excellent sea views. Besides the draw of the Catholic Basilique Notre-Dame de la Garde, the city’s most recognisable symbol known locally as “La Bonne Mère”, Vauban is well stocked with a range of independent shops, many specialising in local produce, as well as a range of restaurants and bars.

Océane Lunven, 27, who grew up in the city and has lived in Vauban since 2015, has seen it change considerably in recent years.

“Before the pandemic there were basically three bars you wanted to be in, and you were always hanging out with the same people,” she says. “Today, bars and restaurants are opening all the time. Sometimes I haven’t even heard about them and it’s someone [newly arrived] from Paris who is telling me there’s a new restaurant I should visit.”

Marseille’s growing popularity has resulted in rising prices. Average list prices increased 34 per cent between September 2019 and September 2023, according to Meilleurs Agents.

Rent controls mean that Lunven’s €680 per month rent for the two-bedroom flat, located near La Bonne Mère, has not changed since she moved in with her mother in 2015. But citywide, rents have increased by 12 per cent since 2019, and are up 5 per cent in the last year, according to Meilleurs Agents.

“If I had to move out there’s no way I could stay in the area,” she says.

The city’s growing appeal is in part due to a programme of urban regeneration — much of which dates from about 2013, when the city was named a European Capital of Culture — that has aimed to clean up France’s second most populous city, long associated with high crime rates and urban decay.

Euroméditerranée, a €7bn redevelopment begun in 1995 and located between the Old Port, the commercial harbour and the TGV station, has created 200,000 sq m of public space, 37,000 jobs and 18,000 new homes, according to its website.

Local highlights include the Villa Méditerranée, a public space and gallery complex that since last June has admitted visitors to the Cosquer Méditerranée, a new museum featuring a replica of a 30,000-year-old cave near Marseille famous for its prehistoric rock art.

Next door is the Museum of Civilisations of Europe and the Mediterranean, or MuCEM. Opened in 2013, its cube-shaped main building is an imposing mass with an elegant concrete latticework facade and a striking pedestrian walkway connecting the museum to the adjacent Fort Saint-Jean.

Anastasia Cabrit, who lives in Castellane, a popular residential neighbourhood immediately to the east of Vauban, is a regular visitor to the museum and its surrounds. “There are great exhibitions there and I love the rooftop, there right by the sea. I can spend hours just walking around — and from my house I can get there on my bike in 20 minutes,” she says.

Cabrit moved from Paris with her housemate Anaïs in 2022; they rent their two-bedroom flat for €1,200 a month. It is larger and more centrally located than the home they left in Paris, which cost €1,600 a month. Currently, the average rental listing in Marseille is €16 per sq m per month, compared with €31 per sq m in Paris, according to Meilleurs Agents.

Despite cultural assets such as MuCEM, Marseille’s coastal location, including a long shoreline, several beaches and its easy access to the beauty of the surrounding countryside, lie at the heart of its appeal for most arriving from Paris.

“The beach is a 30-minute walk. Yesterday I went for a run and swam in the sea,” says Anaïs, 29, who declined to give her surname. She is currently looking to buy a one-bedroom flat in neighbouring Vauban, with a budget of €250,000. “I grew up by a lake with the mountains and nature; I couldn’t stand the long winter in Paris and wanted to live in a city surrounded by nature.”

Marseille’s small size means many neighbourhoods are within easy reach of the seafront or one of the city’s beaches. These include the 8th arrondissement, which begins at the foot of the city’s famous Corniche du Président John Fitzgerald Kennedy, a 3km-long arterial route and promenade along the seafront. Thanks to the area’s large villas, sea views and parks, combined with its cultural attractions — including the 18th-century Château Borély, housing the city’s Museum of Decorative Arts, Earthenware and Fashion — it contains many of the city’s most expensive homes.

The area also contains the Le Corbusier-designed Cité Radieuse, a nine-storey concrete Modernist apartment block, its distinctive front a patchwork of red, yellow, green and blue angular walls. The development, a Unesco World Heritage site, is part of the architect’s experiment in collective housing and has a bookshop, publishing house and primary school on the roof. Sales of the 337 apartments, which feature 23 different designs, rarely make it to market, says Steffanetti — instead being traded by word of mouth between locals.

For Cabrit and Anaïs, Marseille’s lower living costs have helped them step away from a Paris lifestyle dominated by the office and partying. “In Paris all life turns around your work and you go out a lot; everything you do means spending money,” says Anaïs.

But crime remains a problem for the city. To address it, President Emmanuel Macron pledged to invest about €1.5bn on improvements including better transport, policing, schools and hospitals in 2021. But Marseille still has the highest rate of vandalism of France’s 10 largest cities, with 12 offences committed per 1,000 residents last year.

Before she moved to Vauban, Lunven lived behind the city’s opera house in the Old Port for five years. In that time she learnt of three shootings on or near her street and several people were killed in local violence, which typically erupted around nightclubs, she says.

Today, she feels safer in the city but there are still several neighbourhoods she wouldn’t visit, even in the day. “And, alone on foot at night, almost everywhere is dangerous,” she says.

Marseille was a centre of France’s riots in June and July after the killing of Nahel Merzouk, a French 17-year-old of Moroccan and Algerian descent, by police in Paris.

“On the first night, I watched from the hill beneath [La Bonne Mère] with a friend; there were fires everywhere across the city,” says Lunven. But the riots have not made her feel any less safe in the city, she says. “It was an exceptional instance and related to that particular death. Now it’s over and almost forgotten.”

And the riots have done little to dent the appeal of the city to Parisians, she says. “Before when people said I came from Marseille, they say: ‘Isn’t it dangerous?’ Now, they respond: ‘Oh my God, it’s gorgeous, I wanted to live there.’”

Daimler, Cummins, and PACCAR are forming a joint venture to manufacture battery cells in the US for commercial electric trucks.

The joint venture – which consists of Accelera, the zero-emissions business unit of Cummins; Daimler Trucks & Buses; and large commercial truck maker PACCAR – will build battery cells for commercial electric trucks. Each company will own 30% of the joint venture.

The total investment is expected to be in the range of $2-3 billion for the 21-gigawatt hour (GWh) factory, and the initial focus will be on lithium-iron-phosphate (LFP) battery technology.

China-based EVE Energy, which manufactures LFP battery cells for EVs, will be the technology partner in the joint venture, with 10% ownership. It’s going to bring its battery cell design and “manufacturing know-how” to the table.

Daimler asserts in its announcement that the LFP battery cells produced by the joint venture will be able to offer lower cost, longer life, and enhanced safety without the need for nickel and cobalt raw materials.

The companies assert that the joint venture enables them to create the scale needed for cost-effective EV batteries, “ultimately creating value for commercial vehicle customers in North America.”

Martin Daum, CEO of Daimler Truck said, “For Daimler Truck, partnerships and a strict focus on costs and smart capital allocation are the key levers to succeed on the path toward sustainable transportation. This planned joint venture enables economies of scale beyond Daimler Truck. It is a key puzzle piece of our battery industrialization strategy, ensuring access to the right battery cell technology at the right cost.”

The companies have not yet announced the EV battery factory’s timeline, nor where in the US the facility will be sited.

Cambridge-based creator of titles including ‘Runescape’ had been seen as a candidate for London listing

Private equity group Carlyle has hired advisers to explore a sale for its Cambridge-based video game developer Jagex, according to people familiar with the matter.

Jagex, which has developed games including Runescape, is working with bankers at Morgan Stanley, the people said. The company could fetch more than £1bn in a sale, the people said.

Discussions are at an early stage and the timeline on a sale process could last from the end of this year until the first half of 2024, the people cautioned.

The company had previously been seen as a candidate for a UK initial public offering. Several London-listed video-games developers, including Codemasters and Sumo Digital, have disappeared from the public markets in recent years following foreign takeovers.

Representatives for Carlyle and Morgan Stanley declined to comment.

An illuminating story about greed and post-independence Ghana comes to some troubling conclusions

Tales of scammers continue to fascinate and delight. Despite a consensus that conmen — and despite some high-profile recent cases, they are often men — commit acts that most people find repulsive, we can’t seem to look away, as an ever-expanding list of books, podcasts and TV series demonstrates.

On to that well-worn path steps Yepoka Yeebo, a British-Ghanaian journalist, with her debut Anansi’s Gold, which tells the remarkable story of John Ackah Blay-Miezah, a charismatic Ghanaian huckster who for two decades masterminded what she plausibly calls “one of the greatest con artists of all time”.

Blay-Miezah — here referred to with a wink and a nudge as “Our Man” — had multiple aliases: he claimed to be, at various times, diplomat, doctor, banker, Harvard professor and a UN consultant. He was also especially fond of high-end hotels. (Needless to say, he never intended to pay.) In fact his real name was John Kolorah Blay, and he’d grown up poor in the coastal village of Alengenzure.

It was during a spell in prison in the US in 1972 — the result of failing to pay the bill at a Philadelphia hotel while impersonating an emissary of the Ghanaian government — that Blay-Miezah concocted his biggest trick, the one that would make him infamous and forms the focus of the book. It was named The Oman Ghana Trust Fund.

In Our Man’s telling, the fund had been set up by Kwame Nkrumah, Ghana’s first post-independence prime minister and president, who had purportedly creamed off large amounts of his country’s wealth — some $27bn in cash and diamonds and 30,000 gold bars, all hidden in Swiss banks. To access these funds, Blay-Miezah simply needed money in advance. Anyone who invested would get a 10-fold return.

The whole thing was, of course, a fiction; despite allegations of corruption, Nkrumah was in fact a hero of the independence movement who strove for his country to have a more balanced relationship with world powers. But it was a spectacularly successful deception nonetheless; over more than a decade, from 1973 to 1986, Blay-Miezah and his American partner, Robert Ellis, made away with millions of dollars, defrauding hundreds of people in the process. Blay-Miezah continued the scam for a few more years after Ellis left the enterprise.

Even John Mitchell — Nixon’s disgraced attorney-general — got himself involved, having been promised astronomical returns. His mere connection to the scheme helped Blay-Miezah burnish his reputation as a well-connected international businessman.

Why did people fall for the act? The reasons were numerous and not altogether surprising: greed, personal ambition, hubris. Others believed Blay-Miezah was a fraud, but were convinced the money existed somehow. He also sold people stories that suited their political objectives.

This was particularly true of an African-American priest called James Edward Woodruff, who ministered at the prison in Philadelphia. A passionate believer in economic freedom for African states, Woodruff was convinced by Blay-Miezah that the fund would be used to transform not only Ghana but entire countries. “It was as if all of Woodruff’s dreams had come true,” Yeebo writes. Woodruff ended up introducing him to Ellis, who arranged for the hotel bill to be paid and Blay-Miezah to be freed — with disastrous results.

The irony is striking. As Yeebo writes: “To black people, [Blay-Miezah and Ellis] were selling liberation: a chance to repair the wounds of colonialism. To everyone else, they were selling the chance to loot an African country’s ancestral wealth — which is to say, they were selling colonialism.”

Yeebo writes extensively about the mismanagement of Ghana both before and after independence in 1957; in the decade before independence, she claims, Britain extracted £150mn from the country — perhaps £3bn in today’s money — and invested just £1.5mn. Far from siphoning off the country’s resources, Nkrumah in fact succeeded in bringing home gold reserves being held in London.

She is also clear-eyed about the harm perpetrated after independence by a succession of military rulers — particularly Jerry Rawlings, president from 1981 to 2001, who allegedly enriched himself and his cronies at the country’s expense while espousing faux-revolutionary ideology. The book is crisp and well-told, brimming with vivid scenes and colourful writing.

Despite the trail of debt and destruction he left in his wake, Blay-Miezah never faced any real consequences. As the walls were closing in, he dropped dead of natural causes in 1992 while under house arrest — one last great escape. Meanwhile his accomplice, Ellis, went to jail.

Yet his story echoes into the present, where many Europeans or Americans still seem all too willing to believe that in partnership with a palm greased here or there, they too, could make off with a favourable oil deal or an inflated construction project.

It could even be argued that Blay-Miezah’s scheme has similarities to the advanced-fee frauds of the 1980s, which laid the groundwork for the omnipresent “Nigerian prince” email phishing scams of today — with gullible foreigners persuaded that dizzying amounts of African money could be theirs if only they send a small advance.

And the intrigue continues: in 2009, a group named the Friends of Oman Ghana Trust Fund successfully petitioned Ghana’s government to investigate the scheme, apparently believing it was entirely plausible that the country, so rich in natural resources, had some money stowed somewhere for a rainy day. A commission found no evidence that the fund ever existed. But its legend lives on.

Anansi’s Gold: The Man Who Swindled the World by Yepoka Yeebo Bloomsbury £20/$29.99, 400 pages

The tie-up would create the world’s largest paper and packaging group by sales and be worth $30bn

Recycling has contributed to the success of the cardboard box industry. That applies to the packaging producers as well. Consider the tie-up between Ireland’s Smurfit Kappa and US-based WestRock, announced on Thursday.

WestRock traces its origins to Smurfit-Stone, once part of the Smurfit group. Few financial details of any deal have been disclosed. But both groups, particularly Smurfit, will see an opportunity to repackage themselves at a higher valuation in the US stock market. Smurfit would follow the example of another Dublin-based group, CRH.

The combination would have scale. Smurfit WestRock would be the world’s largest paper and packaging group by sales and worth $30bn. Large US paper producers trade at valuation multiples a third or more higher than Smurfit’s.

The timing appears shrewd. Market concerns about waning consumer demand have sent shares in US paper and packaging groups to lows not seen since the depths of the pandemic. Smurfit’s original entry to the US in the 1970s occurred during a similar scenario.

WestRock’s share price has suffered since listing in 2015, trailing its biggest US peers and the only one with negative total returns over the period. Its own acquisitions have left it with a heavy net debt load of $9.4bn. That partly explains why WestRock trades at 6 times multiple of ebitda, compared to 8 and 10 times for International Paper and Packaging Corp of America, respectively.

Operational overlap between Smurfit and WestRock is limited. They have under 10 per cent exposure in each other’s main European and US markets. Nonetheless, Smurfit expects annual pre-tax cost savings of $400mn at the end of the first year. WestRock was already pursuing its own cost reductions. 

At current market values an all share tie-up would mean Smurfit shareholders own 56 per cent of the new group. However, on an ebitda basis Smurfit would contribute just 43 per cent, so expect the exchange ratio to fall towards 51 per cent. Net debt climbs to 2.5 times this year’s expected ebitda. 

Proposed cost savings proposed alone would add $2.4bn of value or 8 per cent to the total. The valuation kicker comes from the decision to move the main listing away from London to New York. While a re-rating is a real possibility, this shift only reinforces the perception of London’s own valuation funk.

The investment bank owned by Japan’s Daiwa Securities Group has made 27 senior hires in the past two years even as the overall M&A market has slowed

DC Advisory has hired the former global co-head of business services investment banking activity at Rothschild & Co., the 27th senior appointment made by the boutique investment bank in just two years, according to a statement seen by The Wall Street Journal.

Dan Skolds joins as a New York-based managing director in DC Advisory’s business & tech-enabled services team, which advises businesses and their private-equity sponsors on capital raising and mergers and acquisitions, the statement said. He joins Managing Directors John Lanza and Jordan Finkler along with a team of 50 bankers globally.

The team has a broad remit, covering 19 subsectors ranging from information technology services to transport and logistics and business process outsourcing, according to the bank’s website. Its clients include midmarket buyout shops Gallant Capital Partners and Mobeus Equity Partners, as well as the private-equity investment arm of Ontario Municipal Employees Retirement System, according to the bank’s website.

Skolds has advised on more than $40 billion of M&A transaction volume in his 30-year career, which includes stints at Rothschild, J.P. Morgan, RBC Capital Markets and Credit Suisse, the statement said.

DC Advisory has made growing its U.S. business a strategic priority as part of a goal to become “the premier mid-market investment bank, globally,” according to previous statements from Hiroki Ikeda, deputy head of global investment banking at the bank’s parent company, Daiwa Securities.

Earlier this week, DC Advisory announced the hiring of Stan Holtz, a 30-year veteran from Truist Securities, to lead its U.S. telecom and digital infrastructure services team. In March, the bank brought in Managing Directors Anthony Edwards and Hannah Schofield from investment bank CIBC World Markets and asset manager BlackRock, respectively, to launch a U.S. infrastructure business.

The bank has a presence in Europe and in Japan, the home market of its parent. It ranked seventh in data provider Dealogic’s list of the most active banks in European private equity during 2022, advising on 18 deals with a value of $2.6 billion.

DC Advisory’s aggressive growth comes during a prolonged slump in M&A activity caused by a combination of factors, including macroeconomic uncertainty, higher interest rates and more expensive debt financing. The total value of M&A deals announced globally fell to $3.61 trillion, a 37% decline from 2021’s record high, The Wall Street Journal reported in January, citing data provider Refinitiv.

New rules aim to increase competition in the business of moving cows, corn, chemicals and other goods

WASHINGTON—Railroads that fail to provide reliable service could be ordered to share tracks with competitors under a proposed rule that backers say will increase competition in the business of moving cows, corn, chemicals and other goods across America.

The rule on so-called reciprocal switching, proposed Thursday by the Surface Transportation Board, is seen as a way to improve efficiency among major freight lines that have struggled to move goods and supplies from farms, factories and ports, especially during the Covid-19 pandemic.

“In my view, it’s likely to lead hopefully to better service, where railroads are going to say, ‘We’d better up our game,’” STB Chairman Martin Oberman, a Democrat, said in an interview.

The board’s goal, he said, is to have the threat of increased competition motivate railroads to boost their on-time performance: “We’d rather you solve it yourself.”

The bipartisan, five-member board voted unanimously in favor of the proposed rule. If adopted, it would require all six of the nation’s Class 1 railroads to maintain uniform data on their on-time performance. When a railroad fails to meet minimum service standards, customers could file complaints and regulators would be empowered to order that it offer competitors the ability to serve the same customers.

A railroad looking to fulfill a farmer’s order, for example, would have to let a competing railroad bid for the farmer’s business—and then let the competitor’s car roll over its tracks to move the shipment.

The move sets up a clash with the railroad industry, which has previously opposed reciprocal switching, arguing that it would undercut the railroads’ business and result in increased congestion.

“Forced switching would not increase real competition but instead is being sought as a backdoor attempt to drive down rates to below-market levels,” Association of American Railroads CEO Ian Jefferies said in 2021, when Oberman and his STB colleagues were considering the policy. “Such government intervention would undermine railroads’ efforts to maximize network efficiency and push more freight to already overburdened and underfinanced highways.”

Oberman said the freight industry had brought the rule on itself, as years of labor reductions aimed at boosting profits—along with furloughs of workers during the Covid-19 lockdown—led to a collapse in its ability to transport goods as mandated under federal law.

The board’s action comes after labor and locomotive shortages led to cascading delays and trip cancellations on the major freight networks, resulting in everything from delays shipping goods from American factories to shortages of feed at dairies and poultry plants.

“We have a job to do,” Oberman said. “Congress gave us the authority and a mandate to try to keep the system efficient, and to keep it fair, and to instill competition. The statute is there for a reason.”

Oberman noted that railroads already include similar switching arrangements in contracts with shippers voluntarily, and said he doubted industry claims that mandatory switching would lead to congestion or other problems.

Hannah Garden-Monheit, a special assistant to President Biden for economic policy, praised the STB’s move as “a strong, bipartisan proposal that would promote competition, improve service, and lower costs for the thousands of businesses who rely on railroad freight shipping to get their products to market.”

The STB considered a reciprocal switching proposal in 2016, but the idea lay dormant for years afterward. Debate about whether the STB should use its powers to compel railroads to share facilities took on new life after the Biden administration issued an executive order in 2021 urging federal agencies to take measures to foster economic competition, specifically calling on STB to revive the switching rule.

The board will take public comments on the proposal and says it wants to move toward a final rule expeditiously.