--> -ve TESLA
FDC -->-3.5%
BOA is 10/12% of annual sale for FC
By AnnaMaria Andriotis and Rachel Louise Ensign
Bank of America Corp. is considering dissolving the huge payment-processing joint venture it has with First Data Corp. and developing its own business to move money between consumers and merchants, according to people familiar with the matter.
Like its rivals, Bank of America is rushing to meet demand from consumers and businesses for modern money-moving technology, which promises a steady stream of fees with each transfer or swipe. Leaving the joint-venture would give the bank more control of its business that focuses on moving money for merchants.
The decade-old partnership has been particularly lucrative for First Data. Bank of America was still reeling from the financial crisis when it negotiated the deal, allowing First Data to extract generous terms. First Data has a majority ownership stake in the joint venture -- Bank of America Merchant Services -- and it accounts for about 10% to 12% of First Data's revenue, according to estimates by Bernstein analysts.
If the bank ends the partnership, it could still work with First Data and other outside firms.
A final decision on the partnership, which expires in June 2020, hasn't been made, said people familiar with the matter. Both companies are required to give a year's notice before ending it, according to a securities filing.
Banks and financial-technology companies are locked in a fierce competition for the business of connecting merchants and their customers.
Payment processors enable gas stations, grocery stores and other merchants to accept debit- and credit-card payments. They help move money from a customer's account to the merchant's, and they often sell the terminals used at registers to accept card payments.
Citigroup Inc. in March said it was starting a new unit to provide merchant-processing services for big clients. JPMorgan Chase & Co. has its own processing unit, which has struck lucrative partnerships with big merchants including Amazon.com Inc. since ending its own joint venture with First Data in 2008.
First Data is the largest company in the so-called merchant-acquisition business in the U.S. when including partnerships with banks. Bank of America Merchant Services, the fourth-largest merchant acquirer, processed about 17.3 billion card transactions in 2018, according to the Nilson Report. Top clients include Target Corp. and Best Buy Co., people familiar with the matter said.
Fiserv Inc. earlier this year announced plans to acquire First Data in a $22 billion deal.
Bank of America in recent years has expanded its unit focused on payments across its business lines. Its Enterprise Payments division, which houses teams working on multi-bank ventures such as Venmo competitor Zelle and Real-Time Payments, has in recent months hired dozens of employees, including some from the joint venture, focused on merchant payment-processing, some of the people said. Guy Harris, a longtime top executive at U.S. Bancorp payment-processor Elavon, was brought on to help run the group.
The bank also is putting merchant-services representatives inside branches in an effort to sell existing clients these products, two people said.
"The modern payment system is our foundation for the future," Bank of America Chief Executive Brian Moynihan said in April.
The First Data partnership has been fraught with issues for years, people familiar with the matter said. Clients have experienced delays getting money from customers, the people said, and outages have kept merchants from accepting cards for short periods.
Clients complaints have caused concern within Bank of America because many of these merchants have other relationships with the bank, one of the people said.
REE likely to create combined telecoms division ahead of stake sale - sources
09 MAY 2019
Red Electrica de Espana (REE), [BME:REE] is likely to create a new telecoms division, combining its fiber-optics business and Hispasat, before offering a stake in the new entity for sale, two sources familiar with the situation and a sector banker said.
The Spanish electricity network provider is closing the acquisition of satellites company Hispasat. Local press said last month that it could sell a stake in its fiber business Reintel or list it, following this deal. It could also seek a co-investor for Hispasat, it was reported.
Although bankers are pitching a range of solutions, the creation of a new telecoms division to hold both businesses and a subsequent deal at the divisional level makes more sense than transactions involving the individual businesses, the first source said. No sale process is currently taking place, this source added.
Reintel by itself would be much less interesting for investors than REE’s overall telecoms business, said the second source. An operational merger of fiber and satellites would create value, the banker said.
The company is buying Hispasat for EUR 949m. It is the eighth-largest satellites company in the world, and the fourth in Latin America, with an EBITDA of 161m.
REE has said that it sees Hispasat as being complementary to its dark (or unused) fiber optic network. It buys fiber networks and sells access to last-mile providers, it said.
The idea behind looking for a partner for the telecoms business makes a lot of sense, said the second source. REE needs to invest significant sums of money, has high debt and is to face tougher regulations, this source said. REE needs to think about its capital structure, this source added.
REE said it intends to keep its net financial debt / EBITDA ratio around 4x up to 2022. The ratio was 3x at the end of 2018, before closing the Hispasat deal. Its net financial debt was EUR 4.68bn, while its EBITDA for the year was EUR 161m.
On 8 April, Fitch Ratings downgraded REE to A- from A. The agency said that the company’s EUR 6bn investment plan to 2022, including the Hispasat deal, is not compatible with its current capital structure.
Infrastructure funds would be very interested in taking a minority stake in REE’s telecoms unit, the second source said. The Spanish government, which counts Hispasat as a strategically important business, would be unlikely to throw up any regulatory hurdles, this source said.
At the same time, an IPO of the telecoms division could also make sense, the second source, an ECM banker and a buysider said. Network businesses are in demand with investors, said the ECM banker and the buysider.
REE’s telecoms business would be a growth story, focusing on communication by air and sea, comparable to SES SA [FRA: SES] of Luxembourg, the buysider added.
A spokesperson for REE declined to comment.
Early premarket gappersGapping up:
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Gapping down:
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Bosch says it will be carbon-neutral in 2020
German group will use renewable sources of energy and compensate for ‘unavoidable CO2’ emissions
German technology group Bosch said it plans to be “fully carbon-neutral” by next year — a decade or more earlier than most of its rivals — thanks to big investments in clean electricity and an ambitious carbon offset programme.
The private company is among Germany’s largest, with €78bn in revenue and 410,000 employees spanning 400 engineering, manufacturing, and administrative sites globally.
The group said from next year “it will no longer leave a carbon footprint”. It will use renewable sources of energy where possible and compensate for “unavoidable CO2” emissions where necessary. It is investing €1bn in energy efficiency over the next 10 years and another €1bn on offset programmes.
“We see climate action as our responsibility, and believe we have to act now,” said Volkmar Denner, chief executive, at the group’s annual press conference in Renningen.
Bosch cited International Energy Agency data showing that manufacturing accounted for 32 per cent of global carbon dioxide emissions. Bosch alone emits 3.3m tonnes of carbon per year, a 35 per cent reduction from 2007.
The company said its hope is that by 2030 it can scale back its carbon offset schemes by using more and more green energy, for instance by enlarging its photovoltaic systems in India where it can achieve a “tenfold increase in installed energy capacity”.
The calculations do not, however, include emissions from the products it sells, which include diesel engines. Bosch settled with US regulators in 2017 to resolve allegations that it played a significant role in Volkswagen’s diesel scandal. The group paid $328m, but admitted no guilt.
Bosch said: “We will break down and analyse in detail any other emissions associated with our activities.”
Other German companies have made similar pledges, though their carbon-neutral targets are more distant.
DHL plans to “reduce all logistics-related emissions to zero by the year 2050.” Siemens said in 2015 it will cut its carbon footprint in half by 2020 and be climate neutral by 2030. Volkswagen plans to make its operations, including its supply chain, CO2-neutral by 2050.
At a political level, Berlin has been advocating an Energiewende, an “energy turnround,” to make its whole economy climate neutral by 2050, since the late 1990s.
Last year renewable energy from wind and solar overtook coal as Germany’s most important power source, according to industry group BDEW. But the share was just 36 per cent of the energy mix, which is still reliant on natural gas, coal, and lignite — one of the dirtiest sources of energy.
Mr Denner said: “Carbon neutrality is do-able and, if pursued with the necessary determination, can be achieved quickly.”