TheChek News Flow

KPMG's tally of consumer and retail deal activity shows a market that is charging ahead despite uncertainty.

When President Donald Trump’s “Liberation Day” tariffs first hit in April, the conventional dealmaking wisdom was that the mergers and acquisition market would get swamped in the trade war.

The outlook was just too uncertain and the expense of even the threat of tariffs was too high to make any kind of real bets on the future. Both strategic and financial buyers were expected to wait until the smoke cleared and then buy into whatever new market reality emerged.

But the market decided not to wait.

Investors last quarter felt good enough to go with their gut and bet on their own reality.

The result was fewer, but bigger, deals, according to KPMG’s second-quarter update on M&A trends in the consumer and retail space.

“Economic uncertainties and geopolitical challenges, such as tariffs and looming inflation concerns, haven’t paralyzed the market,” KPMG said. “On the contrary, significant transactions have flourished, driven by dealmakers’ recalibration of priorities and a flight to quality in response to consumer demand.”

While the number of deals fell to 496, a 14.6 percent decline from a year earlier, the value of the transactions that did get signed shot up 194 percent to $34.7 billion.

“Dealmakers doubled down on wellness, digital, and distressed assets — prioritizing strategic clarity over deal count as consumer and retail M&A roared back in value,” said Frank Petraglia, a partner at KPMG Advisory, in the report.

KPMG pointed to an increase in “high-confidence investments” for both private equity and strategic buyers.

“They bought digital-native brands, consolidated distressed assets, and doubled down on wellness, frozen foods, and omnichannel capabilities,” the report said.

That included Unilever’s $1.5 billion deal for Dr. Squatch and E.l.f. Beauty’s $1 billion acquisition of Hailey Bieber’s Rhode.

“Retail, meanwhile, is undergoing a survivalist transformation,” KPMG said. “Consolidation is no longer optional, it’s existential. Dick’s Sporting Goods’ $2.4 billion acquisition of Foot Locker and DoorDash’s multibillion-dollar spree — Deliveroo, SevenRooms, Symbiosys — reflect a strategic pivot toward operational efficiency, market share capture and tech-enabled resilience.”

And KPMG said private equity firms are “targeting carve-outs, founder-led brands, and wellness platforms with scalable economics and strong exit potential, bolstered by expanding access to private credit.” The example there was 3G Capital’s $9.4 billion deal to take Skechers private — the biggest buyout in shoe history.

All in all, the report called it “a quarter of bold moves and strategic clarity.”

“Corporate and PE dealmakers alike are coming off the sidelines when the strategy is sound and the value creation path is visible from Day One,” KPMG said.

If Trump’s tariffs gave dealmakers pause at first — and still have would-be investors looking over their shoulders — other elements of the president’s agenda have helped nudge the big-money buyers ahead.

“The One Big Beautiful Bill Act is reshaping the M&A landscape in consumer and retail by incentivizing greater capital deployment through an enhanced cash tax shield for new investments and the immediate expensing of R&D, exploration costs, and capital expenditures — boosting ROI and freeing up funds for expansion,” KPMG said. “For PE, front‑loading these deductions over a typical three to five year holding period materially improves after‑tax returns. For corporates, it reduces income tax expenses and increases earnings per share. Additionally, the removal of prior interest‑deductibility limits tied to EBITDA [earnings before interest, taxes, depreciation and amortization] gives PE portfolio companies a broader range of deductible interest, further enhancing leveraged deal economics.”

The cleanup is expected to cost nearly $63 million and take more than a decade to complete

General Electric GE 0.07%increase; green up pointing triangle and United Nuclear have agreed to a U.S. consent decree requiring an estimated $63 million cleanup of uranium mine waste at sites in New Mexico and the Navajo Nation.

The Justice Department said Monday the agreement requires the two companies to excavate and remove approximately one million cubic yards of uranium mine waste from the Northeast Church Rock Mine Superfund Site, located on the Navajo Nation.

The companies will transfer the waste to the UNC Mill Site, a federally licensed disposal facility located adjacent to Navajo Nation, the DOJ said.

The cleanup is expected to cost nearly $63 million and take more than a decade to complete, the DOJ said.

The agreement comes after two decades of coordination between the Environmental Protection Agency, the Energy Department, the Nuclear Regulatory Commission, the Interior Department, state and tribal stakeholders, and UNC and GE.

The Northeast Church Rock Mine operated from 1967-82 and was the principal source of uranium ore for the UNC Mill.

The EPA has required several shorter-term cleanups at the site, but it continues to pose a risk of releasing hazardous substances to the air and surrounding soils, sediments, surface water and groundwater, the DOJ said.

China Creates World’s No. 1 Shipbuilder, Driven by Rivalry With U.S.

In $16 billion deal, Beijing looks to counter Trump’s moves to rebuild American shipyards

A $16 billion merger of two state-controlled shipbuilders in China is set for completion this week, creating the world’s biggest shipbuilder while the U.S. searches for a path back into the business.

American shipbuilders are playing catch-up after decades of maritime-industry decline, though President Trump’s ambitious plans to revive American shipbuilding have hit snags recently. In the shorter term, Trump’s threat to impose higher fees on ships made in China is giving South Korean and Japanese rivals an opening to win back market share.

The Chinese champion is called China State Shipbuilding, or CSSC. This week it is scheduled to absorb its merger partner, China Shipbuilding Industry, and take the sole listing on the Shanghai Stock Exchange after regulators recently approved the deal.

The merged company hopes to use its bulk to cut costs and help it ride out industry turmoil brought on by Trump’s moves.

The two companies were originally one and split up in 1999, when the government wanted to promote competition. These days, Beijing is looking to consolidate state-led companies in sensitive industries, particularly those connected with the military.

CSSC’s main business is commercial, but it is also an important contractor for the Chinese navy. The company it is absorbing designed and built China’s first homegrown aircraft carrier, the Shandong.

The company said the merger will allow it to better fulfill the navy’s need for advanced equipment.

“This is a key milestone in China’s long-term push to dominate global shipbuilding,” said Matthew Funaiole, an analyst at the Center for Strategic and International Studies in Washington.

Together, the companies accounted for almost 17% of the global market last year, based on new-orders data from Clarksons Research. The merged company’s combined order book will total more than 530 vessels and 54 million deadweight tons, the most in the world, with an annual revenue of around $18 billion, based on the latest annual reports.

“It strengthens Beijing’s ability to execute its military-civil fusion strategy,” Funaiole said. “Commercial and naval production are increasingly integrated, sharing technology, talent and infrastructure.”

Beijing set its sights on dominating the shipbuilding industry decades ago, and now Chinese shipbuilders make up more than half of the global market. China-built ships accounted for about 55% of global tonnage last year, compared with less than 0.05% for the U.S., data from the United Nations show. China possesses 232 times the shipbuilding capacity of the U.S., according to the U.S. Navy.

But recent data suggest China is facing rougher times because the prospect of U.S. port fees on Chinese-made ships has prompted owners to look at non-Chinese shipyards. In addition, Trump’s tariffs and countries’ focus on domestic supply chains have raised the specter of less global trade overall, meaning fewer ships would be needed to carry goods.

Singapore-listed Yangzijiang Shipbuilding, China’s biggest private yard, received orders for 14 ships worth $540 million in the first half of 2025, compared with 126 vessels worth $14.6 billion for all of last year. Clarksons data show global new ship orders fell 48% year on year in the first half of 2025.

Yangzijiang said the sector faces “macroeconomic uncertainties and geopolitical tensions.”

Meanwhile, smaller rivals in Japan are looking to reclaim market share after decades of being pushed into a corner by lower-cost Chinese and South Korean rivals.

Return of FDA official targeted by Trump allies hits biotech shares

Food and Drug Administration reinstates Vinay Prasad who left agency in July after social media campaign

Shares of biotech companies endured volatile trading on Monday following the surprise return of a top US drug regulator who left in July after rightwing influencer Laura Loomer led a campaign to oust him.

The US Food and Drug Administration said over the weekend it had reinstated Vinay Prasad to his role overseeing the agency’s division for vaccines and a host of other medicines.

The U-turn caught the market off guard, with analysts warning Prasad’s return may undermine consistency in how his division approves drugs and adds a “new twist” to leadership turmoil within the FDA. It also suggests health secretary Robert F Kennedy Jr and the regulator’s commissioner Marty Makary were willing to test political blowback to bring back an ally.

Prasad, a critic of the mask mandates and quarantines that comprised the US’s response to the Covid-19 pandemic, left the FDA in late July after social media attacks from conservatives including Loomer and former senator Rick Santorum over the agency’s handling of a gene therapy drug made by Sarepta Therapeutics.

Sarepta shares dropped as much as 5.2 per cent on Monday amid volatile trading, while those of Replimune — another gene therapy group — fell as much as 15.1 per cent. Replimune has a drug pending approval before the FDA division Prasad oversees. The declines eroded some of the gains the stocks experienced following his departure.

Analysts had hoped Prasad’s exit would bring more consistency to drug approvals at his division, the FDA’s Center for Biologics Evaluation and Research. The division has approved 10 drugs this year, down from 15 at this point in 2024 and 16 in 2023, agency data show.

“The FDA leadership turmoil amid the Prasad saga raises the question: how politically vs scientifically driven is the agency today?” Jefferies, an investment bank, said in a note published on Sunday. “The FDA has experienced significant turmoil with the dramatic overturn for Sarepta, abrupt Vinay Prasad leaving and a new twist just added with Prasad being reinstated.”

In July, the FDA asked Sarepta to halt its gene therapy for Duchenne muscular dystrophy, after three deaths potentially related to the company’s treatment. Days later, following criticism including from Loomer and Santorum, the FDA said Sarepta could resume shipments for the medicine. Soon after, Prasad left the FDA.

“Prasad, the leftist saboteur undermining Trump’s FDA, must be fired now!” Loomer said on X last month.

Santorum, a former senator from Pennsylvania who has a daughter with special needs, advocated for Sarepta’s Duchenne FDA approval in 2016 and continued to support the company in July.

As a result of what they described as the “recent rapidly changing” leadership situation within the FDA, Jefferies analysts said “this headline will likely be taken with caution on how long, if at all, Prasad will actually be staying”.

The health department confirmed Prasad’s return, adding, “neither the White House nor [Health and Human Services] will allow the fake news media to distract from the critical work the FDA is carrying out under the Trump administration”.

Replimune did not respond to request for comment. Sarepta said it will continue to work with the FDA as usual.

Donald Trump says gold imports will not face US tariffs

President’s intervention comes after shock plan to hit bullion with duties triggered price surge

Donald Trump said on Monday that the US would not impose tariffs on imported gold, easing fears of disruption in the world’s bullion market.

“Gold will not be Tariffed!” the US president wrote on his Truth Social platform. His statement ended days of market uncertainty triggered by a US Customs and Border Protection ruling last week outlining new duties on imports of widely traded bullion bars.

Spot gold prices fell 1.2 per cent to $3,357 a troy ounce in Monday afternoon trading in New York after Trump’s post, while US gold futures dropped about 2.5 per cent to $3,407. The benchmark Comex contract recorded its largest one-day decline in three months, closing down $86.60 at $3,404.70.

Trump’s intervention came days after the Financial Times revealed that the US would hit one-kilo gold bars with tariffs, triggering a surge in gold futures to a record intraday high of $3,534 per ounce.

On Friday, the White House said it would issue a new executive order “clarifying” its tariff plan for gold — a move taken in the market to mean that it would adjust or scrap the duty.

News last week of the CBP ruling blindsided traders and created an unusually wide premium in futures prices of more than $100 over London spot prices as banks, as refiners and dealers raced to secure metal for delivery.

Switzerland, which refines about 70 per cent of the world’s gold, was seen as particularly exposed. The CBP ruling came just days after Switzerland’s President Karin Keller-Sutter failed to strike a trade deal with Trump to soften the high tariffs the US imposed on her country.

Much of Switzerland’s output is shipped to the US for investment and industrial use.

The unexpected CBP decision marked the first time the US had sought to levy tariffs on bullion, a product traditionally exempt because of its role in the financial system. The move appeared to overturn an April White House statement that gold would be excluded from sweeping trade measures.

Analysts warned the episode could redraw global bullion flows and undermine New York’s position as the largest gold futures market.

Australia’s landmark purchase of Mitsubishi frigates offers model for future sales of warships, missiles and radars

Australia’s choice of Mitsubishi Heavy Industries as its preferred supplier for a new batch of frigates marks a huge step in Japanese efforts to become a major arms exporter at a time of rising regional tensions and stretched defence supply chains.

But analysts warn that Japan will have to overcome production capacity and labour constraints to demonstrate it can offer a real alternative to the US, European and South Korean defence suppliers.

MHI’s $6.5bn frigate deal, which Tokyo and Canberra announced this week and expect to finalise early next year, would be the first international sale of a complete Japanese defence platform with lethal capabilities since the second world war and a model for future exports of warships, missiles and radar systems.

“This deal is a major breakthrough for Japan,” said Hirohito Ogi, a senior research fellow at the Institute of Geoeconomics and former defence ministry official. “This will further motivate the Japanese defence companies to seek other opportunities for international arms transactions.”

MHI’s success comes as arms contractors ride a surge in global defence spending fuelled by conflicts in Ukraine and the Middle East, and as US allies in the Indo-Pacific strengthen their militaries to counter China’s increasing might.

Japan in 2014 lifted a self-imposed ban on almost all arms exports that had since the late 1960s restricted the country’s technologically powerful industrial groups to supplying its Self-Defense Forces.

But big deals have proved elusive since Japan lost out to France on a $35bn submarine supply deal from Australia in 2016.

Ogi said a major difference this time was that “the current international arms market is characterised by a lack of supply capacity”.

“The US cannot meet all the demands of its allies for its weapons,” he said. “Australia needed the capabilities that Japan could provide.”

Analysts said Japan’s defence industry had learned from the previous failure to tailor its product to Australia’s needs. The private sector also gave its support to a more sophisticated government campaign.

MHI offered an upgraded version of its Mogami-class frigate, which only requires 90 crew members — compared with the 120 needed on the vessel proposed by Germany’s Thyssenkrupp — yet is bigger, allowing the longer cruising range and larger weapons capacity Canberra wanted.

Japan was also able to guarantee delivery of the first vessel by 2029, plugging a gap caused by the retirement of Australia’s existing Anzac-class frigates, and could promise interoperability with the US Navy.

Despite a higher upfront price, the Australian government insisted Japan’s warships would be cheaper when their lower weapons and personnel costs, as well as longer hull life, were factored in.

Jennifer Parker, an associate at the Australian National University’s National Security College and former naval officer, said Japan’s frigates were “clearly, on paper, the best ship” for Australia.

Japan is under consideration to co-operate on undersea autonomous technologies under pillar two of Aukus — the trilateral security pact between Australia, the UK and the US. Given that, Masashi Murano, senior fellow with the Hudson Institute’s Japan chair, said its selection to build the frigate took on a “broader significance” as Tokyo and Canberra were likely to deepen collaboration on stealth technologies.

Tokyo is already developing a fighter jet with the UK and Italy that the three countries hope to sell internationally to recoup development costs. Japan also possesses significant capabilities in advanced air defence missiles and space technologies, all potential candidates for export.

In 2023, Japan amended its arms export rules to allow the shipment of Patriot air defence missiles to the US so that Washington could send its own stocks to Ukraine.

However, arms exports remain a sensitive political issue in the constitutionally pacifist country. The government still only allows the export of lethal weapons under conditions such as requiring the importing country not to be involved in an active conflict.

It may also be a challenge for Japanese arms suppliers to find sufficient production capacity for exports, as domestic demand is spurred by a planned rise in defence spending to 2 per cent of GDP by 2027, up from 1.8 per cent.

Yoshinori Kanehana, chair of Kawasaki Heavy Industries, said in January that the defence sector was “suffering” from red-hot orders. He cited annual orders for the CH-47 Chinook helicopter that KHI produces under licence from Boeing jumping from six units in 2017 to 17 last year.

“We cannot build a factory in a short period,” he said, adding that it was managing with its existing production capabilities. “It is now time for us to increase capacity. We don’t have enough people. We need to train the people, take from the other divisions to train to do military planes, as well as hiring from outside, but it is very difficult.”

Japan will produce the first three of 11 frigates at home, with the remainder built in Australia with local partner Austal. Corey Wallace, associate professor at Kanagawa University, said that could be very challenging, given Japan’s lack of experience with overseas defence “maintenance, services and supply chain” management.

Parker at ANU warned that problems delivering the frigates could damage ties between Japan and Australia, which have been blossoming. But if MHI can deliver, Japan could carve itself a place in the global arms industry.

“There are a lot of tier-two or tier-three military powers that can’t afford US equipment,” said Wallace. “Japan now has a fantastic opportunity to dispel the external factors and perceptions that were limiting it from becoming a major arms exporter.”

Scania to export half of trucks built at €2bn China plant

VW-owned group preparing for global influx of Chinese-made vehicles by staying close to cutting-edge technology

Scania intends to export half of the trucks to be built at its new €2bn plant in China as the Swedish group doubles down on manufacturing in the world’s largest commercial vehicle market despite rising geopolitical tensions.

Chief executive Christian Levin told the Financial Times that the Volkswagen-owned group was preparing for a wave of Chinese-made trucks by staying close to rivals who are producing cars in the country and competing fiercely on technology.

“China has more free trade agreements with countries in the world than the European Union. We will, of course, take advantage of any export opportunity,” Levin said in an interview.

At least half of the trucks manufactured at the plant in the eastern Chinese city of Rugao would be exported to Asia and Oceania, Levin said. The plant is set to begin production in October.

The investment — its biggest outside Sweden in six decades — makes Scania one of a select group of foreign vehicle manufacturers to have been granted a licence to operate a fully-owned plant in China, following in the footsteps of Tesla’s Shanghai gigafactory.

It also bucks a broader trend among western truckmakers, which have been reducing their exposure to the world’s largest commercial vehicle market. German rival Daimler Truck recently told the FT it would not rule out an exit from manufacturing in China, with chief executive Karin Rådström saying it was “not an easy market to be profitable in”.

Scania’s Rugao plant, an addition to its existing manufacturing facilities in Europe and Brazil, would offer the company greater flexibility in allocating production depending on the geopolitical situation, Levin said.

The group’s board signed off on the investment in order to stay close to the sector’s cutting-edge technology, as the group braces for Chinese truckmakers to make inroads to global markets in the same way as carmakers such as BYD have done.

“The Chinese manufacturers today are predominantly strong in China, but that’s today,” he said. “I’d rather take on the competition and try to beat them in their home market. And if we can do that well, then we know that we can do that well anywhere in the world.”

Scania has also persuaded Beijing that its efficient tailor-made manufacturing technology could help transform the country’s heavy vehicle industry. The Chinese government in turn has asked Scania to increase production quickly to its full capacity of 50,000 units.

“[It] has been very clear in the discussions with government officials on both local and central level that they would like Scania to bring a lot of cutting-edge technology that we have in our toolbox to China,” said Levin, describing the approval process as “swift”.

The investment comes as sales of diesel trucks in China have taken a hit following a shift to liquefied natural gas-powered vehicles, and a weakening domestic economy.

About 900,000 heavy-duty trucks were sold in China last year, according to the China Association of Automobile Manufacturers, down 44 per cent from a peak in 2020, as sales of diesel-powered trucks plunged. The top three best-selling truckmakers in the country are all state-owned companies, commanding a combined 60 per cent market share.

Levin said he was not expecting a major rebound in China’s overall heavy goods vehicle market, but predicted demand for premium transport would take off next year after Beijing tightens emission standards. It plans to offer diesel engines that can also run on biodiesel to reduce emissions.

However, Scania’s bet on China comes at a time when local rivals have big plans to electrify traditionally gas-guzzling juggernauts. Robin Zeng, founder of China’s battery group CATL, recently told the FT he expected half of all new trucks sold in the country to be electric by 2028.

Levin said trucks to be produced at the new China plant would feature a “Lego-like” design, which will allow internal combustion engines to be interchanged with battery packs inside a vehicle.

The first model to be produced in Scania’s Rugao factory will have an internal combustion engine. However, Levin said the company was in no hurry to commit capital to any single energy solution, until it becomes clear “which technology [would] be the standard and which one will win the race”.

Recent breakthroughs have revived confidence about creating full-scale quantum systems by end of the decade

In the race to build a workable quantum computer — a dream at the intersection of advanced physics and computer science since the 1980s — the finish line may be in sight.

A spate of recent technical breakthroughs means that leading tech companies are vying to become the first to expand what until now have been a series of lab experiments into full-size, workable systems.

In June, IBM became the latest to claim its path was now clear to a full scale machine, after publishing a blueprint for a quantum computer that filled in key missing pieces from its earlier designs. Quantum computers hold the potential to solve problems beyond today’s machines in fields such as materials science and AI.

“It doesn’t feel like a dream anymore,” said Jay Gambetta, head of IBM’s quantum initiative. “I really do feel like we’ve cracked the code and we’ll be able to build this machine by the end of the decade.”

That has intensified a race against Google, which cleared one of the biggest remaining hurdles late last year and says it is also on course to build an industrial-scale quantum computer by the end of the decade.

“All the [remaining] engineering and scientific challenges are surmountable,” said Julian Kelly, head of hardware at Google Quantum AI.

Yet even as they put some of the hardest science problems behind them and gear up for a sprint to the finish line, the companies still face a raft of more routine-sounding but still difficult engineering problems to industrialise the technology.

The remaining hurdles “seem technically less challenging than the fundamental physics, but we should not underestimate that engineering effort to scale”, said Oskar Painter, the executive in charge of quantum hardware at Amazon Web Services. He predicted a useful quantum computer was still 15-30 years away.

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Reaching industrial scale means taking systems that comprise fewer than 200 qubits — the basic building blocks for quantum machines — and expanding them to 1mn qubits or more. The companies involved compare this to the early days of conventional computing, though quantum computers pose additional challenges.

Among the toughest is the inherent instability of qubits, which maintain their quantum states — when they can perform useful calculations — for only tiny fractions of a second. That leads to incoherence, or “noise”, as ever-larger numbers of qubits are added.

One graphic demonstration of the limits of scaling came when IBM increased the number of qubits in its experimental Condor chip to 433, leading to “crosstalk”, or interference, between the components.

Stacking larger numbers of qubits together like this “creates a bizarre effect we can’t control anymore”, said Subodh Kulkarni, chief executive of Rigetti Computing, a US start-up that also works with qubits made from superconductors, the same technology used by IBM and Google. “That’s a nasty physics problem to solve.”

Gambetta said IBM had anticipated the interference seen in its Condor chip, and that it had moved on to a new type of coupler to link its qubits, making its systems less susceptible to the problem.

In the first experimental systems, qubits have been “tuned” individually to improve their performance. Complexity and cost makes this impractical at larger scale, leading to a pursuit of more reliable components — something that will require steady improvements in manufacturing, as well as new breakthroughs in materials. Google also says it aims to bring down component costs by a factor of 10 to hit its target cost of $1bn for a full-scale machine.

The companies say their systems will be able to tolerate a degree of imperfection in the qubits thanks to a technique known as error correction. This works by copying data between a number of qubits, creating redundancy for when any individual component fails.

So far, only Google has demonstrated a quantum chip capable of performing error correction as its size increases. According to Kelly, any company trying to scale up without first reaching this point would end up with “a very expensive machine that outputs noise, and consumes power and a lot of people’s time and engineering effort and does not provide any value at all”.

Others, however, have not slowed their attempts to scale, even though none has yet matched Google.

IBM said its sights were set on what it called the most important challenge, of showing it can operate a system at very large scale, while also questioning whether Google’s approach to error correction will work in a full-sized system.

The technique used by Google, known as surface code, works by connecting each qubit in a two-dimensional grid to its nearest neighbours. This relies on a relatively large number of qubits working together and requires the system to reach 1mn qubits or more to perform useful calculations.

Microsoft has said it decided against pursuing a similar design after deciding that trying to build 1mn-qubit machines presented too many other engineering challenges.

IBM changed course to a different form of error correction, known as a low-density parity-check code, which it claims will require 90 per cent fewer qubits than Google. However, this depends on longer connections between qubits that are further apart, a difficult technology challenge that has left it behind.

Kelly at Google said IBM’s technique added new levels of complexity to systems that are already extremely hard to control, though IBM claimed last month to have succeeded in creating longer connectors for the first time.

The latest IBM design appeared capable of producing a workable, large-scale machine, said Mark Horvath, an analyst at Gartner, though he added that its approach still only existed in theory. “They need to show they can manufacture chips that can do that,” he said.

Regardless of design, the companies face many other common engineering challenges.

These include reducing the rat’s nest of wiring found inside early quantum systems by finding new ways to link large numbers of components into single chips, and then connecting a number of chips into modules. It will also require much bigger, specialised fridges to house full-scale systems, which operate at extremely low temperatures.

Issues like these highlight basic design decisions that could be critical as the systems scale. Ones that use superconductors as qubits, such as those from Google and IBM, have shown some of the biggest advances, though their qubits are harder to control and they need to operate at temperatures close to absolute zero.

Rival systems that use atoms as qubits — known as trapped ions and neutral atoms — or those that use photons promise to be inherently more stable. But they face several other hurdles, including the difficulty of linking their clusters of qubits together into larger systems and overcoming their slower computing speed.

The costs and technical challenges of trying to scale will probably show which are more practical.

Sebastian Weidt, chief executive at Universal Quantum, a British start-up working with trapped ions, said that government decisions about which technologies to back during this period would probably play a big part in narrowing investment down to “a smaller number of players who can get all the way”.

In one sign of growing official interest in sorting out the winners, Darpa, the Pentagon’s advanced research agency, last year began a broad study of different quantum companies with the aim of identifying which could be expanded to reach practical size the fastest.

Meanwhile, several companies have recently shown off radical new designs for qubits, which they say will be more controllable.

They include Amazon and Microsoft, which claims to have mastered a state of matter to create more reliable components. These technologies are at a far earlier stage of development but their backers claim they will eventually leap ahead.

That hasn’t slowed the companies using older techniques that have been years in development. “Just because it’s hard, doesn’t mean it can’t be done,” said Horvath at Gartner, echoing the confidence fuelling the industry’s race to scale.

Tussle is a test of new UK governance rules on related-party transactions

Billionaire activist Daniel Loeb is battling with shareholders to turn his London-listed company into a Cayman Islands-based reinsurer, testing new UK governance rules in a bid to manage money for American retirees.

In May, Loeb’s London-listed investment company Third Point Investors Limited (TPIL) announced plans to buy Malibu Life Reinsurance (Malibu Re) in a reverse takeover that would transform the investment vehicle into a reinsurer focused on the fast-growing US market for fixed annuities. 

The London vehicle was set up as a feeder fund giving investors access to the strategies of Loeb’s New York hedge fund Third Point, which separately created and capitalised Malibu Re. 

The proposed takeover has met a backlash from a group of TPIL investors, even after a July offer sweetened the deal.

“Dissenting shareholders have been trapped in this vehicle, against their will, to fund Third Point’s ambitions in reinsurance,” Tom Treanor of Asset Value Investors, which is part of the investor group opposed to the takeover, told the Financial Times.

Cayman vehicles are contentious because they are more lightly regulated and required to hold less capital to meet their obligations, compared with insurers based in Bermuda, a much larger offshore reinsurance destination.

The investor group, which includes Staude Capital and Metage Capital alongside AVI, said it was not satisfied even after Third Point raised its offer.

TPIL originally offered to acquire Malibu Re in an all-share deal that valued the reinsurer at about $68mn. It also proposed a potential tender offer for up to $75mn of TPIL shares, priced at a 12.5 per cent discount to net asset value.

In July, it replaced the tender offer with a redemption offer in which TPIL proposed to allow up to $136mn of shares to be redeemed at a narrower discount of about 5 per cent, although not all the payment would be upfront.

But the investor group complained that the deal was risky and that much of the upside could end up flowing to Loeb’s New York hedge fund, which manages assets for Malibu Re.

“Every alternative asset manager now has some sort of reinsurance or insurance client,” Treanor said. Deals to manage insurance inflows could be “incredibly lucrative” for asset managers, he said, but details on the plan for the combined business were scarce.

The results of a shareholder vote on the Malibu Re takeover are expected to be announced following a meeting on Thursday. Under the Financial Conduct Authority’s new rules for related-party transactions, which came into force last year, Loeb will be permitted to vote his 25 per cent stake in TPIL.

TPIL’s board said last month that it had irrevocable support from shareholders holding 45 per cent of the company’s voting rights — including Third Point itself — to back the deal.

One person involved in the deal said negative media coverage of the fight had become a cautionary tale against listing in London. “Do you think a company like this is now sitting here saying, ‘thank God we’re on the London Stock Exchange?’” they said.

Dimitri Goulandris, chair of the TPIL strategy committee, said: “The transaction offers a clear path to long-term shareholder value and represents a rare opportunity to bring a high-quality reinsurance platform to the London market.”

The board’s “fully independent strategy committee”, which included a representative of the investor group, had “reviewed a wide range of business and structural options” before making its recommendation, Goulandris said, describing the group’s claims of “poor governance and undisclosed conflicts of interest” as “fantastical”.

“The board’s duty is not to placate or prioritise the interests of one group of shareholders, but to act honestly and in good faith in what it believes to be the best interests of the company,” he added.

Under the new FCA rules, larger related-party deals require a sponsor of the transaction to give an opinion that the transaction is “fair and reasonable”. That view was given by Jefferies, the investment bank.

The dissenting investor group pointed to “the close personal and commercial relationships” between Jefferies and Third Point, and said it had raised ties between the groups to FCA regulators as a conflict of interest. Jefferies chief executive Rich Handler hired Loeb to work in the investment bank’s office in the 1990s.

Jefferies and Handler declined to comment.

Germany’s biggest weapons maker says customers stand to benefit from economies of scale and more automation

The boss of Rheinmetall said the cost of tanks, armoured vehicles and artillery was set to fall in the coming years despite a surge in defence spending by European governments.

Responding to fears that ballooning European defence budgets would lead to price inflation and poor value for taxpayers, chief executive Armin Papperger told the Financial Times that the cost of its armoured vehicles and artillery systems “will go down and not up”.

The head of Germany’s largest weapons maker said economies of scale and greater use of automation “should be good for the company but it should be also good for the customers”.

The cost of ammunition was already falling after Rheinmetall expanded its ammunition production capacity tenfold over the past three years in response to surging demand, Papperger said.

Such economies of scale have been harder to achieve with tanks and armoured vehicles. However, he said the company expected “thousands and thousands” of orders for products such as its Boxer and Puma vehicles as well as the Leopard 2 tank — produced by the Franco-German KNDS but with a gun turret made by Rheinmetall — over the next 12 months.

That forecast included orders worth an estimated €30bn to €35bn for tanks and armoured vehicles from Germany alone after Chancellor Friedrich Merz promised to create the strongest conventional army in Europe and allowed unlimited borrowing to fund defence spending.

Rheinmetall is forecasting new orders worth about €80bn for the year to June 2026. Its order backlog stood at €55bn for the previous 12 months. “It is huge numbers,” Papperger said.

The company has emerged as one of the biggest winners from the surge in European defence spending in the wake of Vladimir Putin’s full-scale invasion of Ukraine in 2022. The stock has since soared, leaving the company worth €72bn.

The rocketing demand is all but certain to continue after European nations pledged to dramatically scale up their spending in response to Russian aggression and US pressure to shoulder more of the burden within Nato.

The spending spree has led to concerns among some economists that it could result in price inflation or even price gouging by defence companies. 

Papperger said Rheinmetall had “never, ever” asked for a price mark-up to compensate for the strong inflation that followed the coronavirus pandemic. 

He said he saw no risk of a backlash against arms makers even as nations such as Germany and the UK face painful decisions about cuts to social welfare at the same time as increasing military spending. 

“I don’t feel that at the moment,” he said. “We are able to deliver . . . If you deliver, you make the customer happy — and the customer is the government.”