FT : Ex-Apple engineer brings Silicon Valley tactics to European defence tech

Ex-Apple engineer brings Silicon Valley tactics to European defence tech
Drone start-up Delian Alliance Industries mimics the vertically integrated approach taken by Tesla and Apple

A former Apple engineer who worked in the iPhone maker’s secret robotics lab has launched a start-up based in Athens focused on maritime defence, in the latest example of former Silicon Valley staffers turning to military technology.

Delian Alliance Industries is mimicking the vertically integrated approach taken by Tesla and Apple to develop autonomous weapons, including aerial and sea-based drones, as well as surveillance towers, much more cheaply than the traditional leading defence contractors.

Delian has raised $14mn in funding to expand internationally and try to challenge incumbent defence “primes” such as BAE Systems, Airbus, Rheinmetall, Saab and Leonardo.

“It is very rare when there is a time when new primes are created,” said Dimitrios Kottas, Delian’s co-founder and chief executive. “If that window existed [at any point] over the last several decades, it would be now. My prediction is that in the next decade there will be a technological race that will transform the way war is conducted in the west.”

Delian is manufacturing its own hardware, software and sensor fusion systems, rather than partnering with traditional defence groups as some other start-ups have done, so that it can move more quickly than its established competitors, Kottas said.

“Our competitor is time,” he said. “Our adversaries are developing and procuring things at speeds we cannot imagine . . . Our [national security] processes cannot support such speeds right now because they are tuned for peace time.”

Kottas is the latest example of entrepreneurs leaving more conventional tech companies to move into the defence market at a time when many countries, especially in Europe, are increasing their military spending at a time of heightened global tensions.

Anduril, a leading US defence start-up, was founded by Palmer Luckey, who previously sold his virtual reality headset company Oculus to Meta. Germany’s Helsing, which was recently valued at €12bn, is led by a biologist-turned-video games developer and an ex-McKinsey consultant, and is chaired by music app Spotify’s co-founder Daniel Ek.

Like Helsing and Anduril, Delian also drew in talent from Palantir, the data analytics group that works extensively with governments in the US and Europe as well as corporate clients.

After working in Apple’s secretive special projects group, the team most closely associated with its now-cancelled car project, Kottas moved back to his home country of Greece in 2021 to launch Delian after tensions between Greece and Turkey around the Aegean Sea began to escalate.

Delian is already selling its sensor fusion technology to the Greek army, as well as to civilian authorities for fire detection and environmental monitoring. Kottas said the start-ups’ target market was western-aligned “middle powers” that lacked the defence budget of larger nations such as the US.

While there was a “very saturated” market for expensive airborne drones, Kottas said, “the maritime domain is under-appreciated right now in the industry”.

“The use case we have in the Aegean, which is a use case of a nation defending small islands from a nearby revisionist power . . . that is very common across many nations,” he said, pointing to Asian markets such as India, South Korea and Singapore, as well as northern Europe.

Kottas said that while working in Silicon Valley he had learnt the value of so-called “moonshot” projects, which set extremely ambitious targets in order to speed technical innovation.

The company, which manufactures its products at its facility just outside Athens, recently showed off prototypes of its kamikaze-style Interceptigon unmanned autonomous systems. These involve fixed-wing drones or jet-ski-style boats carrying explosives launching from concealed locations to intercept naval or aerial attacks.

Nathan Benaich, investor at Air Street Capital, which is leading Delian’s latest funding round alongside Greece-based Marathon Venture Capital, said that the company’s integrated approach to product development was vital to creating a powerful deterrent. “Software alone is not going to protect your border and your citizens,” he said. “You really have to have integrated hardware, software and manufacturing in the same company. I don’t believe in doing a retrofit.”

FT : ECB staff accuse Christine Lagarde of running ‘unaccountable legal fortress

ECB staff accuse Christine Lagarde of running ‘unaccountable legal fortress’
Central bank at centre of row after asking elected employee representatives to spend more time doing their day jobs

The European Central Bank has been accused by members of its own staff of behaving in an “anti-democratic” way, in the latest escalation of tensions between the Eurozone’s top monetary authority and its employees.

In a letter to ECB president Christine Lagarde, seen by the Financial Times, its staff committee said the bank’s own governance failed to respect the very rule-of-law principles that she recently praised as one of Europe’s “critical comparative advantages”.

“We regret to see that these principles expressed outside the institution seem to be given little value inside the institution by its power structure,” the chair of the staff committee, Carlos Bowles, wrote to Lagarde.

The letter was sent as the ECB has so far refused to back down in a row over the Frankfurt institution’s works council, an influential group of elected employees.

The ECB has proposed forcing elected representatives to devote some of their time to their day jobs. Under German labour law, they are able to focus full time on advocating for the best interests of staff while collecting their normal salaries. However, as an extraterritorial institution, the ECB is neither subject to German labour laws nor to similar rules in other EU member states.

As such, the ECB was an “unaccountable legal fortress”, Bowles claimed in the letter.

In the four-page document, he argued that the ECB’s treatment of staff had led to “widespread complaints of favouritism, [ . . . ] high burnout rates, and the vulnerability of many colleagues working under temporary contracts”.

The row is merely the latest sign of tense labour relations at the central bank. In a survey of its employees conducted by the union Ipso earlier this year, 77 per cent of the roughly 1,400 respondents said that “knowing the right people” was key to getting ahead in the organisation, compared to just 19 per cent who believed that it does a good job of promoting “the most competent people”.

In his letter to Lagarde, Bowles argues that the ECB “is both in a situation of being an employer and a legislator,” exposing staff to a situation that threatened their freedom to “independently express their expert views”.

Bowles also accused the ECB of using its power to “undermine and even silence the only institutional counterweight within the ECB, namely the staff representation”.

The ECB said in a statement: “We are firmly committed to the rule of law and operate within a clear employment framework that is closely aligned with EU Staff Regulations and is subject to European Court of Justice scrutiny,” adding that it had won “the overwhelming majority of court cases before the European Court of Justice on the ECB employment law framework”.

The ECB has claimed its proposed changes to employee representatives’ roles, which it wants to implement by mid-2026, would be in the interests of all staff.

It says the rules would ensure staff representatives could “pursue their career path and stay closely connected to the ongoing work and public mandate” of the central bank, while advocating for staff needs at the same time.

The bosses of Europe’s services sector union EPSU and German union Verdi also wrote to Lagarde earlier this year, urging her to abandon the proposed changes.

Legal privileges and protection of works councils have been enshrined in German law for more than a century.

>>> US After Hours Summary: WHR -13% lower on earnings and possible dividend cut

After Hours Summary: WHR -13% lower on earnings and possible dividend cut; PG +0.1% names a new CEO; CLS +10.6%, AMKR +8.2%, RMBS +5.1% higher on earnings; SRPT +43% jumps as FDA recommends co remove its pause

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CLS +10.6%, AMKR +8.2%, RNGR +6.9% (also to launch industry's first hybrid double electric workover rigs), CDNS +6.7%, SSD +5.9%, RMBS +5.1%, CR +4.3%, CINF +3.3%, CASH +2%, PFG +2%, VLTO +1.5%, HIG +1.2%, NTB +0.7% (also increases dividend, new 1.5 mln share repurchase authorization), WELL +0.7% (also provides business update; also increases dividend), BYON +0.4%, CNO +0.4%, WM +0.4%, OLN +0.2%, CURB +0.1%, KRC +0.1%

Companies trading higher in after hours in reaction to news: SRPT +43% (FDA informs co that it recommends co remove its pause and resume shipments of ELEVIDYS for ambulatory individuals), CDNS +6.7% (settlement agreement, to pay BIS and the DOJ $140.6 mln), PTCT +5.3% (FDA approves Sephience to treat PKU), LDI +3.2% (founder and chairman named permanent CEO), TATT +2.5% (signs $10 mln contract with Israeli defense integrator), GL +2% (DOJ will not be taking enforcement action), NTRS +0.7% (authorizes new $2.5 bln share repurchase program), EBAY +0.6% (Trump Organization suing sellers from AMZN, EBAY, WMT), ARES +0.5% (establishes JV with Savion Equity and SHEL for solar energy), STX +0.4% (CEO also named as Board Chair), LMT +0.3% (awarded a $2.06 bln modification to a previously awarded Missile Defense Agency contract), PSX +0.2% (files mixed securities shelf offering), PFE +0.2% (premiums for Medicare part D plans expected to increase, according to WSJ), JNJ +0.2% (premiums for Medicare part D plans expected to increase, according to WSJ), DX +0.2% (files mixed securities shelf offering), CRCL +0.1% (FIS and CRCL announce new partnership), BMY +0.1% (announces creation of new biopharma co with Bain Capital), SHEL +0.1% (establishes JV with Savion Equity and ARES for solar energy), PG +0.1% (Shailesh Jejurikar to become CEO on Jan 1; current CEO Jon Moeller will become Exec Chairman), AMZN +0.1% (Trump Organization suing sellers from AMZN, EBAY, WMT), MRK +0.1% (premiums for Medicare part D plans expected to increase, according to WSJ)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BKKT -30.1% (also to sell Loyalty business; also stock offering), WHR -13% (also board recommends reduction in quarterly dividend), EXEL -12.5%, HLIT -10.6%, XPER -9.6%, MTSR -8.7%, KFRC -8.3%, NOV -6.3%, NUE -5.5%, GBFH -5.4%, SANM -4.6%, BRO -3%, UCTT -2.9%, WU -2.2%, WWD -1.7%, UFPI -1.2% (also authorizes new $350 mln share repurchase program), DYN -1.1%, UHS -0.6%, TFII -0.2%, PDM -0.1%

Companies trading lower in after hours in reaction to news: VRSN -6% (4.3 mln share offering by selling shareholders), CELC -2.4% (concurrent offerings of $150 mln of convertible notes and $75 mln of common stock), WFRD -1.3% (awarded significant contract for Trion project), UFPI -1.2% (to close Bonner, Montana manufacturing facilities), OXY -0.7% (files mixed securities shelf offering), HESM -0.6% (increases dividend), FLR -0.5% (receives final notice to proceed from Barrick on its Reko Diq Project), FIS -0.4% (FIS and CRCL announce new partnership), ALVO -0.3% (files mixed securities shelf offering), MSM -0.1% (CFO to step down, provides guidance)

WSJ : The Oddball Golf Putter Company That Private Equity Just Bought for $200 M

The Oddball Golf Putter Company That Private Equity Just Bought for $200 Million
LVMH-backed L Catterton has taken a majority stake in L.A.B. Golf

  • L Catterton, backed by LVMH, has taken a majority stake in L.A.B. Golf at a valuation of over $200 million.
  • J.J. Spaun’s U.S. Open win using an L.A.B. putter significantly boosted the company’s popularity and sales.
  • L.A.B. Golf’s putters, which start at $399, are designed to reduce torque during putting

Just over a month ago, L.A.B. Golf was a niche company that sold bizarre-looking putters. Then millions of golf fans watched J.J. Spaun use one to sink a 64-footer and win the U.S. Open.

And now private equity has scooped up L.A.B.

L Catterton, the private-equity firm backed by luxury-goods giant LVMH, has bought a majority stake in L.A.B. Golf at a valuation of over $200 million, people familiar with the matter said.

The deal represents a remarkable rise for a company that started inside a trailer and began with its founder, Bill Presse, hawking putters from the back of his car, before it grew into one of the hottest startups in golf.

L.A.B., which stands for Lie Angle Balance, has grown in popularity thanks to designs that the company says eliminate torque, the twisting force that can cause a putter’s head to rotate unintentionally. The Creswell, Ore.-based company says that its patented technology and craftsmanship make the maddening task of trying to tap a small ball into a hole much easier.

The science behind L.A.B.’s putters is also what makes them some of golf’s most peculiar looking products. The putters feature screws that vary in size and weight on the bottom that give them a distinct appearance—and the balance that players swear by. More and more top pros have adopted them in recent years, and in any given week these days, about a dozen PGA Tour players are using an L.A.B. putter.

After Spaun’s victory, demand for the putters swelled from everyday players eager to level-up their games. The company sold about 130,000 units last year, and is on pace to roughly triple that in 2025.

The putters are far from cheap. They start at $399 on L.A.B.’s website, and modifications can send the price over $1,000.

L Catterton, whose investments have included Birkenstock shoes, Restoration Hardware and Peloton, focuses on consumer brands. The firm has recently invested in private-jet company Flexjet and exercise chain Solidcore.

The people familiar with the deal said L.A.B. CEO Sam Hahn will remain with the company.

WWD : The Libertine Team Opens Chateau Royale in Greenwich Village

The Libertine Team Opens Chateau Royale in Greenwich Village
The French restaurant and bar occupies a two-floor house on Thompson Street.

There’s French dining, and then there’s New York French dining. Chateau Royale is enthusiastically the latter.

“We knew we wanted to be something grand, and also something that was a little bit more American — specifically New York-leaning,” says co-owner Cody Pruitt. The restaurateur is opening the doors to Chateau Royale in the Greenwich Village with business partner Jacob Cohen, two years after they debuted their popular West Village bistro Libertine on Greenwich Street. Feeling that they had “more to say,” they began looking for a space for their next concept, landing on a cozy two-floor property on a leafy stretch of Thompson Street, just north of Houston Street.

“ Libertine really was our way of emphasizing what a bistro actually is; it’s not just a restaurant without a tablecloth, it’s a regional French restaurant,” Pruitt says. “We wanted it to be transportive from one place to another. Whereas here, we wanted to do something more temporally based,” he adds. “There’s such an amazingly rich history of French restaurants in New York that are not authentically French, but very much they’re authentically New York French.”

Pruitt cites nearby restaurants like Raoul’s and Balthazar as inspiration for the concept, which is rooted in grand New York dining nostalgia without the kitsch. “A lot of what we want to serve here and our design choices were inspired by these places that lasted decades,” Pruitt says. “And we wanted to lean into the time element of nostalgia for transportive-ness, instead of just removing ourselves from the West Village and going to Paris.”

Speaking of nostalgia: former tenants in the space have included a live music venue, a Mexican restaurant, an Italian restaurant, a live poultry market and a carriage house. The team reimagined the space for its next chapter over the past year and a half, retaining only the original flooring and “bones” of the building.

Chateau Royale houses two distinct but inherently linked dining concepts. On the ground floor, the 30-seat bar room is sultry with low lighting and warm wood tones. Oxblood banquettes and bar stool seating set the scene for casual dinner and cocktails; upstairs, a white-walled, more formal dining experience awaits. Picture-frame windows throughout the room overlook the tree-lined block, and a large pendant light extends down from the room’s skylight. The overall design is qThe kitchen is led by executive chef Brian Young, formerly chef du cuisine at Le Bernadin. While several dishes are shared between the two spaces — including the foie gras tourcheon and escargots bourguignon — the downstairs bar menu features more casual fare, like a burger and hot dog homage to Harry’s Bar in Paris. Upstairs, the menu is built out with traditional French mains like lobster thermidor and Dover sole à la Grenouille, an homage to the iconic and now-closed uptown French restaurant.

“A lot of what we’re offering in terms of cuisine is referential or inspired by dishes that were popular for decades, and then for different reasons, they are no longer popular or as ubiquitous as they were,” says Pruitt, citing dishes like duck à l’orange and chicken cordon bleu.

The main bar room is anchored by a list of 15 cocktails inspired by classic Paris bars including the Ritz and Harry’s. Upstairs, drinks are poured and presented table side from a mobile brass and mahogany bar cart. uietly elegant and minimalist, with thoughtful details throughout each floor.

Chateau Royale will be open for dinner seven days a week, with weekend brunch service imminent. The hope is that the restaurant will become a home-away-from-home for its guests.

“If a neighbor comes in and gets a burger downstairs or a glass of wine before going home after work, fantastic. If they treat upstairs as a special occasion restaurant, fantastic,” Pruitt says. “We want to be flexible and open and hospitable in as many ways as we can.”

WSJ : Medicare Part D Drug Plan Premiums Set to Rise

Medicare Part D Drug Plan Premiums Set to Rise
Trump administration aims to soften the blow by negotiating with insurers

  • Medicare drug plan premiums are expected to rise significantly next year due to rising costs and regulatory changes.
  • A subsidy program that shielded seniors from rising monthly bills will be cut by about 40% in 2026.
  • The premium increase will affect millions of seniors and may push more enrollees into Medicare Advantage plans.

Premiums for Medicare drug plans are set to increase sharply next year, due to rising costs, regulatory changes and cutbacks to a subsidy program.

The subsidy program, which sent extra federal funds to the private insurers that offer the drug benefit—known as Part D—had largely shielded seniors from rising monthly bills in 2025.

It pumped an extra $6.2 billion of federal payments into the Part D plans this year, according to a Medicare official. The Trump administration is set to cut spending on that program by about 40% in 2026.

Officials with the Centers for Medicare and Medicaid Services, which falls under the umbrella of the Department of Health and Human Services, said they are seeking to blunt the impact of increases in negotiations with insurers about the companies’ bids for next year’s Part D plans. And they are maintaining part of the subsidy initiative, which was launched by the Biden administration and had come under criticism by Republicans.

Medicare officials said premiums are still expected to go up “a lot.”

“This is all about trying to maintain affordability against a massively increasing backdrop of expense,” said Chris Klomp, the head of the Center for Medicare. But, he said, the Trump administration felt that maintaining the full subsidy program would have benefited a handful of insurers and cost an “enormous, excess amount of taxpayer money.”

The premium increase, which will vary widely depending on the plan, will hit a politically sensitive constituency of millions of seniors who purchase the plans, which cover drugs, alongside the traditional Medicare medical benefits. It may also push more Medicare enrollees into Medicare Advantage plans, the private-insurer version of Medicare, which wrap in drug coverage.

Medicare officials didn’t release expected average premium costs, but said the subsidies that remain would save Medicare enrollees with drug plans $13.50 a month on average off of the higher rates.

Insurers have been flagging higher patient drug spending as an issue across all of their lines of business, and their higher bids for the Part D plans likely reflect that rising expense. But insurers also are facing higher costs and more risk on the Medicare drug plans because of a Part D program redesign mandated by the 2022 Inflation Reduction Act. The redesign reduced some Medicare enrollees’ out-of-pocket costs for medications, among other changes that largely kicked in this year, but required insurers to shoulder more of the costs.

This year, the extra subsidies to stabilize stand-alone Part D plan premiums, which was billed as a way to help plans gradually shift to the redesign, added an extra $15 a month in federal payments to insurers per Part D plan. And it capped the year-over-year overall average premium increase at $35 for 2025, along with limiting the insurers’ risk of losses.

For 2026, the slimmed-down subsidies program will add just $10 a month in subsidies, cap the year-over-year increase at $50, and get rid of the new limits on insurers’ risk of losses, Medicare officials said.

The extra subsidy program took effect in 2025 and was originally supposed to last three years. Without the extra federal subsidies, average monthly premiums for basic Part D plans would have been between $42 and $46.50 this year, according to an estimate from consulting firm Avalere Health. Instead, the average premium for those plans was around $36, the firm calculated—roughly an 18% difference.

“Premiums would have spiked pretty substantially” this year without the project, said Kylie Stengel, a principal at Avalere.

With the extra subsidies in place, average premiums—for all stand-alone Part D plans, not just the skinnier basic ones—were roughly flat between 2024 and 2025, according to KFF, a health-research nonprofit.

>>> US Close Dow -0.14% S&P +0.02% Nasdaq +0.33% Russell -0.19%

Closing Market Summary: mixed finish after fresh record highs
Opening gains fueled by the announcement of a trade deal between the U.S. and the EU quickly pushed the S&P 500 and Nasdaq Composite to new all-time high levels, but a lack of major developments on any front stalled momentum and saw the major averages finish mixed.

At its peak, the S&P 500 set a new intraday record at 6401.07. After spending much of the afternoon with a modest loss, the index closed up 1.13 points to 6,389.77, squeaking out a new record closing high. The Nasdaq Composite, for its part, set an intraday record at 21,202.18. The closing level of 21,178.58 was also a new closing record high. The DJIA underperformed with a loss of 0.1% for the day.

The trade deal between the U.S. and EU will feature a 15% tariff on EU imports with 0% carveouts for certain products like aircraft and component parts, semiconductor equipment, and certain raw materials.

The deal also includes a provision whereby the EU will invest $600 billion in the U.S. and purchase $750 billion of U.S. energy.

The latter point, in conjunction with a 2.4% increase in crude oil prices to $66.75 per barrel, helped the energy sector (+1.0%) close as the day's top performer.

Despite a strong start, the consumer discretionary (+0.7%) and information technology (+0.8%) sectors were the only other sectors to finish in positive territory.

A strong start to the week for chipmakers underpinned the tech gains, with the PHLX Semiconductor Index closing up 1.6%, aided by the EU trade deal carveout for semiconductor equipment.

The consumer discretionary sector was bolstered by its largest components. Amazon (AMZN 232.79, +1.35, +0.6%) traded higher ahead of its earnings report on Thursday. Tesla (TSLA 325.59, +9.53, +3.0%), meanwhile, has recouped almost all of its losses from last Thursday, when the stock fell 8.2% after reporting lackluster Q2 earnings. The stock outperformed today on the back of news that Tesla struck a $16.5 billion agreement for Samsung Electronics to manufacture its AI6 chips.

The other eight S&P 500 sectors spent the majority of today's session trading with losses that steadily broadened throughout the day. Early breadth figures slightly favored advancers but selling interest picked up throughout the session. Decliners outpaced advancers by a nearly 2-to-1 ratio on the NYSE and a nearly 3-to-1 ratio on the Nasdaq.

While today's gains were limited by a lack of headlines, this week will see nearly 38% of the S&P 500 by market cap report earnings (including four "Magnificent 7" names), alongside a trove of economic data and the potential for a trade agreement between the U.S. and China. Trade delegations from the U.S. and China met for trade talks today in Stockholm, Sweden.

Separately, U.S. Treasuries began the week on a lower note, lifting the 10-yr yield back above its 50-day moving average (4.406%). Today's 2-yr note auction met decent demand, but the 5-yr note sale was a bit worse, and both auctions saw below-average foreign demand

The 2-year note yield settled up two basis points to 3.88%, and the 10-year note yield settled up three basis points to 4.42%.
  • Nasdaq Composite: +9.7% YTD
  • S&P 500: +8.6% YTD
  • DJIA: +5.4% YTD
  • S&P 400: +2.9% YTD
  • Russell 2000: +1.2% YTD

>>> Whirlpool misses by $0.34, misses on revs; guides FY25 EPS below consensus,

Whirlpool misses by $0.34, misses on revs; guides FY25 EPS below consensus, reaffirms FY25 revs guidance; Board recommends reduction in quarterly dividend (97.86 -1.88)
  • Reports Q2 (Jun) earnings of $1.34 per share, excluding non-recurring items, $0.34 worse than the FactSet Consensus of $1.68; revenues fell 5.4% year/year to $3.77 bln vs the $3.85 bln FactSet Consensus.
  • Co issues guidance for FY25, sees EPS of $6.00-8.00, excluding non-recurring items, vs. $8.96 FactSet Consensus and vs. $10.00 prior guidance; sees FY25 revs of $15.80 bln vs. $15.63 bln FactSet Consensus.
  • Board is recommending reduction in quarterly dividend rate to $0.90 per share from $1.75 per share, totaling $5.30 per share for 2025 and annualized rate of $3.60.
  • "As expected, the second quarter continued to be impacted by competitors stockpiling Asian imports into the U.S. Despite this, we are well positioned in North America with a robust pipeline of new products, the industry's leading U.S. manufacturing footprint, and favorable housing demand fundamentals."

>>> Bristol-Myers and Bain Capital announce the creation of a new independent bi

Bristol-Myers and Bain Capital announce the creation of a new independent biopharmaceutical company focused on developing new therapies for autoimmune diseases that address significant unmet needs of patients
  • The newly formed company launches with five immunology assets in-licensed from BMS and a $300 million financing commitment that was led by Bain Capital.
  • The NewCo has a broad pipeline consisting of three clinical-stage and two Phase 1-ready investigational medicines that each target promising mechanisms in autoimmune diseases. The most advanced assets in the NewCo's portfolio are afimetoran, an oral, potential best-in-class TLR7/8 inhibitor that is currently being studied in a Phase 2 clinical trial for systemic lupus erythematosus (SLE), and BMS-986322, an oral TYK2 inhibitor, which successfully established proof-of-concept in a positive plaque psoriasis Phase 2 trial. Other licensed assets include BMS-986326, a novel, potential best-in-class, IL2 fusion protein that is currently being studied in Phase 1 clinical trials for SLE and atopic dermatitis, and BMS-986481 and BMS-986498, two Phase 1-ready biologics targeting the IL18 and IL10 pathways respectively.
  • The assets licensed to NewCo reflect the strength of BMS's scientific innovation and hold promise to address unmet needs for patients with autoimmune diseases. As part of the agreement, BMS will retain a nearly 20 percent equity stake in NewCo and will be entitled to royalties and milestones tied to the success of each asset. Robert Plenge, MD, PhD, Executive Vice President and Chief Research Officer at BMS, will also serve on NewCo's Board of Directors. This transaction reflects BMS's strategic shift in Immunology research to focus on assets that have the potential to reset the immune system and promote tissue repair. It also further demonstrates the company's sharpened strategy to invest in areas where BMS is best positioned to lead, while enabling the continued development of promising medicines.

FT : European electricity grids turn money into power

European electricity grids turn money into power
Grid builders, given their role in the energy transition, are poised for rapid growth in both assets and earnings

One may be an accident and two a coincidence, but three is most definitely a trend. Spanish utility Iberdrola last week joined the UK’s National Grid and Belgium’s Elia in raising money to finance new investments in electricity grids. The group’s €5bn equity raise will not be the sector’s last.

Electricity networks in Europe and the US need huge amounts of investment. In Europe, grids tend to be older than those elsewhere. And the continent’s commitment to clean energy — which means more renewable power, but also more electric vehicles and heat pumps — entails big increases in transmission and distribution capacity. 

Overall, European networks will attract €800bn of capital expenditure between 2024 and 2033, Goldman Sachs analysts estimated last year, sharply increasing the asset base on which their regulated returns are calculated. Iberdrola reckons its network assets will increase from more than €51bn at the end of this year to over €90bn by the end of 2031. That’s a 10 per cent compound annual growth rate. The UK and US account for a big chunk of the new investments. 

Some utilities will opt for fresh equity because they already run a tight financial ship. Cutting dividends — another way of generating financial headroom — is unpopular with investors in a sector that has traditionally been bought for its defensive qualities and high yields. Currently, Iberdrola’s net debt to ebitda ratio is 3.3 times, according to Mediobanca. While financial headroom depends on lots of other metrics, too, such as how risky the underlying business is, other integrated groups such as SSE and E.ON are more highly geared, on RBC numbers. 


The good news is that raising equity to fund growth is not unpopular with investors. National Grid’s huge £7bn rights issue last year caused the stock to crash, but it has since dusted itself off nicely.

That ought to be especially true for Iberdrola, which thinks regulators will allow it to set tariffs for its networks such that it makes a nominal post-tax return of 9.5 per cent on the new money it has raised. That allowed it to sell shares in an accelerated bookbuilding at a discount of less than 5 per cent to the previous day’s closing share price last week; no mean feat considering the utility’s stock has performed strongly this year.


The appeal of companies that build electricity networks in Europe is not yet reflected in their shares, which typically trade at a pedestrian mid-teens multiple of expected earnings. Utilities in general are defensive, with long-term investments and returns which are set by regulators. But electricity grid builders, given their role in the energy transition, are poised for rapid growth in both assets and earnings. That’s a powerful combination.