By Syndication Washington Post, Bloomberg · Jordan Fabian
The United States will ban entry to most non-U.S. citizens who have recently been in South Africa in response to the new coronavirus variant there, according to a White House official familiar with the plan.
It’s unclear how long the restrictions will continue.
The Biden administration will also continue restrictions on travel to the United States from Brazil, the United Kingdom, Ireland and other countries in Europe that the Trump administration planned to relax, said the official, who spoke on the condition of anonymity because the plans have not been made public.
That’s consistent with comments from White House press secretary Jen Psaki, who tweeted on Monday that “this is not the time to be lifting restrictions on international travel.”
The U.S. is warily viewing new coronavirus variants that have originated in South Africa and Brazil, as well as one recently identified in the United Kingdom.
Reuters first reported the U.S. plan to ban travel from South Africa for most non-U.S. citizens, citing officials with the Centers for Disease Control and Prevention.
Why dealmakers expect tech M&A to keep up its red-hot run
InternationalJan 25. 2021Pedestrians wearing protective masks walk past Slack Technologies Inc. headquarters in San Francisco in December 2020. Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications platform in one of the biggest technology deals of the year. MUST CREDIT: Bloomberg photo by David Paul Morris
By Syndication Washington Post, Bloomberg · Liana Baker, Katie Roof
Dealmakers say technology CEOs are pondering their dream deals after a record year for global tech M&A that saw mega-transactions in areas from chips to enterprise software.
Global volume for tech and internet mergers and acquisitions reached $470 billion in 2020, second only to the dot-com bubble of 2000, according to data compiled by Bloomberg.
Salesforce.com Inc.’s December announcement that it was buying Slack Technologies Inc. for $25 billion – the largest software deal of the year – could spur other companies to revisit their wish lists, advisers said.
“Just the visibility of that transaction, a large deal of people pursuing dream deals using their currency has resonated with others,” said Sam Britton, Goldman Sachs Group Inc.’s co-head of global technology, media and telecom. “I do think we’re going to see some similar things, maybe not of that size, but of people trying to capture their dream deals.”
Potential buyers will be watching whether the market supports the stock of the acquirers doing deals. Salesforce shares have fallen about 14% since the Slack deal, wiping $32 billion off its market cap in what could be a cautionary tale.
Other buyers fared better with less sizable transactions. Twilio Inc. saw its shares gain $4 billion in market value in October when it announced a $3.2 billion all-stock deal for customer data company Segment.
Advisers expect enterprise technology companies with market values in the range of $20 billion to $100 billion to pursue acquisitions as they angle to overtake companies such as Adobe Inc. and Salesforce, once upstart software companies that are now valued at more than $200 billion. This class of the next big acquirers could include Twilio, ServiceNow Inc., Snowflake Inc., Zoom Video Communications Inc. and Okta Inc., industry bankers said.
More mature technology companies such as SAP SE and Oracle Corp., meanwhile, may be looking for transformative deals similar to International Business Machines Corp.’s 2019 purchase of Red Hat Inc.
Big tech players must still persuade private companies to sell to them instead of going public in a strong IPO environment. The market welcomed stock debuts last year by Snowflake and Airbnb Inc. by doubling their share prices. DoorDash Inc. was rewarded with a first-day share pop of 86%.
The robust IPO market could add to M&A, especially with IPOs by blank-check companies still surging. Once public, special purpose acquisition companies, or SPACs, begin their hunt for merger targets.
“The strong IPO market doesn’t take away from M&A,” said Marco Caggiano, JPMorgan Chase & Co.’s co-head of North America M&A. “It actually spawns more SPACs, which in turn drive M&A volume.”
While the coronavirus pandemic has hurt many industries, it has shone a light on the tech space as so much of life goes virtual. CEOs got a front-row look at their IT systems during the pandemic, which could fuel IT spending for decades as companies adapt to new ways of working, said Jason Auerbach, global co-head of TMT at UBS Group AG.
“Whenever there are these kinds of shifts in tech spend, that drives M&A,” Auerbach said. “For many large-cap tech companies, if you want to continue to evolve and grow, M&A is going to continue to be the most efficient way to do it most of the time.”
With President Joe Biden’s administration still taking shape, executives will be watching for signs of how it will treat “Big Tech.” Advisers say it’s too early to know what the administration’s regulatory posture on tech deals will be.
Most bankers say they’re continuing to operate under the assumption that outside of the big four – Amazon.com Inc., Apple Inc., Alphabet Inc. and Facebook Inc. – tech companies can proceed with large deals.
One factor that would likely affect dealmaking is any change to the tax code under Biden. Tina Longfield, managing director and co-head of software at Truist, said some executives could try to push through deals ahead of that.
“There are some CEOs and founders with whom we are engaging who are thinking about capital gains taxes, and as such, have expressed a desire to get liquidity this year with the expectation they will save on tax rate as compared to next year,” Longfield said.
Even if trade tensions with China ease under Biden, the increasingly active role of the Committee on Foreign Investment in the United States in its reviews of deals won’t change, according to M&A lawyer Kenton King, a Skadden Arps Slate Meagher & Flom LLP partner.
That means cross-border deals with China will still suffer.
“I don’t see the CFIUS regime in the Biden administration pulling the brakes back on what we saw from the Trump administration,” King said. “That is here to stay for the foreseeable future.”
Some of the biggest-ever semiconductor and hardware deals were struck last year. They include: Nvidia Corp.’s $40 billion purchase of Arm Ltd.; Advanced Micro Devices Inc.’s $35 billion acquisition of Xilinx Inc.; and Analog Devices Inc.’s $21 billion deal for Maxim Integrated Products Inc.
All three are still under review. China’s antitrust regulator presents a real risk to getting further deals done, advisers to chip companies said.
Any M&A involving hardware companies in the supply chain usually means there is product and revenue in China. That triggers a regulatory review at China’s State Administration for Market Regulation (SAMR).
Companies could avoid deals even if the industrial logic makes sense to avoid two years of regulatory limbo, King said.
So far this year, one company has used the lengthy China review process to its advantage. With its sale to Cisco Systems Inc. mired in the SAMR review, Acacia Communications Inc. had grown weary of waiting and pulled out of the deal this month.
The result: Cisco added a 64% premium on top of its original July 2019 offer – and saved the deal.
WASHINGTON – One year after the coronavirus pandemic first disrupted global supply chains by closing Chinese factories, fresh shipping headaches are delaying U.S. farm exports, crimping domestic manufacturing and threatening higher prices for American consumers.
The cost of shipping a container of goods has risen by 80% since early November and has nearly tripled over the past year, according to the Freightos Baltic Index. The increase reflects shifts in consumption during the pandemic when consumers have redirected money they once spent at restaurants or movie theaters to the purchase of record amounts of imported clothing, computers, furniture and other goods.
That abrupt and unprecedented spending shift has upended long-standing trade patterns, causing bottlenecks from the gates of Chinese factories to the doorsteps of U.S. homes.
The commercial disorder is the latest blow to globalization’s finely tuned engine, capping more than a decade of financial crisis, trade wars, contagion and recession. Each shock has triggered swings in the flow of cash and goods through the $91 trillion global economy. But reverberations from the pandemic are exposing vulnerabilities in the physical plumbing of cross-border commerce that may linger, according to exporters, port officials and trade specialists.
“It’s crazy. Prices are at record highs. Multiple things are happening all at once,” said Phil Levy, an economist with Flexport, a San Francisco-based freight forwarder. “People work off of expectations. But now there’s just so much uncertainty.”
At the Port of Los Angeles one day last week, 42 ships were anchored offshore, waiting to unload their cargoes, even as every warehouse within 60 miles was already full. A shortage of dock workers amid California’s worsening coronavirus outbreak is complicating operations; inbound cargo volumes in December were more than 23% higher than one year earlier.
“Some areas of the supply chain need to be sharpened,” Gene Seroka, the port’s executive director, said. “People are a little bit on edge.”
It’s a global problem, and it may get worse before it gets better. More than one-third of the containers transiting the world’s 20 largest ports last month did not ship as scheduled, according to Ocean Insights, a data provider.
The cost of imported industrial supplies jumped 4.2% in December and is up 27% since April’s pandemic low, with manufacturers citing shortages of materials such as steel.
Shipping issues are affecting familiar brand names such as Gap, where an executive recently told investors that “port issues” were impeding operations. At WD-40, higher freight and warehousing costs lowered profit margins last quarter, Jay Rembolt, the company’s chief financial officer, told investors this month. Bang & Olufsen, a maker of music systems and televisions, said it had resorted to more expensive airfreight to compensate for a lack of seaborne options.
“These challenges have put inflationary cost pressures on our and many businesses and, as the market is anticipating, will put further inflationary pressure on transportation rates in 2021,” Shelley Simpson, chief commercial officer for J.B. Hunt Transport Services, said on a recent earnings call.
Household appliances and some clothing items have been in short supply in recent months. The price of goods arriving from China posted its largest one-month gain in more than three years last month, rising by 0.3%. Overall, prices of imported goods rose 0.9%, their largest rise since August.
By themselves, shipping cost spikes probably will have a modest effect on inflation, according to Neil Shearing, chief economist for Capital Economics in London. But they will reinforce the effects of other factors, such as oil prices and fiscal and monetary stimulus, that are expected to drive the 1.4% inflation rate higher.
“All of these temporary factors come together at the same time the market narrative is primed for a post-covid inflation surge,” Shearing said.
As the pandemic rippled around the globe last year, it interfered with typical seasonal patterns of global production and distribution. Factories closed, first in China, then elsewhere, as the world slipped into recession.
Shipping carriers initially idled vessels to match reduced demand. But as consumers stuck at home began buying desks, computers, backyard fire pits and entertainment systems – and Chinese factories resumed normal operations – Asian exporters clamored for space aboard cargo ships.
The sudden changes played havoc with supply chains that were designed to operate on “just in time” principles, bringing goods to ports when vessels were waiting to whisk them to distant customers.
The surge in demand overwhelmed the system.
Fewer ships arriving in U.S. ports meant fewer shipping containers available for the return trip to Asia. With department stores and other retailers closed by shutdowns, goods piled up at U.S. port terminals and warehouses. That made it harder for 18-wheelers to get into such facilities to pick up new loads and drop off empty containers, further clogging logistics channels.
Months later, ports and cargo carriers optimized for traditional trade flows continue to struggle with the resulting dislocations, even as shipping companies have rushed to return capacity to busy transit routes.
“It seems to be getting worse, not better,” said Nate Herman, senior vice president for policy at the American Apparel and Footwear Association. “I don’t see this ending any time soon.”
Last year’s stop-and-go global economy effectively shifted 5 million shipping containers from the first half of the year to the second half – on top of customary trade flows, said Lars Jensen, chief executive of SeaIntelligence, a Copenhagen-based consultancy company.
“It’s multiple different bottlenecks all at the same time,” Jensen said. “It’s like a train wreck in slow motion.”
At the nation’s busiest container port, officials in Los Angeles have seen cargo volumes soar and plunge in dizzying cycles. Inbound shipments fell in the first months of the pandemic before roaring back to life in August.
Average monthly import volumes in the second half of 2020 were more than 50% greater than during the first six months of the year, according to Seroka, the port’s executive director.
Because there is more demand to send goods from China to the United States than to ship in the other direction, ocean carriers – after delivering their cargoes to Los Angeles – are refusing to wait for their containers to be reloaded with U.S. exports before returning them to China.
In December, the port processed about 2 1/2 times as many empty containers headed to China as full ones.
“It is simply a matter of supply and demand,” Seroka said.
That practice has irked American farmers, who say the shippers’ refusal to bring containers into the heartland is raising their costs and causing them to lose overseas sales of soybeans, grains and lumber. A coalition of agricultural exporters wrote to Biden transition officials this month, citing “supply chain dysfunction” for supporting an ongoing Federal Maritime Commission probe of shippers’ behavior.
The World Shipping Council, representing the cargo carriers, said the industry is doing its best. But “no part of the supply chain is geared to managing the extremes currently occurring,” it said this month.
Even as the carriers rush containers to Asia, some companies in China are struggling to get their U.S.-bound products out of the country. Manufacturers of specialized products such as fireworks are paying twice per container what they were a few months ago.
“Even paying the high price, we can’t get all the containers we need. We can only get a small percentage,” said one executive in China, who spoke on the condition of anonymity to preserve relationships with Chinese shippers.
This executive fears that up to 40% of his annual production will be stranded in China. That shortfall will ripple through to the company’s U.S. distributors, lowering their profits and potentially leading to shortages for July 4.
Problems getting Asian goods through West Coast ports are crimping the rebound in U.S. manufacturing, and the situation is getting worse. In December, factories recorded “minimal gains in inventory levels and difficulties in expanding imports. Supply chains continue to struggle compared to November,” the Institute for Supply Management said in its monthly report.
The group noted that 16 industries reported that supplier deliveries were slowing and that no industry reported improvement.
James Keane, chief executive of Steelcase, told investors last month that the office furniture manufacturer was facing an “acute shortage of steel” amid ongoing shipping constraints.
“There is [a] shortage of containers on the water, and then even in domestic shipping there [are] shortages of drivers, shortages of carriers and therefore upward pressure on fleet costs,” he said.
Many companies, frustrated by soaring shipping costs, blame the problems on the ocean carriers, saying they deliberately idled vessels last year to raise prices. But while the number of “blank sailings,” or canceled routes, did rise last year, carriers have increased their total capacity, Larsen said.
On the key trans-Pacific route, he said, capacity is up 30% from one year ago. Demand has risen more.
In Los Angeles, Seroka is offering financial incentives for trucking companies to pick up and drop off their loads more quickly. The 93-minute average turnaround time should be more like 25 minutes, he said.
Seroka would also like to see the federal government take steps to make U.S. exports more competitive, balancing trans-Pacific trade.
The supply chain disruptions probably will continue until the pandemic wanes and consumer buying patterns return to normal, analysts said.
“There’s only one thing that can fix this,” Jensen said, “and that’s time.”
The UN International Holocaust Remembrance Day on January 27 is the annual UN International Holocaust Remembrance Day, to commemorate the victims of the Holocaust. Six million Jews were brutally murdered by the Nazis.
This year, due to the Covid-19 pandemic, the Embassy of Israel will hold an online Holocaust remembrance ceremony on January 27 at 10am on the Facebook page of the Embassy “Israel in Thailand”.
The ceremony will start with opening remarks by Meir Shlomo, the ambassador of Israel, followed by a message from United Nations Secretary-General António
Guterres.
The ceremony also includes the screening of “Whose child are you?”, a documentary testimony of a Holocaust survivor, Tswi Herschel, who was born in 1942 to a Jewish-Dutch family in
a small town in Nazi-occupied Netherlands. As the family had to move to Amsterdam, as part of deportation of Jews to Ghettos, concentration camps and eventually extermination camps,
Tswi’s father contacted non-Jewish Dutch friends and asked for help for his newborn son. A Protestant Dutch family took in baby Tswi, caring for him and raising him as their own child.
Tswi’s parents were deported to the extermination camp of Sobibór, where they were murdered shortly after arrival. Tswi’s grandmother, his only surviving relative, took him from his foster family after the war. Tswi grew up, got married and had two daughters. In 1986, Tswi and his family immigrated to Israel. Since 1991, Tswi is sharing his personal story with young people and adults around the globe.
Volkoviski with lyrics in Yiddish by Shmerke Kaczerginski. It was one of the best-loved songs of the Vilna ghetto in Lithuania, where the lullaby was first performed in 1943, shortly before the ghetto’s liquidation. The poignant lyrics chronicle the murder of more than 70,000 Jews in Ponar, a forest near Vilna, and lament the pain and suffering of the ghetto inmates.
The Holocaust happened more than 70 years ago and is commemorated annually in ceremonies around the
globe. Ambassador Shlomo said: “The real issue which I believe should really worry us all is the lack of knowledge, and dare I say even ignorance, about the Nazi era and the Holocaust in particular. A deficient knowledge of the history of the human race is a
perfect breeding ground for racism, discrimination and hate – and maybe the next genocide… As hard and as challenging as it is – the only effective antidote to racism, anti-Semitism and other forms of discrimination is education.”
Pedestrians wearing protective masks walk past Slack Technologies Inc. headquarters in San Francisco in December 2020. Salesforce.com Inc. agreed to buy Slack Technologies Inc. for $27.7 billion in cash and stock, giving the corporate software giant a popular workplace-communications platform in one of the biggest technology deals of the year. MUST CREDIT: Bloomberg photo by David Paul Morris
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