Pension plans… As we reported last Thursday, steeply rising Pension Benefit Guaranty Corp. premiums are forcing pension plan sponsors to get more serious than ever about funding their plans.
One result of moving closer to a fully funded plan is that the sponsor can afford to derisk a greater portion of the plan’s assets. Investing in fixed-income instruments is the most straightforward way to do that, but a plan with a low funded status probably has to retain significant risk. Read article.
Mergers and acquisition in China… “We are on a wild ride,” Tom Mangas, the boss of Starwood, an American hotel group that owns the Westin and Sheraton brands, wrote to employees this week. He was referring to the bidding war over Starwood between Marriott, another American hotel operator, and a group led by Anbang, a Chinese insurer. Anbang this week first raised its offer to $14 billion, and then abandoned its pursuit of Starwood altogether. But Mangas could just as well have been talking about the wave of China-led mergers and acquisitions that is sweeping over the world economy.
Anbang’s volte-face notwithstanding, Chinese firms with little international experience and lots of debt have emerged as the biggest buyers of global assets. They have announced nearly $100 billion in cross-border M&A deals this year, already more than their $61 billion of foreign acquisitions last year (see chart, below). As the latest twist in the Starwood saga shows, announcing deals is not the same as closing them. Between losing out to other bidders and rejection by regulators, China’s investment tally could fall. Nevertheless, the trend is unmistakable. In recent years China has consistently accounted for less than a tenth of announced cross-border M&A deals; this year its share is nearly a third. Read article.
Are insurers looking closely enough at the implications of a warming planet?
With many pension plans too low-funded to justify aggressive fixed-income investment, lump-sum buyouts and annuities are popular derisking strategies.
China’s global investment spree is fueled by debt.
Continuing access control weaknesses could allow unauthorized users to gain access to taxpayer data, a government watchdog says.
The latest example of consolidation in the airline industry will make Alaska the fifth-largest U.S. carrier and increase its West Coast presence.
The weak factory data are another indication that U.S. economic growth moderated further at the turn of the year.
The $1.2 billion takeover would combine two companies that compete with wireless networking giant Cisco Systems.
A Deloitte poll finds only 29.3% of organizations use analytics to mitigate supply chain fraud and financial risks.