Volvo suffers $1bn impairment charge over tariffs
Stockholm — Sweden-based Volvo Cars is booking an impairment charge of 11.4-billion kronor ($1.2bn) in the second quarter related to its ES90 and upcoming EX90 models, due to tariffs and launch delays, it said on Monday.
The group, which is controlled by China’s Geely Holding, said it was unable to sell its Volvo ES90, which is built in China, profitably in the US due to import tariffs, while profit margins for the same model are also under pressure in Europe for the same reason.
“The charge primarily reflects adjustments in expected volumes and planned lifecycle profitability associated with the platform for the EX90 and ES90 cars,” it said.
The impairment charge also reflects significant launch delays in the past and subsequent additional development costs, it said.
Out of the total amount, 4-billion kronor is estimated to affect cost of sales and the majority of the remaining amount affects the research and development line in the financial reporting.
Volvo Cars, which is due to publish second-quarter results on July 17, said the effect on net income in the period will be 9-billion kronor. Reuters
EC: Italy UniCredit conditions could breach EU law
Brussels — The European Commission has told Italy that imposing certain conditions on UniCredit’s planned bid for Banco BPM could breach EU law, it said in a statement on Monday.
In a letter sent to Rome setting out its preliminary view, the European Commission said that a decree issued by the Italian prime minister’s office on April 18 imposing certain obligations on the merged entity may constitute a breach of EU merger regulations and other provisions of EU law. Reuters
Britain’s CityFibre to fund network investment
London — British fibre broadband network CityFibre said on Monday it had agreed £2.26bn of new finance from its shareholders and existing lenders to fund network investment and acquire smaller rivals.
“CityFibre is key to the consolidation in this sector,” CEO Greg Mesch told reporters.
Secondary, he said, the funds would accelerate the pace at which it could connect customers to its network. “We’re already at 50,000 orders a month now,” he added.
CityFibre has built Britain’s third-largest broadband network after BT and Virgin Media O2, selling fibre connections via retail providers including Vodafone, TalkTalk and its newest customer, Sky. Reuters
Broadcom pulls out of microchip plant deal in Spain
Madrid — US chipmaker Broadcom has pulled out of plans to invest in a microchip plant in Spain as talks with the government have broken down, news agency Europa Press reported on Sunday citing unidentified sources.
Spain’s digital transformation ministry and Broadcom did not immediately respond to requests for comment.
The Europa Press report did not say why the talks had broken down.
The decision will be a blow for Spain’s ambition to become a relevant player in the microchip industry in Europe. The government has previously said it would allocate about €12bn for the semiconductor and microchip industry, using some of the EU’s pandemic relief funds. Reuters
China’s Central Bank in $195bn repo operations
Shanghai — China’s central bank said on Monday it would conduct 1.4-trillion yuan ($195bn) of outright reverse repurchase agreements on Tuesday.
The People’s Bank of China (PBOC) said the repo operations aimed to “keep banking system liquidity reasonably ample”. The tenors of the repos will be three and six months. Reuters
China approves Ansys deal with US firm Synopsys
Beijing — China’s market regulator has conditionally approved the acquisition of simulation software company Ansys by US software firm Synopsys, the state administration for market regulation said on Monday.
The approval comes after the US lifted restrictions on exports to China for chip design software developers earlier this month, allowing companies, including Synopsys, to restore access to their software and technology for Chinese customers.
The Chinese regulator said it approved the deal based on restrictive commitments submitted by the companies, requiring the merged entity to fulfil several obligations. Reuters
Ashmore’s Q4 assets rise on emerging markets
Bengaluru — Wealth manager Ashmore reported a rise in its fourth-quarter assets under management on Monday, benefiting from emerging market equities outperforming developed markets as investors shifted away from US assets amid a weaker dollar.
Investors are starting to shift money out of heavily weighted US positions into cheaper assets, including those in emerging markets, Ashmore said, due to uncertainty over US tariffs.
“Emerging markets continue to outperform developed world equity and bond markets, in part due to the ongoing weakness in the US dollar,” CEO Mark Coombs said in a statement.
The dollar has been battered by US President Trump’s erratic tariff policies. Reuters
Waters Corporation to merge in $17.5bn deal
Bengaluru — Waters Corporation will merge with Becton, Dickinson and Company’s Biosciences & Diagnostic Solutions business in a deal valued at about $17.5bn, the companies said on Monday.
The deal is structured as a so-called reverse Morris trust, which allows a company to avoid a big tax bill by spinning off a unit that it wants to divest while simultaneously merging it with another company.
The combined company’s 2025 revenue is expected to be about $6.5bn. Reuters
US publisher McGraw Hill targets $4.2bn in IPO
Bengaluru — US publisher McGraw Hill is targeting a valuation of $4.2bn in its IPO, the company said on Monday, adding to a recent line up of public market hopefuls that are looking to tap an improvement in investor sentiment.
Activity in the US IPO market has seen an uplift in recent months as the trade policy confusion settles with investors flocking to new listings of companies such as stablecoin issuer Circle Internet Group and Chime Financial. Columbus, Ohio-based McGraw Hill is looking to raise up to $537m from 24.39- million shares priced at $19-$22 apiece. Reuters
Kenvue names interim CEO after Mongon steps down
Bengaluru — Tylenol maker Kenvue’s CEO and board member Thibaut Mongon had stepped down, it said on Monday and named company director Kirk Perry as interim CEO.
The company, which was spun off from Johnson & Johnson in 2023, has been under pressure from activist investors to boost performance, particularly in its skin-health and beauty unit, which includes brands such as Neutrogena and Aveeno.
“The board’s strategic review is under way, and we are considering a broad range of potential alternatives, including ways to simplify the company’s portfolio and how it operates," said board chair Larry Merlo. Reuters
Indonesia weighs US energy imports on tariff rise
Jakarta — Indonesia’s plan to increase energy imports from the US will hinge on the lowering of tariffs, the country’s energy minister Bahlil Lahadalia said on Monday, according to a report by news website Bloomberg Technoz.
Southeast Asia’s largest economy Indonesia is facing a 32% tariff on goods exported to the US from August 1. Reuters
Musk makes U-turn on Tesla and xAI merger
Bengaluru — Elon Musk said on Monday he does not support a merger between his electric vehicle maker Tesla and his start-up xAI, which owns the Grok chatbot and competes with the likes of OpenAI's ChatGPT.
In response to a user post on X that asked Tesla investors if they supported a merger between the two companies, Musk replied “No".
On Sunday, Musk said he would ask Tesla shareholders to vote whether Tesla can invest in xAI, after earlier saying “it would be great" if Tesla could do so.
Tesla and xAI did not immediately respond to Reuters' requests for comment. Reuters
Wizz Air shifts focus to European markets
Bengaluru — Low-cost carrier Wizz Air said on Monday it would exit its Abu Dhabi operations and suspend all locally based flights from September due to operational challenges and geopolitical developments in the Middle East.
Wizz Air will focus on its core Central and East European markets, as well as countries such as Austria, Italy and the UK, it said.
“Supply chain constraints, geopolitical instability, and limited market access have made it increasingly difficult to sustain our original ambitions," Wizz Air CEO Jozsef Varadi said in a statement. Reuters
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