Financial Times Europe - 10.03.2020

Tuesday10 March 2020 ★ 11

The Financial Times Limited 2020© Week 11

A spate of deaths at Australian mines

has sparked a crackdown and a public

backlash that threaten a sector that is

forecast to generate A$150bn ($99bn)

in exports this year. Cost-cuts after the

2013 downturn have led to claims that

miners have put production over safety.

AnalysisiPAGE 12

Deaths spark safety crisis

in Australia mining sector

O RT E N C A A L I A J A N D T I M B R A D S H AW

LONDON

Elliott Management nd a Twitter aveh

agreed a ceasefire that will seeJack

Dorsey eep his post as chief executivek

of the technology group, while the com-

pany prepares a $2bn share buyback

programme partly funded by private

equity firmSilver Lake.

ButMrDorseyfacesatougherchallenge

to justify his dual roles as chief of both

Twitter andSquare, with stiffer per-

formancetargetsinuserandadvertising

growth and closer board scrutiny of his

role.

Twitter’s shares were up 1 per cent in

early trading on Wall Street yesterday,

in the middle of a broader stock market

fall driven by concerns about oil prices

andthecoronavirusoutbreak.

Elliott, an activist hedge fund that

owns a stake of more than 4 per cent in

Twitter, has named two directors to the

company’s board: Elliott partnerJesse

Cohn nd Silver Lake co-chief executivea

Egon Durban. A third independent

director specialising in deep technology

and artificial intelligence will also be

added.

The share buyback will be funded in

part by $1bn from Silver Lake, which

will buy Twitter’s convertible bonds

maturing in 2025, as well as by Twitter’s

cashonhand.

“Twitter serves the public conversa-

tion, and our purpose has never been

more important,” Mr Dorsey said yes-

terday. “Silver Lake’s investment in

Twitter is a strong vote of confidence in

ourworkandourpathforward.”

MrDorseywillremainaschiefdespite

his leadership being a sticking point for

Elliott. The activist had pushed for

MrDorseytoberemovedaschief,partly

prompted by a high turnover rate

among some seniorexecutives and by

the entrepreneur’s plans to spend up to

sixmonthsinAfricatoexploreopportu-

nities in cryptocurrencies. Mr Dorsey

latersaidhewouldreconsiderthetrip.

Twitter said a new five-person com-

mittee of directors would “build on the

board’s regular evaluation of Twitter’s

leadership structure”, including succes-

sionplanningforMrDorsey.

Lexpage 10

Twitter and activist Elliott strike

board deal that keeps Dorsey at helm

to adjusted earnings per share in the

firstfullyearaftertheacquisition.

The combined company will be the

world’s biggest commercial insurance

broker,accordingtoInsuranceInforma-

tion Institute, with revenues of $19bn

based on 2018 figures. That would put it

ahead of Marsh & McLennan, with reve-

nuesofjustunder$17bn.

John Haley, Willis Towers Watson’s

chief, was due to retire next year but,

following the deal, will become execu-

tive chairman of Aon,responsible for

growth and innovation. Mr Case and

Christa Davies, Aon’s chief financial

officer,willretaintheirpositions.

Lex age 10p

would let the companies be more inno-

vativeandimprovetheirdataanalytics.

Three-quarters of the savings will

come from the “consolidation of busi-

ness and central support functions”,

with the rest coming from technology

andrealestate.

Willis Towers Watson shareholders

will receive 1.08 Aon shares for every

share they own. That values Willis Tow-

ers Watson’s equity at $30bn, a 16 per

centpremiumtoFriday’sclosingprice.

WillisTowersWatsonshareshadbeen

hit hard by the recent market volatility,

falling by a tenth since they reached an

all-timehighof$220lastmonth.

Aon said the deal would be accretive

WillisTowersWatsonlastyear,saidthat

there would be $800m of synergies by

combining the two groups, which have

head offices just metres apart in central

London.

However,Greg Case, Aon’s chief exec-

utive, insisted that cost reduction was

“not the objective” of the deal, saying

that it was about being more capable “in

addressingclientneed”.

He highlighted cyber threats and a

growing urgency to protect intellectual

property as two areas in which the com-

bined group would be stronger than the

separatecompaniesweretoday.

“We have distinctive capabilities,” he

said, adding that the combination

O L I V E R R A L P H— LONDON

Aon s to buyi Willis Towers Watson orf
$30bn in an all-share deal that will
combine the world’s second and third-
largest insurance brokers into a new
industryleader.
The deal marks the latest stage in the
long-runningconsolidationoftheinsur-
ance broking industry, and throws up a
challenge toMarsh & McLennan, which
until now has been the world’s number
one in the sector by revenues. It comes a
year after Marsh & McLennan com-
pleted the acquisition ofJardine Lloyd
Thompson na£4.3bntie-up.i
Aon, which had considered a bid for

Aon to buy Willis Towers Watson

3 Insurance brokers link 3 $30bn deal forms world leader 3 Marsh & McLennan challenged

The new

company

will be the

world’s

biggest

commercial

insurance

broker

Companies / Sectors / People

Companies
7-Eleven........................................................ 14
AB InBev...................................................... 20
Aker BP........................................................ 20
Alphabet....................................................... 12
Amazon......................................................... 14
Anadarko...................................................... 13
Anglo American........................................ 12
Anheuser-Busch InBev......................... 12
Antero Resources....................................
Aon.............................................................10,
Apache.......................................................... 20
BASF................................................................ 13
BHP.................................................................. 12
BOK Financial............................................ 13
BP...........................................................3,13,
Bank of America...................................... 12
Bank of America..................................... 13
Barclays Bank.............................................. 7
Berkshire Hathaway.............................. 13
Betfred.......................................................... 20
Bridgewater Associates......................... 9
Cabot Oil & Gas...................................... 20
Cadence Bancorp.................................... 13
Cairn Energy............................................. 20
California Resources.............................. 19
Cambridge Analytica.............................. 4
Casino............................................................ 20
Central Group............................................ 14

Charoen Pokphand................................ 14

Chesapeake................................................. 19

Chicago Mercantile Exchange......... 19

Cineworld.................................................... 20

Cisco................................................................ 12

Citibank......................................................... 12

Crédit Agricole.......................................... 13

Cullen/Frost Bankers............................. 13

Dewan Housing Finance..................... 12

Diageo............................................................ 12

Diamondback Energy.....................13,

Dontzin Nagy & Fleissig..................... 14

Dow.................................................................. 13

EOG.................................................................. 13

Elliott Management...................10,11,

Energean Oil & Gas.............................. 20

Eni..................................................................... 13

Equinor.......................................................... 13

Euronav......................................................... 13

ExxonMobil..............................................3,

Facebook..................................................4,

Frontline........................................................ 13

Gazprom.......................................................... 3

Glencore........................................................ 12

Global City Theatres............................ 20

H2O.................................................................. 13

HC2.................................................................. 14

Harbert Management Corp’n.......... 14

Harbinger..................................................... 14

Hess................................................................ 20

Homeplus..................................................... 14

Indonesia Stock Exchange................ 19

Intesa Sanpaolo...........................10,13,

JPMorgan................................................12,

Jardine Lloyd Thompson..............10,

Kirin.................................................................. 12

Korea National Oil Corporation......

Laredo Petroleum................................... 19

LightSquared............................................. 14

London Stock Exchange...............10,

Lundin Petroleum.................................. 20

LyondellBasell............................................ 13

MG Capital...................................................

Marathon Oil............................................. 20

Marsh & McLennan..........................10,

Metro.............................................................. 14

Microsoft....................................................... 12

Minnesota Wild......................................... 14

Natixis............................................................. 13

Noble Energy............................................ 20

Oasis Petroleum....................................... 19

Occidental Petroleum......................13,

Parsley Energy.......................................... 13

Pioneer Natural Resources................ 13

Premier Oil......................................10,13,

PwC.................................................................. 12

Qatar Investment Authority............... 7

Rallye............................................................. 20

Range Resources..................................... 19

Refinitiv......................................................... 10

Rio Tinto....................................................... 12

Rosneft..................................................3,10,

Royal Caribbean Cruises.................... 20

Royal Dutch Shell...................3,10,13,

Ryanair.......................................................... 20

Saudi Aramco.............................................. 3

Schlumberger............................................ 20

Sensei............................................................. 14

Shufersal....................................................... 14

Siam Makro................................................. 14

Silicon Valley Bank................................. 12

Silver Lake..............................................10,

Société Générale...............................13,

Sonae.............................................................. 14

Square............................................................. 11

State Bank of India................................ 12

Suntory.......................................................... 12

TCC Group.................................................. 14

TGS-Nopec................................................. 20

TechnipFMC.............................................. 20

Tesco.............................................................. 14

Texas Capital Bancshares.................. 13

Trigo............................................................... 14

Tullow Oil.................................................... 20

Twitter...............................................10,11,

UBI Banca..................................................... 13

UniCredit...................................................... 10

Vale.................................................................. 12

Vopak.......................................................13,

Wells Fargo...........................................12,

Westlake........................................................ 13

Whiting Petroleum................................. 19

Whole Foods.............................................. 14

William Hill................................................. 20

Willis Towers Watson......................10,

Xetra............................................................... 19

Yes Bank....................................................... 12

Sectors

Airlines.......................................................... 20

Banks...................................7,10,12,13,14,

Chemicals..................................................... 13

Energy.......................................3,4,10,19,

Financial Services..............................12,

Financials.......................................7,13,14,

Food & Beverage........................12,14,

Healthcare..................................................... 9

Insurance.................................................10,

Media.........................................................4,

Mining............................................................. 12

Oil & Gas.....................1,3,8,10,11,13,19,

Retail........................................................14,

Shipping........................................................ 13

Support Services...............................14,

Technology......................4,10,11,12,14,

Travel & Leisure...............................14,

People

Bezos, Jeff................................................... 14

Boath, Richard............................................. 7

Buffett, Warren......................................... 13

Case, Greg..............................................10,

Cohn, Jesse............................................10,

Dalio, Ray....................................................... 9

Davies, Christa........................................... 11

Dorsey, Jack..........................................10,

Duke, Betsy................................................. 14

Durban, Egon........................................10,

Falcone, Philip........................................... 14

Fredriksen, John....................................... 13

Haley, John.................................................. 11

Henry, Mike................................................. 12

Jenkins, Roger............................................. 7

Kalaris, Tom.................................................. 7

Kapoor, Rana.............................................. 12

Lewis, Dave................................................. 14

Niinami, Takeshi....................................... 12

Noski, Charles............................................ 14

Pichai, Sundar............................................ 12

Quigley, James.......................................... 14

Robbins, Chuck......................................... 12

Ryan, Tim..................................................... 12

Scharf, Charlie........................................... 14

Sechin, Igor.................................................. 11

Smith, Brad.................................................. 12

Staveley, Amanda..................................... 7

Varley, John.................................................. 7

Wadhawan, Kapil..................................... 12

Walker, David............................................... 7

Cashier-free shops mazon sells otherA

retailersits Just Walk Out tech— REPORT, PAGE 14

To the coreNon-stop rate cuts will hit

smaller banks the hardest— INSIDE FINANCE, PAGE 12

David

Sheppard

Tail

Risk

After the oil market experienced one of its biggestone-day

falls n history yesterday, is there anything still worthi

warningenergyinvestorsabout?

The discouraging answer, for those who have watched

theirportfoliosplungedramaticallylower,isyes.

The decision by Saudi Arabia and Russia to start an oil

price war romises a lot of pain for both sides, a hugep

amount of collateral damage and no assurance that a clear

winner will emerge. By launching it at a time when the

coronavirus outbreak has slashed oil demand, the two

sides have guaranteed that this battle for share will be over

abiggersliceofashrinkingmarket.

There is a slim chance that Saudi Arabia’s aggressive

opening salvo — offering customers huge discounts while

opening the spigots — pushes Russia back to the negotiat-

ingtableasoilpricesfall.Perhapscuttingoutputisprefera-

ble after all? But if that really is the strategy of Mohammed

binSalman,thekingdom’scrownprinceanddefacto uler,r

and his half-brother, energy minister Prince Abdulaziz bin

Salman, the two men may

wanttothinkagain.

Pitted against theprinces

are the two most powerful

figures in Russia’s energy

industry. Vladimir Putin, the

president,isfamiliartomost.

The other isIgor Sechin, his

old ally and head ofRosneft,

thecountry’soilchampion.

If you wanted to know

what sort of personalities were involved in negotiations

leading up to yesterday’s rout, you could do worse than

considerMr Sechin, a figure once described as theDarth

Vader f the Russian oil industry: a powerful number twoo

withareputationforruthlessness.

The Rosneft chief, like Mr Putin, was forged in the dark

days of the cold war. He started his career during Russia’s

involvement in civil conflicts in Angola and Mozambique.

Like the man he followed to Moscow from the mayor’s

office of St Petersburg, Mr Sechin saw the collapse of the

SovietUnionasadisasterthatbecameanopportunity.

Having arrived at the top of Russia’s biggest oil company

in2012,MrSechinalwaysopposedco-operationwithOpec

or the strategy of cutting output. He believed it kept prices

high enough to let rivals in the US shale sector keep

expanding. After Washington hit Russia with sanctions —

includingpenalties or Rosneft’s trading arm over its deal-f

ings with Venezuela — Mr Sechin may have noticed that

Wall Street was finally beginning to tire of supporting the

shale industry’s near profit-free expansion. The old cold

warriorhasspiedanopportunitytostrikeback.

Theinitialresults,infact,mayhavebeenpleasingforMr

Sechin. Some US shale companies saw their shares drop

morethanathirdyesterday.

It is possible that the price war will be over soon. But do

not count on it. Russia appears more likely to dig in for a

longfight.

david [email protected]

Rosneft’s old cold

warrior sees the

oil price battle as

an opportunity

to strike back at

the US enemy

PresidentDonaldTrumplikestousethe
USstockmarketasareportcardforhis
presidency.Assuch,thesharpplungein
theS&P500indexfromtheeffectsofthe
coronavirusandthetumblingoilprice
couldbodepoorlyforhisapprovalratings.
AnalystsatBarclayspointoutthat
MrTrump’spopularitysincehisterm
beganinJanuary2017hascloselytracked
theperformanceofthelarge-cap
benchmark.Formuchoflastmonthhe
hadanapprovalratingofabout46per
cent,peakingat46.3onFebruary26.
Butbytheendoflastweekithad
dippedbelow45percent,accordingto
RealClearPolitics.Overthat10-day
period,astheglobalfalloutfromtheviral
outbreakintensifiedandcasesballooned
intheUS,theS&Pdroppedsharply.
Barclaysanalystsaddedthefallinthe
stockmarketcouldpromptMrTrumpto
“dohisbesttoboosttheeconomyahead
oftheelection”.Thisincludesapplying
furtherpressureontheFederalReserve,
whichhehasrepeatedlylambastedfor
failingtokeepupwithratecutsinEurope
andelsewhere.LastweektheFedmade
anemergencycutofhalfapercentage
point,justafterMrTrumphadimplored
itto“cutratebig”.
IfstockskeepfallingMrTrumpcould
beindanger,saidDannyYongatDymon
AsiaCapital,aSingapore-basedasset
manager.“Covid-19couldwellbewhat
trumpsTrumpandcauseshimtolosethe
2020electionsforbeingill-preparedand
complacent,andfornotsufficiently
protectingAmericanliveswhenhehad
thechanceto,”hesaid. ennifer AblanJ

Report card rump’s approval ratings closely track US stocksT

Fourth year denotes the presidential election year,

since 

Sources: Barclays Equity Research; RealClearPolitics

US president’s approval rating

tracks benchmark index





























  

Trump job approval

poll ()

S&P 

index



History also bodes poorly

for S&P  this year

Benchmark’s performance

over a four-year presidential term ()

   











Average

Median

Further S&P 500 falls could well lead to re-election difficulties for Donald Trump —Carlos Barria/Reuters

MARCH 10 2020 Section:2Front Time: 9/3/2020- 18:53 User:nick.miller Page Name:2FRONT USA, Part,Page,Edition:EUR, 11, 1