6 The EconomistJuly 25th 2020
The world this week Business
Chevronsaid it would acquire
Noble Energyin a deal worth
$13bn, the first big takeover in
the oil industry since the
coronavirus crisis rocked the
market in March. Noble is an
independent producer with
substantial assets in the Perm-
ian basin, where Chevron is
investing heavily in shale.
More consolidation is expected
among oil companies as they
navigate an uncertain outlook
of decreased energy demand.Meanwhile, oil priceshit their
highest level since early March,
in a broader market rally that
was in part a response to the
eu’s stimulus agreement.
Brent crude climbed towards
$45 a barrel.United Airlinesdescribed the
latest quarter as the most
financially difficult in its
94-year history. Revenues
plunged by 87% from April to
June compared with the same
three months last year, push-
ing United to a net loss of
$1.6bn. The carrier burnt
through an average of $40m in
cash a day, though it expects
that to ease this quarter.United joined Lufthansa,
American Airlines and British
Airways in calling for co-ordi-
nation in testing transatlantic
passengersfor covid-19. The
airlines sent a letter to the
White House and European
Commission arguing that
co-ordinated testing would
remove impediments to travel,
such as quarantine.Intesa Sanpaolo, Italy’s sec-
ond-biggest bank, improved its
takeover proposal for ubi
Banca, the fifth biggest. It is
trying to entice ubi’s share-
holders by increasing the cash
element of its deal; its website
is running a countdown to the
offer’s expiration on July 28th.
Intesa thinks a merger will
help the banks cope better with
“new complex scenarios”
resultingfromthepandemic.Tesla’ssalesstayedsteadyin
the second quarter, bucking
the trend of plunging revenues
among carmakers, possibly
helped by its controversial
defiance of the lockdown to
restart production. The com-
pany reported net income of
$104m, marking the first time
it has made a profit in four
consecutive quarters. It also
announced that its second car
factory in America will be
based near Austin, Texas.Lockdowns took a toll on Coca-
Cola’ssales, which plunged by
28% in the second quarter
compared with the same three
months last year, thought to be
the steepest decline for the
company in at least 25 years.
The maker of soft drinks gets
half its revenue from sales at
cinemas, stadiums and other
venues. It noted that it had
performed better in places
with less restrictive lockdown
measures.Fair exchange
Adevinta, a Norwegian oper-
ator of digital marketplaces in
15 countries, agreed to buy
eBay’s classified-adsbusiness
in a $9.2bn transaction. EBay
Classifieds was a force on the
web 25 years ago. It now counts
Gumtree among its brands, but
brings in just a tenth of eBay’s
sales. Adevinta says that the
combined entity will get 3bn
monthly visits to its various
websites.Congress started hashing out
another stimulus package.
There is resistance from some
Republicans towards extend-
ing the extra $600 a week in
unemployment benefitsthat
has been paid during the crisis.
The higher level of benefit irks
those who think it is a disin-
centive to work; Democrats
argue that many families will
fall into hardship without it.
This is the last week that the
additional $600 will be doled
out to the jobless.The Senate Banking Commit-
tee approved the nomination
of Judy Shelton to the Fed (the
full Senate must still vote).
Donald Trump’s choice of Ms
Shelton is controversial. She
has argued against the
existence of central banks,
backed a return to the goldstandard, and has been a serial
switcher on interest rates.The Federal Reserve extended
its “Main Street” lending-
supportprogramme for small
and medium-sized businesses
to organisations that work for
no profit, such as hospitals,
colleges and charities.Financial regulators in China
took control of nine insurance
companies, trust firms and
stockbrokers, in a crackdown
on alleged corporate wrong-
doing and concern about risky
bets amid a rally in China’s
stockmarkets. Several of those
seized, including Huaxia, a life
insurer, are linked to Xiao
Jianhua, a Chinese billionaire
who was abducted from Hong
Kong in 2017. It is thought he is
awaiting trial in China.A giant cover up
Walmart’snationwide policy
requiring customers to wear
face masks came into force.
Most abided by the rules,
though there were reports of a
few differences of opinion
being aired among patrons in
some stores. Many of Ameri-
ca’s retailers now insist on face
coverings. Shoppers in Eng-
land also debated the merits of
masks, which are mandatory
in shops from July 24th.Te s la, net profit/loss
$mSource:Bloomberg4000
2017 18 2019
Clarification:Last week we should
have mentioned that the 41.2%
quarter-on-quarter contraction in
Singapore’s GDPwas at an annual rate.
The economy shrank by 12.6%, year
on year.