The Economist - USA (2021-11-13)

14 TheEconomistNovember13th 2021
The world this week Business

Afteryearsofcomplaintsfrom

investorsthatitssprawling

empireofbusinesseswas

hinderingprofits,General

Electricdecidedtosplitinto

three,independentlyrun

companies.Itshealth­care

assetswillbespunoffin2023;

energyandpowerwillbe

rolledintooneandspunoffin

2024;andaviationistoremain

thesolefocusoftoday’sge.

Theconglomeratehasbeen

sheddingbusinessesforovera

decade.Thedecisiontosplit

heraldstheendofarguablythe

world’sbest­knownconglom­

erate,a titanofAmerican

businessthroughoutthe20th

century.

On theroad

Rivian, a maker of electric

vehicles backed by Amazon,

had a successful stockmarket

debut on the Nasdaq. Its stock

rose by 30% above the offer

price, giving it a market capi­

talisation of over $100bn, more

than either Ford or General

Motors. The company raised

around $12bn, making it the

biggest ipoin America since

Alibaba’s listing in 2014. 

At the opposite end of the

motoring business, Hertz’s

share price fell by 10% on its

first day on the stockmarket

since the company emerged

from bankruptcy. 

The European Union’s General

Court, the lower tribunal of the

Court of Justice, dismissed

Google’sappeal against the

€2.4bn ($2.8bn) fine that the

European Commission im­

posed on the company in 

for anti­competitive practices

that favoured its own compari­

son­shopping service. In the

one ray of light for Google,

which is also appealing against

two other blockbuster anti­

trust fines in Europe, the court

said that general search is not

included in its ruling. 

Rolls­Royce said it had re­

ceived enough investment

from private partners to start

building small modular re­

actors, or small nuclear power

stations, in Britain. The gov­

ernment is contributing to­

wardstheprojectaspartofits

“greenindustrialrevolution”.

Britain’seconomicgrowth

rateslowedinthethirdquar­

ter,to1.3%.Asinothercoun­

tries,supply­chainproblems

arehinderingtherecovery.

gdpisstill2.1%smallerthanin

thefinalthreemonthsof2019.

Oilpricesclimbedhigher,

with Brent crude once again

over $85 a barrel. In America

the price of petrolat the pump

hit an average seven­year high

of $3.41 a gallon. California

remains the most expensive

state in which to fill your car,

with petrol averaging $4.64 a

gallon, according to the Amer­

ican Automobile Association. 

The price of fuel is a big factor

behind America’s surging

inflation. The annual rise in

the government’s consumer­

price index leapt to 6.2% in

October, up from 5.4% in

September,thelargestjump

sincelate1990.Stubborn

inflationisputtingpressure

ontheFederalReservetobring

forwardaninterest­raterise.

Governmentrelief

Meanwhile,thepaceofhiring

pickedupinAmerica,with

employerscreating531,

jobsinOctober.Thatiscloser

tothemonthlyaverageforthis

yearandcomesaftertwo

monthsoflower­than­expect­

edjobsgrowth.

TheboardofSydneyAirport

agreedtoa A$23.6bn($17.5bn)

buy­outfroma consortiumof

investors.Thedealcomes

amida senseintheaviation

industrythatbusinessisreally

takingofffollowing 20 months

of pandemic gloom. America

reopened its bordersto most

travellers this week. Emirates,

one of the world’s biggest

airlines, reported that pas­

senger numbers were up by

319% from April 1st to Septem­

ber 30th, year on year, though

it still made a net loss in the

first six months of this year. 

After a little over a year as a

publicly listed company,

McAfeeagreed to a buy­out

from a consortium of private­

equity firms, in a deal worth

$14bn. The computing­securi­

tycompanyistorefocusen­

tirelyontheconsumermarket,

havingsolditsenterprise

businessinJuly.

Consumers’voraciousappetite

fororderinggrubfromhomeis

feedinga waveofconsolida­

tioninthesector.Thisweek

DoorDash, America’slargest

food­deliveryplatform,agreed

tobuyWolt, basedinHelsinki

andwithoperationsin 23

countries,for€7bn($8bn).

Viasat, a satellitecompany

basedinCalifornia,istotake

overInmarsat, a Britishrival

thatcountstheAmerican

armedforcesamongitscus­

tomers,ina $7.3bntransac­

tion.Thecombinedcompany

willcompeteintheincreas­

inglycrowdedspaceforpro­

viding satellite broadband. 

Markets were once again left

scratching their heads about

the motives behind Elon

Musk’s latest stunt, when he

asked his Twitter followers

whether he should sell 10% of

his stake in Tesla to pay tax, in

a dig at a Democratic proposal

to tax unrealised capital gains.

They said yes. Tesla’s share

price swooned. Mr Musk then

started selling stock. He had

planned to sell at least some of

his shares before seeking

advice from the Twitterati. 

US petrol prices

$ per gallon

Source: EIA

3.

3.

2.

2.

1.

JFMAMJ J ASOND

2020

2021

201