☕️ Fine wine

China removed tariffs on barley, could vino be next?

August 07, 2023

Good morning.

While many of you were in the pub or shifting your focus to the weekend, the competition regulator said 🙅‍♀️ to ANZ’s planned $4.9bn takeover of Suncorp Bank on Friday. We should get the full reasons for that call today.

The two parties will appeal the decision in the Competition Tribunal, a process that could take another six months. You get the sense the ACCC is feeling confident after the Tribunal upheld its decision in the last big contentious deal to go before it (TPG and Telstra’s regional network sharing arrangement, which was also blocked). We’ll see.

In our footytipping comp, the entire league was tripped up by Collingwood’s shock loss at the weekend - not a single player in the comp tipped Hawthorn. With four regular season rounds to go Edamameandchill and johnfjohnf are in the lead with 131 points, two ahead of the chasing pack.

ps. if this was forwarded to you, you can sign up for LOI at letterofintent.com.au

LOI Subscriber #TBD

MARKET MOVERS

*Stock data as of the market close. Commodities and crypto data in USD.

Market News: There would have been a few glasses of red raised in hope in the Barossa Valley over the weekend. China’s ministry of commerce removed tariffs on Australian barley exports on Friday, and some investors (and diplomats) are hopeful that wine could be next on the department’s list.

That would be pretty good news for many Australian winemakers including ASX-listed Treasury Wine Estates - the owner of Penfolds, Wolf Blass and Lindeman’s brands, among many others.

After being locked out of its most lucrative market, Treasury has done a decent job shifting its focus to the US (where its 19 Crimes label has been a hit, in part thanks to the support of Snoop Dogg) and Europe. But as the move in TWE shares on Friday suggests, China has always been the main game for the company, particularly for its high end products, and regaining access would be incredibly significant.

THE QUICK SYNC

  • Earnings season ramps up this week, and it could pose a threat to the unfolding ASX rally. (AFR)

  • Warren Buffet’s Berkshire Hathaway posted a record quarterly operating profit, with higher interest rates boosting its insurance businesses. (Reuters | CNN )

  • Goldman Sachs is hitching its future to its asset management and private wealth businesses rather than investment banking and trading, (in a move reminiscent of Macquarie). (CNBC)

  • Barbie has surpassed US$1 billion at the global box office. (WSJ)

TRADING FLOOR

M&A:

  • Barrenjoey is exploring different approaches in the sales process for West Australian TAB, including long term strategic partnerships. (The Australian)

  • Oaktree Capital and Bain Capital are considering a joint proposal for Star Entertainment. (AFR)

  • Austal’s earnings downgrade may have spooked potential buyers including Cerberus and Arlington Capital Partners. (The Australian)

  • Daiken Biomedical has hired Edison Partners to scout Australian and New Zealand acquisition targets. (AFR)

  • Two childcare businesses, Affinity Education and Guardian Early Learning are both up for sale. (The Australian)

  • Chow Tai Fook Enterprises is expected to pick a preferred bidder for Alinta Energy’s remote power assets in Western Australia in the coming fortnight. (AFR)

  • Mercury Capital is finding a new owner for HQ Travel Group. (AFR)

  • City Chic is selling Evans to AK Retail for $15.5m. (AFR)

  • Driva has landed a multi-year partnership with leading vehicle marketplace Carsales.com. (StartupDaily)

Capital Markets:

  • None

VC:

  • None

Others:

  • Bank of America’s Australian investment bank morphs into a regional hub. (AFR)

  • Clem Salwin has reportedly landed a top executive role at Scentre. (The Australian)

  • Castlepoint Systems secured five new federal government departments as clients. (BNA)

  • Wingate closed fundraising efforts for its medium-tenor senior debt portfolio early. (AFR)

THE WATERCOOLER