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Jan 3, 2017

DealBook - January 3, 2017: The Year Ahead, Anshu Jain Joins Cantor

By Amie Tsang
Happy New Year, DealBook readers.
Last year, companies of all types had their checkbooks open, hoping to buy a technologically savvy start-up that could revolutionize the way they work.
“Shareholders are judging management teams on their ability to be bold and not just make short-term moves,” said Aryeh Bourkoff, the founder and chief executive of the investment bank LionTree. “The bold C.E.O.s are the ones that play to the future.”
What can we expect in 2017?
• More of the same when it comes to mergers and acquisitions, as companies look for deals that can propel them ahead of the competition in a world of connected homes and driverless cars.
• For American tech behemoths operating in Europe, this year could be even more painful than the last — and 2016 was no cakewalk for them: Google faces antitrust charges; Apple is trying to appeal its tax bill of €13 billion, or about $13.7 billion; Facebook is being investigated over how it tracks people and has to respond to charges that it misled regulators when it sought approval for its takeover of WhatsApp; the European Court of Justice will rule on whether Uber is a transportation service or a digital platform; Amazon is being investigated over its tax treatment in Luxembourg.
Now how about what is possible after the tumultuous year we’ve just had?
Could Masayoshi Son, the billionaire who controls Sprint, try to merge the company with T-Mobile? Although antitrust issues should make the deal difficult, perhaps it could get the green light under a new business-friendly administration, Andrew Ross Sorkin writes.
Another unthinkable prediction: What if Uber buys its competitor Lyft? Ride-sharing is harder to profit from than some people thought and Uber still needs to subsidize rides in many major American cities because it is competing with Lyft. Mr. Sorkin tackles that and does some more blue-sky thinking in his DealBook closing dinner column.
Anshu Jain to Join Cantor Fitzgerald
A year and a half after being forced to step down from the top job at Deutsche Bank, Anshu Jain will join the private trading firm Cantor Fitzgerald as group president.
Mr. Jain will not have a group of executives reporting to him but will strategize and engage with clients at a senior level.
His expertise in selling complex, high-margin securities to hedge funds and other risk-loving investors makes his skills a good fit for Cantor’s businesses, but there may be questions about Mr. Jain’s capacity to serve for a long period as a No. 2.
Mr. Jain has a history of champing at the bit for the top job and his time at the top at Deutsche was the culmination of a dream to be a Wall Street chief executive, even though it was marked by repeated setbacks.
Coming Up
• The United States Congress reconvenes and the House will vote on rules significantly curtailing the power of the Office of Congressional Ethics, which was set up in 2008 after corruption scandals that sent three members of Congress to jail.
• South Korea’s Constitutional Court begins formal hearings into the impeachment case against President Park Geun-hye. The scandal has put collusion between big business and government under intense scrutiny and could reshape the nation’s democracy.
Quotation of the Day
“We need to fight black money, even though it is hurting little people like me.”
— Hem Raj Chechi, a taxi driver in New Delhi. A ban on the largest currency bills circulating in India set off cash shortages that hit the country’s most vulnerable people hard. But even as they have struggled, the poorest Indians have continued to voice support for the initiative, which is aimed at reducing corruption.
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Mergers and Acquisitions
The Euronext Stock Exchange in the financial district of Paris. The company has offered to buy the French arm of the London Stock Exchange Group’s majority-owned clearing business.
Euronext Offers to Buy Unit of London Stock Exchange for $536 Million
The exchange is seeking to sell the French arm of its clearing business to try to win regulators’ approval for a merger with Deutsche Börse.
ANZ Sells Stake in Shanghai Bank
Australia and New Zealand Banking Corporation agreed to sell its 20 percent stake in Shanghai Rural Commercial Bank for $1.33 billion as part of the chief executive’s move to unwind its expansion in Asia.
Chinese Access to U.S. Semiconductor Industry May Be Curbed
The Obama administration is completing a study that could lead to restrictions on Chinese investment in the semiconductor sector in the United States. It will include recommendations aimed at bolstering the protection of the industry, including a tougher stance by the Committee on Foreign Investment, according to people familiar with the study.
Surge in Chinese Corporate Investment Into the U.S. Unlikely to Be Matched
Analysts at the research group Rhodium said the new uncertainty surrounding the administration of President-elect Donald J. Trump and his appointment of China hawks to oversee trade policy meant Chinese companies were unlikely to repeat the surge in investment last year.
Banks’ Overdraft Fees Have Critics Seeing Red
Critics say that banks have been offsetting the profit-sapping effects of low interest rates by squeezing consumers on overdraft charges. They say that annual charges for overdrafts now amount to certain other forms of credit — pawn shops, payday lenders and tax-refund anticipation checks — put together.
Inside the Russian Private Bank Backed By the State
“They want to become too big to fail,” a senior Russian investor says of the bank Otkritie.
Legal and Regulatory
France Lets Workers Turn Off, Tune Out and Live Life
A raft of measures meant to balance modernity and tradition will make it easier to unplug from work email, protect the environment and get divorced.
Airbnb’s Edge on Room Prices Depends on Tax Advantages
When you book an Airbnb room in London, around a third of the $100 in savings you make over the price of an average hotel room is because of tax advantages that favor Airbnb’s business model, according to research by The Financial Times.
A SpaceX Falcon 9 rocket exploded minutes before a planned test-firing of its engines at Cape Canaveral, Fla., on Sept. 1.
SpaceX Says It’s Ready to Launch Rockets Again
The company says it has determined the likely cause of an explosion in September that led to setbacks in its schedule.
Pearl employees. More than 50 of the company’s 80 or so employees worked for Apple at some point.
Growing a Different Apple
At Pearl Automation, former Apple employees are blending their old employer’s high quality standards with less paranoia and more openness.
A CNN article served up via Google AMP, a method of loading mobile web pages more quickly.
Google Helping Mobile Publishing? Some Publishers Are Not So Sure
AMP, a method of loading of mobile web pages more quickly, has raised concern among small publishers worried they are losing control of their content.
Microsoft’s recovery page.
Where to Go if You Forget Your Hotmail Password
If you’ve been automatically logging in for so long that you’ve forgotten your account password, visit Microsoft’s reset page.
Business and Economy
F. Ross Johnson, right, in 1982, when he was president of Nabisco, with Robert Schaeberle, the company’s chief executive at the time.
F. Ross Johnson, Symbol of ’80s Corporate Excess, Dies at 85
As chief executive of RJR Nabisco, Mr. Johnson instigated the era-defining takeover struggle chronicled in the best-selling book “Barbarians at the Gate.”
The Champions of the 401(k) Lament the Revolution They Started
Many early backers of the 401(k) now say they have regrets about how their creation turned out despite its emergence as the dominant way most Americans save.
A Microsoft commercial, “Spread Harmony,” was one of several recent ads from major American brands that prominently featured everyday Muslims.
In Year of Anti-Muslim Vitriol, Brands Promote Inclusion
A slew of major American companies prominently featured everyday Muslim men, women and children in their marketing last year.
The Best Time to Retune Your Career? It’s Probably Right Now
Thinking about asking for a raise, or changing jobs, or just want to be happier at work? Here’s advice on how to get started.
The President-Elect and Climate Policy
Carbon capture equipment at the Petra Nova plant southwest of Houston.
Michael Stravato for The New York Times
Progress has come in fits and starts, but supporters believe a new plant in Texas may provide a clear economic argument for fighting global warming.
A wind farm in Pomeroy, Iowa. The wind power industry is booming in the United States, with wind-farm technician projected to be the country’s fastest-growing occupation over the next decade.
Jim Watson/Agence France-Presse-Getty Images
The renewable energy transition is well underway and will not be easily reversed. But the new president can still set back efforts to slow climate change.