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Uber confirms $3.1B Careem deal; SEC, Tesla avoid evidentiary hearing

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Uber confirms $3.1B Careem deal; SEC, Tesla avoid evidentiary hearing


* Uber Technologies Inc. confirmed it agreed to acquire Dubai-based rival Careem Networks FZ LLC for $3.1 billion, paving the way for the U.S. ride-hailing giant's Middle East expansion. The transaction will include the transfer of Careem's mobility, delivery, and payments businesses across the Greater Middle East region, including major markets like Egypt, Jordan, Pakistan, Saudi Arabia and the United Arab Emirates, to Uber. In a related move, the U.S. ride-hailing company has tasked a team from Indian tech company Wipro Ltd. to speed up detailed mapping in Saudi Arabia and Egypt ahead of Uber's IPO in April, Reuters reported, citing a source with knowledge of the project.

* Lawyers of the SEC and Tesla Inc. CEO Elon Musk told a New York district court judge that they are not seeking a formal court hearing over the contempt proceedings filed by the regulator against Musk over his Feb. 19 tweet that allegedly violated the 2018 settlement that requires the CEO to seek preapproval for social media posts. The SEC, however, pointed out that Musk created a "misleading depiction" of his settlement with the SEC. Separately, a U.S. federal court in California has for the second time dismissed a securities fraud lawsuit filed by Tesla shareholders in 2017, which alleges the electric-vehicle maker made misleading comments regarding the production status of its Model 3.


* S&P Global Ratings forecast that U.S. President Donald Trump imposing a 25% duty on European auto imports would pose a "severe challenge" to the six European carmakers in Volkswagen AG, Fiat Chrysler Automobiles NV, Daimler AG, Bayerische Motoren Werke AG, Volvo Cars and Tata Motors Ltd.-owned Jaguar Land Rover Ltd. that have significant U.S. sales. JLR and Volvo Cars could be the hardest hit as they source none or barely any of their supply chains within the North American Free Trade Agreement region. The hit to profitability, which could result in a 15% drop in 2019 aggregate S&P-adjusted EBITDA for the six companies, could be severe enough to increase the urgency for further consolidation in the industry, the rating agency noted.

* Nissan Motor Co. Ltd. CEO Hiroto Saikawa signed a 10-year employment contract in 2012 that entitled former chairman Carlos Ghosn to a lump sum payout of $40 million after he steps down from the post, the Financial Times (London) reported. Saikawa reportedly told Japanese prosecutors that he signed "without thinking too deeply" about the contract that also allowed Ghosn continued use of company properties in Rio de Janeiro, Paris and Lebanon, which are at the center of Nissan's misuse of funds allegations against Ghosn. Meanwhile, Ghosn is expected to address a press conference in mid-April or later, his first after securing bail following over 100 days in Japanese detention, The Mainichi reported, citing one of Ghosn's lawyers.


* Geely Automobile Holdings Ltd. agreed to acquire an additional 28% stake in its 50/50 electric vehicle joint venture with Chinese EV company Kandi Technologies Group Inc. Kandi Technologies said its unit Zhejiang Kandi Vehicles Co. Ltd. will convert a loan of 314 million Chinese yuan from Geely Group in 2018 to equity in order to increase its cash flow and additionally sell 21.7% stake in the JV for 516 million yuan, giving Geely a combined 78% ownership of the JV, Kandi Electric Vehicles Group Co. Ltd.

* RBC Capital Markets analyst Joseph Spak joined Cowen's Jeffrey Osborne in decreasing Tesla's first-quarter Model 3 deliveries due to "meager demand" and overseas delivery issues. Spak expects Tesla to report deliveries of 52,500 Model 3s in the first quarter, down from a prior estimate of 57,000 units, and about 261,000 Model 3s for 2019, down from 268,000 prior. Both analysts have the equivalent of sell ratings on Tesla shares.

* Los Angeles-based electric-vehicle startup Evelozcity Inc. rebranded to Canoo and said it will offer four types of EVs in cities via a subscription-only model. Canoo's first model is scheduled for launch in the U.S. in 2021. The firm said it recently appointed Clemens Schmitz-Justen, former president of Bayerische Motoren Werke AG unit BMW Manufacturing LLC, in charge of manufacturing to help Canoo with its plans to outsource vehicle production in the U.S. and China.

* Chinese automaker BYD Co. Ltd. inked a strategic agreement with Huawei Technologies Co. Ltd. to cooperate in the fields of automobile intelligent connectivity, autonomous driving, smart monorail and smart industrial park, Gasgoo reported.


* Chinese Premier Keqiang Li reiterated that the country will further open up to foreign investment and will protect the intellectual property rights of foreign companies, including a guarantee that there will be no forced technology transfers, Reuters reported, citing a statement on the Chinese government's site. The premier, who met with senior executives from Daimler AG, BMW, IBM, Pfizer and Rio Tinto at the close of the three-day China Development Forum, reportedly also answered questions on the U.S.-China trade dispute, but the statement did not give further details.


* Finnish energy company Fortum Oyj said its newly developed technology raises the recyclability of electric vehicle batteries to over 80%, compared with existing recycling rates of about 50%. Fortum also is piloting "second-life" applications for EV batteries where they are used for stationary energy storages after having exhausted their original capabilities.


* Lyft Inc. shifted its IPO roadshow in San Francisco to the Olympic Club from the Omni hotel, where dozens of Lyft drivers protested against alleged wage cuts, Bloomberg News reported. The ride-hailing company moved the venue because of the need for a larger space, a person familiar with the matter told Bloomberg. In an emailed statement, Lyft spokesman Adrian Durbin reportedly said the company has a "strong track record of helping drivers increase their earnings."

* SoftBank Group Corp. and Inc. are in talks to invest in India-based car-rental platform Drivezy, The Economic Times (India) reported. The companies reportedly are participating in Drivezy's $100 million equity financing round, during which the car-rental platform is also expected to raise another $400 million in asset financing. Softbank, Amazon and Drivezy declined to comment on the matter, according to the report.

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The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng rose 0.15% to 28,566.91, while the Nikkei 225 gained 2.15% to 21,428.39.

In Europe, around midday, the FTSE 100 climbed 0.24% to 7,194.64, and the Euronext 100 lifted 0.68% to 1,030.09.

On the macro front

The housing starts report, the Redbook Index for retail sales, the S&P Corelogic Case-Shiller home price index, the Federal Housing Finance Agency house price index, the consumer confidence report and the Federal Reserve Bank of Richmond's manufacturing index are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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