1. Southwest Airlines Fined $140 Million by US;
2. Japan’s Nippon Steel Acquires US Steel;
3. Chinese Families Reevaluate Investments;
4. Adobe Cancels Figma Deal, Pays $1 Billion Fee;
5. US Industrial Real Estate Market Remains Resilient;
6. EQT Acquires Medical Device Components Maker;
7. SunPower Warns of Default, Shares Plunge.
1. Southwest Airlines Fined $140 Million by US
Today, the US Department of Transportation (DOT) announced that it is fining Southwest Airlines $140 million due to operational failures during extreme weather last December that left over 2 million passengers stranded at airports, with inadequate flight updates, refunds, and customer service.
This fine is 30 times higher than any previous DOT penalty. Most of the funds will go toward compensating passengers whose flights were canceled or severely delayed in the future.
Transportation Secretary Pete Buttigieg stated that this penalty sends a message: if consumer rights are violated, the DOT will hold airlines accountable.
Southwest Airlines said it will begin offering $75 or more in compensation to affected passengers starting April next year.
______
2. Japan’s Nippon Steel Acquires US Steel
According to a statement, Nippon Steel has agreed to acquire century-old US Steel in an all-cash deal valued at $14.1 billion, or $55 per share. Following the news, US Steel’s premarket stock rose 28% to $50.50.
In mid-August, US Steel rejected a $7.25 billion offer from competitor Cleveland-Cliffs.
As the world’s fourth-largest steelmaker, Nippon Steel hopes to boost growth through overseas expansion. By acquiring US Steel, it gains access to the US steel industry and the high-margin automotive market.
Both companies agreed that US Steel will retain its name and headquarters, and honor all labor agreements with employee unions.
______
3. Chinese Families Reevaluate Investments
Amid declining stock and property values, many Chinese middle-class families are reassessing their asset allocations—reducing investments or even selling assets to raise cash.
According to Bloomberg, real estate accounts for around 70% of household assets. Thus, a 5% drop in property values translates to a $2.7 trillion loss in household wealth.
Bloomberg economist Eric Zhu noted that unless the real estate market sees a bull run in the coming years, families will struggle to offset losses regardless of income.
Data from real estate agents shows that property prices in the core areas of major cities may have already fallen by 15%.
______
4. Adobe Cancels Figma Deal, Pays $1 Billion Fee
Facing regulatory hurdles in Europe and the UK, Adobe Inc. has scrapped its $20 billion acquisition of startup Figma and will pay a $1 billion termination fee.
Both companies said in a joint statement that they lacked confidence in receiving approval from the UK’s CMA and the European Commission.
The two agencies had been reviewing the deal for over a year, frequently requesting additional documents. Adobe disclosed this morning that the CMA had proposed terms too stringent to proceed, prompting the cancellation.
Adobe, dominant in creative software with products like Photoshop and Illustrator, had intended to acquire Figma, a platform for designing websites and apps that directly competes with Adobe XD.
______
5. US Industrial Real Estate Market Remains Resilient
Despite an overall decline in leasing demand, new development, and investment volume in the US industrial real estate market, a new Colliers report found that the top 25 markets still added and leased a combined 322 million square feet of industrial space.
In Q3, Dallas–Fort Worth led with 52.6 million square feet added, followed by Chicago with 27.8 million.
In terms of total space, Los Angeles remains the nation’s largest market at 1.7 billion square feet, though its growth rate dropped below 2% this year. On the bright side, L.A.’s vacancy rate fell to 2.6%—the lowest nationwide and below the healthy range of 6% to 8%.
New York ranks as the fourth-largest market with 879 million square feet, adding 8.5 million this year, but its vacancy rate rose to 4.1%.
The vacancy rate across 77 major US cities hit a low of 3.6% in early 2022.
______
6. EQT Acquires Medical Device Components Maker
Sources revealed that private equity firm EQT AB is close to acquiring medical device component manufacturer Zeus for over $3 billion.
Founded in 1966, Zeus produces critical components for minimally invasive surgical devices. The Tourville family still owns and operates the company, which has eight facilities in the US and one in Ireland.
EQT competed with several other private equity firms, including one backed by Goldman Sachs.
Zeus’s components are used in complex procedures such as coronary interventions and valve replacements.
______
7. SunPower Warns of Default, Shares Plunge
In a filing released today, US-listed solar company SunPower (ticker: SPWR) warned that one of its subsidiaries defaulted on a loan agreement after failing to file Q3 financials on time. If lenders demand immediate repayment, the company could face a liquidity crisis or even bankruptcy.
Following the warning, SunPower shares plunged 25% to their lowest level since August 2016.
As of last Friday, the company’s stock was already down 66% year-to-date. Rising interest rates have increased borrowing costs and severely impacted SunPower’s profitability.
SunPower designs and produces high-efficiency polycrystalline silicon solar cells, solar tiles, and back-contact photovoltaic modules.
______
This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.