Friday News Finds – July 6, 2018

By Tegan Valentine

Hello and welcome back to Top Five Friday Finds – the weekly series in which we share five of the business news stories that dominated the papers (and our conversations) this week.

The past few weeks we’ve commented on major acquisitions shaking up the entertainment industry. Disney and Comcast are currently locked in a battle for 21st Century Fox, while Fox itself acquired Sinclair Broadcast Group and Tribune Media back in May. This week another entertainment industry merger made headlines – however this one featured companies that make their living producing shows offthe screen. On Thursday Montreal-based Cirque du Soleil Entertainment Group announced the acquisition of Minnesota-based VStar Entertainment Groupfor “several million dollars”. VStar is best known for its child-focused shows, and counts the popular ‘PAW Patrol Live’ tour in its arsenal. This week’s acquisition is merely the latest in a series of purchases by Cirque, who has gradually acquired other live performing groups (including the popular Blue Man Group) as it seeks to diversify its portfolio, and expand its reach across the live performance market.

A major pipeline company is making headlines this week, and for once that company isn’t Kinder Morgan. On WednesdayEnbridge Inc. signed a deal with Brookfield Infrastructure to sell its natural gas gathering and processing business for $4.31 billion. In pursuing the sale, Enbridge hoped to accomplish two major goals. First, the company hoped to pay off debt – something that has hampered corporate development in recent years. Second, the sale will allow the company to refocus on its core pipeline business, specifically long-distance pipelines. The company has been shedding non-core assets throughout 2018. Earlier this year, CEO Al Monaco set a goal of generating $3-billion through asset sales. The company has more than doubled that number – with Wednesday’s announcement bringing Enbridge’s total up to $7.5-billion.

Another Canadian company is considering a multi-billion dollar asset shake-up, this time in the retail sector. On Thursday, multiple-news sources reported that Canada’s iconic Hudson’s Bay Company had agreed to sell half of its European business to Austrian-based Signa Holding. HBC immediately released its own statement, clarifying that the transaction shouldn’t be classified as a ‘sale’. Instead, the company indicated that the HBC-Signa transaction should be considered a strategic joint venture, with the two companies merging their Kaufhof and Karstadt German department store chains to increase market share. HBC will receive close to $1.17-billion for their role in the transaction, and while it is a far cry from the $3-billion the company would have received had they agreed to sell Kaufhof to Signa outright last year, $1-billion will go a long way to help the struggling retailer.

Both Canada and the United States celebrated their national holidays this week and fireworks weren’t the only sparks flying. On Sunday, Canada’s new tariff regime took effect, with the government levying a total of $16.6-billion in tariffs against the United States. So how have the tariffs impacted Canadians? The regulatory scheme is relatively new, and while it will take a while to fully understand the impact Canada (and the United States’) protectionist measures will have on the economy, economists have indicated that retail prices could ultimately increase by as much as 10%. In addition to increased prices many major industries could take a hit, with the Canadian auto sector (which has struggled in recent years as it is) likely taking the brunt of it (President Donald Trump has talked about implementing a 25% auto tariff – a move that could cause a drop in production by up to 900,000 united per year). We are still in early days of the new trade order, and while analysts can merely speculate, all are in agreement that both nations will likely suffer as a consequence of this new approach to international trade.

And finally, continuing on with our discussion of trade wars, on Friday the United States hiked tariffs on Chinese imports, and Beijing announced an intent to fight back. At 12:01 this morning, tariffs on $34-billion in Chinese goods took effect; and Beijing immediately fought back. Following the imposition of the U.S. tariffs, $34-billion in retaliatory tariffs on a variety of American products were imposed, with a variety of products ranging from electric cars to soybeans impacted. Both countries have expressed an intent to stay the course of this war, with President Donald Trump announcing Thursday that an additional $16-billion in tariffs were set to take effect in two weeks. Further, the President stated that the U.S. is prepared to impose an additional $200-billion in tariffs on Chinese imports should China not yield to the U.S.’s demands.