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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Tuesday, the twentieth of

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Speaker 2: February in London. I'm Caroline Hepka.

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Speaker 3: And I'm Stephen Carroll. Coming up today. Two Rothschild bank

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Speaker 3: clans fight over clients, power and the family name. We

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Speaker 3: have a special report.

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Speaker 2: Capital One agrees to buy Discover in a thirty five

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Speaker 2: point three billion dollar deal.

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Speaker 3: And in need of a recharge. China's evy dominance forces

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Speaker 3: Europe to reboot its car industry.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: After decades of occupying different business areas, the last two

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Speaker 3: remaining banks with links to the story the Rothschild name

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Speaker 3: are encroaching on each other's territory. Bloomberg's tia at Abio

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Speaker 3: has the story.

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Speaker 4: Compared to the biggest global players Swiss private bank Edmund

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Speaker 4: De Rosschild Group and rival Paris based Rothschild and Co.

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Speaker 4: A Minnos in the two hundred and fifty trillion dollar

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Speaker 4: global wealth management industry. But five years after a bitter

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Speaker 4: legal dispute over use of the family name, some analysts

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Speaker 4: say a merger is looking more likely as the two

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Speaker 4: increasingly compete in the cutthroat investment, banking and wealth management industries.

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Speaker 4: At the end of twenty twenty two, a combined Rosschild

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Speaker 4: firm would have had about two hundred and eighty billion

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Speaker 4: dollars in assets under management. A merger has previously been

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Speaker 4: proposed by the French side, but rebuffed by the Swiss.

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Speaker 4: Neither Rothschild firm chose to comment on the matter. In London,

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Speaker 4: Tiwa and Bayo Bloomberg Radio.

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Speaker 2: Chapter One is buying Discover in the largest global takeover

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Speaker 2: deal of the year so far. The tie up brings

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Speaker 2: together two US consumer finance brands, with the combined firm

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Speaker 2: surpassing long time rivals JP Morgan and Citygroup in the market.

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Speaker 2: Morna from Brubeg's Doug Krisner.

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Speaker 5: It's an all stock deal valued at thirty five point

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Speaker 5: three billion dollars, and it creates the largest US credit

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Speaker 5: card company by loan volume. Historically, Capital One is catered

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Speaker 5: to subprime customers who carry a balance on their cards

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Speaker 5: each month. In recent years, the bank's been trying to

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Speaker 5: attract premium customers. Discoverer is long focused on prime customers

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Speaker 5: with better credit ratings. This deal comes after major declines

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Speaker 5: and Discover shares during the second half of last year.

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Speaker 5: It followed a warning on lapses in compliance. The issue

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Speaker 5: ultimately led to the resignation of then CEO Roger Hawkschild

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Speaker 5: in New York I'm Doug Prisoner Bloomberg Radio.

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Speaker 3: China has ramped up support for the troubled property sector

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Speaker 3: with its biggest ever cut to a key mortgage reference race.

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Speaker 3: Chinese lenders slash their five year loan prime rate by

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Speaker 3: twenty five basis points to three point nine to five percent.

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Speaker 3: Head of China Financed and Property Research at Jeffrey's Shouldin

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Speaker 3: Chen says the move shows Beijing is focused on curbing

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Speaker 3: contagion risks from the property sector, but they will need

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Speaker 3: to do more.

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Speaker 6: China is doing like little by little and loosening purchase

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Speaker 6: restrictions and also providing more supportive or more liquidity injection

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Speaker 6: to the property developers, but unfortunately we haven't seen significant

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Speaker 6: support to stabilize the expectation of property price at this moment.

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Speaker 3: Shooting Chin's analysis are reflected in the markets, with the

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Speaker 3: move failing to lift sentiments. China's benchmark CSI three hundred

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Speaker 3: index dipped on the news.

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Speaker 2: Profits of the mining giant BHP have slumped by eighty

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Speaker 2: six percent in the first half of the financial year.

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Speaker 2: That's as oversupply in the nickel market forced the company

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Speaker 2: to write down key holdings, including a two and a

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Speaker 2: half billion dollar charge on the value of its Australian assets.

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Speaker 2: Global supplies of the metal have ballooned due to ramped

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Speaker 2: up production call benchmark nickel prices to fall. Despite the disruption, though,

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Speaker 2: the CEO, Mike Henry, says that BHP still achieved growth in.

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Speaker 7: Terms of underlying operations and financial performance. It was a

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Speaker 7: really strong half. We had IBITDA up by five percent,

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Speaker 7: net operating cash flow by a whole thirty percent. Balance

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Speaker 7: sheet remains strong with netded at twelve point six billion dollars,

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Speaker 7: and all of that has allowed us to declare an

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Speaker 7: interim dividend of seventy two US sense per share. Now, yes,

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Speaker 7: we have had a couple of exceptionals, including in our

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Speaker 7: nickel business. By way of a bit of context, the

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Speaker 7: nickel business is the smallest by some margin business within

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Speaker 7: the BHP portfolio.

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Speaker 2: So Mike Henry, they're saying that nickel is only a

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Speaker 2: minor part of the miner's business interests. PHP says that

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Speaker 2: it is on track to meet targets, with demand in

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Speaker 2: China and India remaining stable.

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Speaker 3: Buyer plans to slash its dividend by ninety five percent.

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Speaker 3: Is that tries to recover from a sixty three billion

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Speaker 3: dollar takeover of Monsanto, The drug and crop giant, is

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Speaker 3: dealing with thousands of lawsuits of the weedkiller round up.

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Speaker 3: The German company's stock has fallen by more than seventy

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Speaker 3: percent since it completed the takeover.

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Speaker 2: Now the hacker group, which disrupted the twenty six billion

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Speaker 2: dollar US treasury market, has now had its own website compromise.

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Speaker 2: Lock Bit held the world's largest lender, the Industrial Commercial

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Speaker 2: Bank of China, to ransom last year. Bloomberg's James Walcock

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Speaker 2: has more on the crackdown by authorities.

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Speaker 8: If you were to go to Lockbit's site on a

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Speaker 8: dark web this morning, you'd see a note saying it's

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Speaker 8: now under the control of the UK's National Crime Agency,

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Speaker 8: with more info to come later. It's a rare public

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Speaker 8: success for authorities cracking down on cybercrime. The gang is

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Speaker 8: the world's most prolific hacking group, with the FBI tracking

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Speaker 8: one hundred and forty four million ransoms paid. Part of

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Speaker 8: its success comes to its franchise model, where it uses

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Speaker 8: affiliate groups to conduct hacks. Those affiliate groups reportedly received

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Speaker 8: their own message from law enforcement we have your information

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Speaker 8: and maybe in touch very soon. Have a nice day

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Speaker 8: in London, James Wilcock, Blueberg Radio.

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Speaker 2: Now in a moment, the two feuding sides of the

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Speaker 2: Rothschild banking dynasty face increasing commercial pressure to merge. But

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Speaker 2: would Ariander Rothschild controls the Swiss arm ever be persuaded

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Speaker 2: is the topic of one of our big reads this morning,

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Speaker 2: and our Paris banking reporter will be joining us on

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Speaker 2: that in just a moment. But this also caught my eye.

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Speaker 2: But Bog's latest Markets Live Pulse survey worrying reading for

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Speaker 2: junk food makers. Companies that make unhealthy food should course

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Speaker 2: correct now thanks to the growing popularity of weight loss drugs.

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Speaker 2: So apparently it's already affecting the makers of snack foods

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Speaker 2: and investors have really quite strong views about it.

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Speaker 3: Yeah. Three out of four respondents to the survey say

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Speaker 3: that companies making or marketing these kinds of foods should

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Speaker 3: shrink portion sizes, adjust recipes, or just offload the assets altogether.

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Speaker 3: Only water of the some three hundred respondents think the

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Speaker 3: big food can wait out the new threat from appetite

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Speaker 3: suppressing drugs. Remember a couple of weeks ago we were

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Speaker 3: reporting about some of these food makers speaking calling in

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Speaker 3: a panic to the CEO of Novo Nordisk about what

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Speaker 3: effect the likes of their drug, ezempic would have on

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Speaker 3: the on the food industry.

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Speaker 2: Yeah. Absolutely, and of course this at the stage where

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Speaker 2: they're injectable. I think there's even more concern from kind

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Speaker 2: of large agribusinesses, food processing businesses if the appetite suppressant

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Speaker 2: drugs actually just become a pill form, because that you know,

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Speaker 2: could perhaps have wide appeal maybe if like me, you're

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Speaker 2: not a fan of injections.

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Speaker 3: No, indeed, an interesting read this morning anyway, on from

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Speaker 3: our Markets Live team, let's turn though. Two are reporting

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Speaker 3: around the Rothschild Families, a namous synonymous with high end banking.

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Speaker 3: Two branches, one in Switzerland, one in France. Now the

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Speaker 3: French arm of the family is increasingly calling on similar

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Speaker 3: clients in global wealth management. The Swiss setting up a

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Speaker 3: duel that those inside and outside the two firms say

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Speaker 3: will only lead to a merger joining us. Now the

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Speaker 3: details is our Paris banking reporter Alex Rasbandari. Alex, good

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Speaker 3: morning to you. So explain first of all the two

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Speaker 3: branches we're talking about here. There are two branches of

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Speaker 3: this dentistry, one in Switzerland and one in France.

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Speaker 9: Hey, good morning. Yes, indeed, the two branches are what

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Speaker 9: is remaining of the global dynasty that emerged in the

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Speaker 9: eighteenth century in Frankfort. When may, I'm sure our child

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Speaker 9: sends sons across Europe to spawn an empio that would

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Speaker 9: finance kingdoms and empires across Europe. The Peris branch was

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Speaker 9: a success story and merged with the UK one over

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Speaker 9: the past decades and is now run by Alexander Rochil,

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Speaker 9: who's forty three and seventh generation scion. It more specialized

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Speaker 9: in corporate banking, but it's aggressively growing in the wealth

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Speaker 9: management industry, which is where the Swiss branch, which is

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Speaker 9: relative lively new you, is specialized in. That branch was

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Speaker 9: founded in nineteen fifty three by Edmond and is not

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Speaker 9: run by his daughter in law Ariander or child.

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Speaker 2: So then Ariana Rosschild, there's also been a court case

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Speaker 2: fairly recently what is her plan for the business in

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Speaker 2: Switzerland for succession and this whole idea of the possibility

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Speaker 2: of a merger.

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Speaker 9: So indeed, relating to the court matter, it was all

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Speaker 9: focusing on the use of the name because both firms

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Speaker 9: are trying to leverage the raw child name that exudes

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Speaker 9: wealth and power to attract the wealthy clients. That creates

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Speaker 9: a lot of confusion among clients, even most of that

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Speaker 9: branches sometimes are a short walk away one from the other,

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Speaker 9: like in Bordeaux, to lose in France, or even on

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Speaker 9: the same street like in Madrid. So the matter came

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Speaker 9: to the courts in twenty fifteen, was Celton in twenty eighteen.

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Speaker 9: Now they are rules out on how to use the names,

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Speaker 9: but eventually the French approaches. We cite for rab Buschmont

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Speaker 9: and Arianne has repeatedly declined, even though she's facing corporate

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Speaker 9: her people with three CEOs in five years, and she's

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Speaker 9: grappling with succession issues after the sudden death of her

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Speaker 9: husband Pajamadevachild in twenty twenty one at age fifty seven. Officially,

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Speaker 9: she says the succession isn't showed by her daughters, but

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Speaker 9: it isn't clear for now how involved they are with.

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Speaker 3: The business talk to us about this speculation or this

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Speaker 3: consideration of a potential merger. Both businesses are now focusing

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Speaker 3: on global wealth management. There are very big players in

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Speaker 3: that industry. Can they survive independently?

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Speaker 9: So indeed, the friends remain relatively small compared to giants

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Speaker 9: like Ubs and Morgan Stanley. And there's a rule for

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Speaker 9: you know, need for scale in this industry in order

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Speaker 9: to grow even further. So observers and people familiar believe

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Speaker 9: that the os for e merger are increasing because of

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Speaker 9: you know, all the issues we mentioned that on the

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Speaker 9: Swiss side, at the end twenty twenty two, eventually a

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Speaker 9: combined entity would have twenty two hundred and eighty billion

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Speaker 9: assets in oother management. That remains small compared to global giants.

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Speaker 9: But indeed it actually would allow them to leave Frog

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Speaker 9: Picte or Lombard or even Vauterwel in Switzerland, so that

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Speaker 9: would not be an insignificant move.

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Speaker 2: How likely do we think that is given the sort

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Speaker 2: of personal familial nature of what seems to still be

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Speaker 2: a bit of a feud. Neither side commented for this

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Speaker 2: long read that you've written, Alex.

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Speaker 9: Yes, indeed, it's quite complicated for them to comment on

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Speaker 9: this because it's even if it relates to business, it

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Speaker 9: remains family matters. Look, it's complicated to say whether how

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Speaker 9: the odds are. But really, if history is any indication

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Speaker 9: the two branches have managed to work together more or

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Speaker 9: less ermoniously in the wine business, the representatives of the

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Speaker 9: both branches, our owners were owners of the chateule Et

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Speaker 9: chin Bordo, which is a very renowned vineyard, and they

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Speaker 9: created to Champ and Brain together in two thousand and five.

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Speaker 9: So it remains to be seen if they can work

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Speaker 9: together in banking.

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Speaker 3: Now, Okay, Alex Rachebandari in Paris, thank you very much

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Speaker 3: for joining us. You can read that full story on

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Speaker 3: the Bloomberg website or ni Big takes the function on

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Speaker 3: the terminal.

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Speaker 2: Well. Now, let's move to the automotive industry, where cheaper

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Speaker 2: Chinese electric vehicles are putting pressure on the big traditional

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Speaker 2: auto makers in Europe. Coupled with a slowdown in demand

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Speaker 2: for EV's overall Volksvagen, Reno and Stilantis are exploring tie

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Speaker 2: ups with sworn competitors. It seems to make cheaper electric

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Speaker 2: vehicles and to fend off existential threats. Our transport reporter

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Speaker 2: Albertina Torsoli is following this story very closely, as she

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Speaker 2: joins us, now, great to have you with us, Albertina,

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Speaker 2: what's been causing the slowdown? First of all, where do

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Speaker 2: the carmakers in Europe now stand?

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Speaker 10: We've been tracking the story for months, and yes there

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Speaker 10: is an eve slowdown and probably twenty twenty four will

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Speaker 10: be a critical year for the industry. You mentioned Europe,

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Speaker 10: but obviously also in the US. There are various reasons

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Speaker 10: for this slowdown in demand of electric vehicles. I would

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Speaker 10: say the main one is the high price of these vehicles.

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Speaker 10: Electric vehicles are much more expensive or work much more

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Speaker 10: expensive until now versus you know, comparable combustion engines. There's

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Speaker 10: a variety of reasons for that. The metals that go

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Speaker 10: into a battery are just extremely rare and expensive themselves.

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Speaker 10: But obviously we're also coming from a period of history

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Speaker 10: that saw massive supply chain snags due to for example,

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Speaker 10: COVID or the war in Ukraine, meaning that in the

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Speaker 10: past few years many carmakers you know, boosted the prices

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Speaker 10: of these evs because there was a shortage of cars,

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Speaker 10: and you know, as always when there is a shortage,

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Speaker 10: the prices go up. The problem is that this has

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Speaker 10: coincided with the real cost of living prices. I can

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Speaker 10: think of many European countries where inflation bloomed in the

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Speaker 10: past few years, and at the same time a sense

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Speaker 10: that governments aren't really one hundred percent shore now the

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Speaker 10: way they want to go with the electrification process. That

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Speaker 10: there was a big debate last year in Europe over

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Speaker 10: e fuels. So when you add all the technology that

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Speaker 10: isn't there yet, the high price and regulatory uncertainty, this

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Speaker 10: is clearly leading to a weight and see attitude among consumers.

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Speaker 3: Okay, so a crucial time for these car makers. Then

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Speaker 3: what are the options on the table for companies like Reno,

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Speaker 3: Volkswagen and Stilantis.

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Speaker 10: There are various options on the table. The point is

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Speaker 10: that what is clear to everybody today is that you know,

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Speaker 10: as one executive put in it, there is a coostal strategic

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Speaker 10: threat coming from lower priced Chinese carmakers that are increasingly

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Speaker 10: penetrating the market and basically going it alone is really

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Speaker 10: no longer an option for many of these companies. I

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Speaker 10: am thinking of you know, the maker of Dasia cars

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Speaker 10: and cars and Voltwagen. I mean the giant was a

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Speaker 10: giant Voltswagen, but it's a giant that is really has

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Speaker 10: had many difficult months behind. The two companies right now

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Speaker 10: are engaged in that talks over a cheaper over the platform,

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Speaker 10: so to share full resources, to share the cost of

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Speaker 10: developing cheaper cars. When I say cheaper evs, I mean

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Speaker 10: evs that are roughly twenty sub or twenty one thousand

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Speaker 10: euros or below that price. Basically, you know, not that

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Speaker 10: far from the cost of combustion engines. And it's just

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Speaker 10: impossible to go with the loan and to manage to

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Speaker 10: produce quickly cheaper evs on your own. Other companies have

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Speaker 10: other options. Stills, for example, has talked about M and

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Speaker 10: A potential.

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Speaker 7: M and A.

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