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Bill Ackman’s Pershing Square drops deal to buy 10% of Universal Music

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Taylor Swift

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Billionaire investor Bill Ackman’s blank-check company Pershing Square Tontine Holdings said Monday it had dropped a deal to buy 10% of Vivendi‘s flagship Universal Music Group.

Ackman’s SPAC last month agreed to buy 10% of the French media group’s crown jewel for around $4 billion.

Vivendi shareholders recently backed the spin-off of Universal which gave the company an enterprise value of 35 billion euros ($41.55 billion). The music corporation is home to stars including Taylor Swift and Lady Gaga.

However, Pershing announced Monday that its board had unanimously decided not to proceed with the purchase after discussions with the U.S. Securities and Exchange Commission (SEC).

“Our decision to seek an alternative initial business combination (“IBC”) was driven by issues raised by the SEC with several elements of the proposed transaction – in particular, whether the structure of our IBC qualified under the NYSE rules,” Ackman said in a letter to shareholders, published Monday.

Pershing Square said that in light of its experience with the proposed UMG deal, it would now be pursuing a “conventional” SPAC merger. It has 18 months to close a new transaction unless shareholders vote for an extension.

“While we are disappointed with this outcome, we continue to believe that the unique scale and favorable structure of PSTH will enable us to find a transaction that meets our standards for business quality, durable growth, and a fair price,” Ackman said.

Pershing’s share price has fallen 18% since the UMG purchase was announced on June 4, and Ackman said it had underestimated shareholders’ reaction to the “complexity and structure” of the transaction.

Despite dropping the deal, Pershing insisted that Vivendi was not being “left at the altar,” and reiterated that it still intends to become a long-term shareholder of UMG after its public listing on the Euronext Amsterdam in September.

This is a developing story and will be updated shortly.

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CEO lays out hard truths behind energy transition as gas prices surge

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The CEO of energy technology firm Baker Hughes has outlined what he feels are key points related to the energy transition amid deepening concern about rising gas prices and the knock-on effects this could have in the months ahead.

In an interview with CNBC’s Dan Murphy at the Gastech conference in Dubai, United Arab Emirates earlier this week, Lorenzo Simonelli was asked whether soaring gas prices were likely to be transitory or if he expected wider implications for consumers, markets and the broader economy.

“I think a lot of people are seeing what’s happening in Europe and it’s bringing to light the important discussion around the energy transition, and the importance that we have around gas as well,” he said.

It was still early to see if prices would remain high or if this rise was transitory, he said.

Benchmark European gas prices have jumped over 250% since the start of the year, Reuters reported this week.

The reasons for the spike are varied. The influential, yet typically conservative, International Energy Agency said on Tuesday that surging European gas prices had “been driven by a combination of a strong recovery in demand and tighter-than-expected supply, as well as several weather-related factors.” 

“These include a particularly cold and long heating season in Europe last winter, and lower-than-usual availability of wind energy in recent weeks,” it said.

IEA Executive Director Fatih Birol said given that the reasons behind the price rise were multifaceted, it would be “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.”

Birol’s statement would appear to contrast views expressed by figures such as OPEC Secretary General Mohammed Barkindo. Barkindo told CNBC on Tuesday that soaring gas prices were the cost of the attempted shift to renewable energy sources.

“I have talked about a new premium that is emerging in the energy markets that I term the transition premium,” Barkindo said.

The effect of the gas price rise is already being felt on the ground. In the U.K., for example, it has caused a number of small energy suppliers to go bust. 

“We need energy security,” Baker Hughes’ Simonelli said. “And look, there’s plenty of gas around the world, there’s plenty of energy available,” he added. “It’s a question of bringing it to the market.”

On the energy transition — a term referring to a move from fossil-fuel based sources to ones such as solar and wind — Simonelli sought to highlight a number of issues he felt were important.

“We think there’s three hard truths,” he said. “Firstly, we’ve got to work together, accelerate the move towards decarbonization and also eliminating emissions.”

“Secondly, hydrocarbons are here to stay … and natural gas, in fact, is a key element. And thirdly, we’ve got to do it together, collaborate and actually adopt the new technologies that are available.”

Burning fossil fuels, such as oil and gas, is the chief driver of the climate emergency. And despite policymakers and business leaders repeatedly touting their commitment to net zero strategies, the world’s fossil fuel dependency is expected to get even worse in the coming decades.

None of the world’s major economies are currently on track to contain global heating to the Paris Agreement target of 1.5 degrees Celsius, according to a study published by Carbon Action Tracker earlier this month, while separate research shows the vast majority of the world’s known fossil fuel reserves must be kept in the ground to have some hope of preventing the worst effects of climate change.

The role of natural gas

The current crisis surrounding the price of gas has reinforced its continuing significance, even as major economies such as the U.K., European Union and U.S. outline plans to move away from fossil fuels in the years ahead.

Indeed, in its statement issued Tuesday, the IEA said gas remained “an important tool for balancing electricity markets in many regions today.”

Read more about clean energy from CNBC Pro

“As clean energy transitions advance on a path towards net zero emissions, global gas demand will start to decline, but it will remain an important component of electricity security,” the Paris-based organization added.

In his interview with CNBC, Simonelli was asked about the role gas would play in the race to net zero. “You just have to look at Europe and look at the United States with regards to the way they’ve been successful in the last decades to actually reduce their CO2 emissions,” he said.

“You’ve seen a shift from coal to natural gas and that’s going to continue as you look at it from an emissions profile,” he said. “So, you can reduce the footprint of natural gas from an emissions standpoint. It is already one of the most efficient fuels and we think it’s here to stay.”

— CNBC’s Natasha Turak contributed to this report

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Payments giant Nexi working European Central Bank on digital euro

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Italian payments giant Nexi says it is working with the European Central Bank on its proposed central bank digital currency.

“We are engaging with the European Central Bank and contributing to the design of the future digital euro because we believe that can be a positive force in the evolution of digital payments,” Nexi CEO Paolo Bertoluzzo told CNBC’s Karen Tso at the Money 20/20 fintech conference in Amsterdam on Tuesday.

The ECB outlined its plans for a digital version of the euro in July. The euro zone’s central bank envisages the currency as complementary to its existing monetary system, rather than replacing physical cash or reducing the role of commercial lenders.

An ECB spokesperson declined to comment.

Central banks around the world are actively working on or exploring their own central bank digital currencies, or CBDCs. It comes as cash use is increasingly on the decline in several developed economies, and amid growing interest in cryptocurrencies like bitcoin.

China is seen as the leading player in the race toward CBDCs, having tested its digital yuan currency with millions of citizens in a number of regions. Earlier this year, the U.S. Federal Reserve said it would soon release a research paper exploring the prospect of a digital dollar, while the Bank of England is also examining the potential of central bank-issued digital money.

Nexi’s chief said his company was helping to inform the ECB’s thinking on CBDCs.

“The situation will evolve because clearly there will be more to it,” Bertoluzzo said. “We’re starting to talk about a new version of cash. That’s the way they think about it.”

Bertoluzzo said digital currencies like bitcoin and ether were unlikely to play a role in cross-border payments, citing wild swings in the prices of such assets.

“They are clearly an asset class,” he said. “But they fluctuate up and down on a daily basis based on the latest statement from someone in Silicon Valley … which is exactly the opposite of what you need in payments. You need the certainty of the value you are exchanging.”

“Today those types of cryptocurrencies have basically zero impact in payments,” Bertoluzzo said, adding he thinks CBDCs and stablecoins designed to avoid volatility seen in other cryptocurrencies will play a much larger role.

With a market value of over $20 billion, Nexi is one of the biggest payment companies in the European Union. Last year, the firm signed two major acquisitions, agreeing to buy rivals SIA and Nets for a combined total of $14.5 billion. It competes for business in the electronic payments space with the Netherlands’ Adyen and France’s Worldline.

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Germany’s Angela Merkel remains popular around the world

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Outgoing German Chancellor Angela Merkel in Germany’s federal parliament, or Bundestag, back in 2015.

Adam Berry | Getty Images News | Getty Images

As Germany’s long-serving chancellor, Angela Merkel, prepares to leave office after 16 years in power, global popular opinion of her remains overwhelmingly positive — a feat not often achieved by departing global leaders.

Polls of over 17,000 people in 16 advanced economies around the world from North America to Europe and the Asia-Pacific region, conducted by the Pew Research Center, found that public confidence in Merkel is high. In the surveys, 77% of respondents expressed confidence in Merkel to “do the right thing regarding world affairs,” while 79% overall had a favorable view of Germany.

“Majorities in nearly every public surveyed have confidence in Merkel to do the right thing in world affairs, including nine-in-ten in the Netherlands and Sweden,” Pew’s Janell Fetterolf and Shannon Schumacher said on the findings, which were based on surveys conducted from Feb. to May.

“Merkel has enjoyed generally high ratings in a number of countries since she first took office, with confidence growing as more people became familiar with her over time. In most places surveyed, trust in the German chancellor has never been higher,” they added.

Outgoing German Chancellor Angela Merkel with the then-US President Barack Obama on November 18, 2016 in Berlin.

Tobias Schwarz | AFP | Getty Images

Merkel currently enjoys the highest confidence ratings of the five world leaders asked about in the survey. She receives considerably higher marks than Russian President Vladimir Putin or Chinese President Xi Jinping, and Merkel also fares well compared with French President Emmanuel Macron and, in many places, U.S. President Joe Biden.

Positive views of Germany, mostly

The Pew polls, which did not include any data from Germany, show that the majority of people in Europe, North America and the Asia-Pacific region have very positive views of Germany, opinions only bolstered by the country’s apparently calm and collected approach to the Covid-19 crisis.

A median of 79% across 16 publics have a favorable opinion of Germany, while only 16% have an unfavorable one. Germany is also viewed more positively than the U.S. and China in most countries surveyed too.

In several of the European countries polled, Pew has gauged the level of favorable (or unfavorable) opinion toward Germany prior to Merkel taking office in 2006. It noted that in some countries like the U.K., Spain and France, views of Germany have not changed much over the past two decades.

“Roughly seven-in-ten or more have expressed a positive opinion of Germany in Sweden, the Netherlands, Spain, France and the U.K. in each year this question has been asked,” Pew noted.

In the last year or so, however, favorable views of Germany and Merkel have been influenced, at least in part, by perceptions of how Germany handled the coronavirus outbreak, it noted.

Outgoing German Chancellor Angela Merkel greets the crowds in Frankfurt, Germany.

Thomas Lohnes | Getty Images News | Getty Images

A median of 66% say Germany did a good job dealing with the outbreak, and again, Germany fares well in comparison with other countries and institutions.

“Germany’s coronavirus response is generally viewed more positively than the responses of the World Health Organization, China, the EU or the U.S. And people who think Germany has handled the outbreak well are much more likely to have a favorable view of Germany and confidence in Merkel in every public surveyed.’

No love from Greece

While Merkel has helped to steer Europe through several crises, from the euro zone’s financial crisis around a decade ago to the migration crisis of 2015 and more recently, the Covid pandemic, she is not universally liked.

Merkel has been accused by critics of ducking some tough decisions. such as the need to tackle climate change and the need for infrastructure spending in Germany, and she has also been accused of prioritizing Germany’s economic wellbeing at the expense of others in the euro zone.

Her pragmatic approach to global affairs, particularly those concerning finances, has not always won her friends.

This was no more obvious than in Pew’s findings in Greece, where only 30% of respondents had confidence in Merkel to do the right thing in global affairs and where only 32% had a favorable view of Germany.

Protesters demonstrate against the visit of Germany’s Chancellor Angela Merkel on April 11, 2014 in Athens, Greece.

Milos Bicanski | Getty Images News | Getty Images

Public dislike for Merkel is strong in Greece since the country’s sovereign debt crisis a decade ago, as Germany advocated that strict austerity measures should be imposed on Athens as a condition of international bailouts.

“On nearly every assessment, Greece stands out for its particularly negative views of both Germany and Merkel. Only around a third of Greeks have confidence in the German chancellor or a favorable view of Germany, though a majority give it good marks for its handling of the coronavirus outbreak,” Pew’s report noted.

Compared with other countries in Europe, more people in Greece said Germany has too much influence in the EU (86%) too.

Pew noted that negative views of Germany in Greece have been evident since it started surveying there in 2012, just after Greece received a second bailout in response to the European debt crisis and while tensions between the two countries were high.

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