Germany bristles as UniCredit grabs 21% of Commerzbank

Good morning. Here's what happened overnight and what you need to know today.

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1.

Italian grab: UniCredit has increased its stake in Commerzbank from 9% to 21% using derivative contracts, as CEO Andrea Orcel challenges Germany's stance against a takeover. The move, pending regulatory approval, makes UniCredit the largest shareholder, surpassing the German government's 12% stake. The acquisition needs regulatory approval from the ECB and BaFin, Germany's financial authority, which could take up to 90 days. Orcel, a former financial institutions banker at Merrill Lynch, has pursued Commerzbank aggressively, covertly acquiring a 4.5% stake from the German government earlier this month and triggering a backlash from the German government and unions, who on Monday stood by declarations they oppose a deal. "Unfriendly attacks, hostile takeovers are not a good thing for banks and that is why the German government has clearly positioned itself in this direction," German Chancellor Olaf Scholz said. (Capital Brief)

2.

Lebanon battle: Israeli strikes on Monday killed at least 274 people in Lebanon, the deadliest attacks since the 2006 Israel-Hezbollah war, according to media reports citing Lebanon's health ministry. Thousands fled southern Lebanon as Israeli forces warned of a widened air campaign targeting Hezbollah weapon sites, with Prime Minister Netanyahu urging civilians to evacuate in a recorded message. "Essentially, we are targeting combat infrastructure that Hezbollah has been building for the past 20 years. This is very significant. We are striking targets and preparing for the next phases," military chief of the general staff Herzi Halevi said. The strikes also hit hospitals, medical centres and ambulances, Lebanon’s health minister Firass Abiad said. The Israeli military said it struck 800 Hezbollah targets, and Hezbollah retaliated with rockets into Israel. The US announced it was deploying “a small number of additional” troops to the Middle East, while the UN expressed “grave concern” for civilians and advised its staff in southern Lebanon to relocate to safer areas in the north. (Reuters)(The Associated Press)

3.

Chinese ban: The Biden administration proposed a ban on the sale or import of Chinese and Russian “connected vehicles” on national security grounds, with plans to enforce it from model year 2027 for software and 2030 for hardware. The ban will also impact US automakers, with General Motors (GM) and Ford needing to halt vehicle exports from China to the US. “Cars today have cameras, microphones, GPS tracking and other technologies connected to the internet. It doesn’t take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of US citizens,” Secretary of Commerce Gina Raimondo said. “The Commerce Department is taking targeted, proactive steps to keep PRC and Russian-manufactured technologies off American roads.” The rule mirrors a previous ban on Huawei equipment and TikTok scrutiny. (Capital Brief)(BIS statement)

4.

Apollo’s intel: Distressed investment specialist, Apollo Global Management has proposed a multibillion-dollar investment of up to USD5 billion ($7 billion) in Intel, Bloomberg reported citing unnamed sources. The offer comes amid revelations the embattled chipmaker has been engaging in potential takeover talks with larger rival Qualcomm, in what could become the biggest potential M&A deal in the sector. Intel has been undergoing an expensive transformation under CEO Pat Gelsinger, aiming to revive its fortunes after years of declining sales. Apollo's offer may give Intel a lifeline to remain independent. Intel shares rose as much as 4.48% to USD22.82 on the news. Gelsinger is open to considering different options, according to the sources. A Qualcomm-Intel combination, however, faces intense regulatory scrutiny. Apollo last year invested USD900 million in convertible preferred stock of memory chipmaker Western Digital. (Bloomberg)

5.

Fed-fuel frenzy: Hedge funds snapped up US tech and media stocks at their fastest pace in four months, Reuters reported citing a Goldman Sachs prime brokerage note. Spurred by the Fed's expected 50-basis point rate cut, hedge funds tripled their long bets on information technology stocks last week. Buying in semiconductor and related equipment companies outweighed selling in tech hardware, like computer, monitor and hard drive manufacturers, according to the note. Hedge funds also shifted from short to long positions in interactive media and entertainment companies. The broader tech and media sectors now represent nearly a third of overall US net portfolio exposures, it said. Conversely, consumer products were the most sold, with US consumer discretionary stocks, including hotels and restaurants, facing their largest net selling in a year. Gross leverage reached around 278%, among the highest levels seen this year. (Reuters)

6.

Aviation spoofing: Commercial pilots are increasingly encountering GPS spoofing, posing safety risks to flights, The Wall Street Journal reported citing pilots, reports and aviation officials. The attacks started affecting commercial flights about a year ago, the report said, with the number of flights affected daily surging from a few dozen in February to more than 1,100 in August. Most spoofed signals are emanating from military electronic warfare transmitters in Russia, Ukraine and Israel, according to an aerospace academic cited in the report. Pilots from American, United and other airlines have faced false alerts, faulty navigation and instrument malfunctions. The Federal Aviation Administration and European Union Aviation Safety Agency acknowledged disruptions but reported no significant safety threats yet. Airlines, regulators and aircraft manufacturers are working on potential fixes, though equipment standards designed to harden civilian aircraft against spoofing won’t be issued until next year at the earliest, the report said citing unnamed sources. (WSJ)

7.

Tokyo’s warning: Japan deployed F-15 and F-35 fighter jets to fire warning flares at a Russian IL-38 reconnaissance plane that it said violated its airspace three times over Rebun Island near Hokkaido on Monday, Reuters reported citing government officials. It was the first time Japan has taken such an aggressive response in at least six decades. Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said Tokyo lodged “an extremely stern protest” with Moscow over the incursion, which occurred between 1 pm and 4 pm local time, The Wall Street Journal reported. The Japanese defence ministry said the jets acted only after issuing radio warnings. The incident follows increased Russian and Chinese military activity in the region, with their navies conducting joint exercises in the Sea of Japan on the weekend and mirrors a recent Chinese airspace incursion near Kyushu last month. Russia’s Defence Ministry hasn’t commented on the incident. (WSJ)(Reuters)

8.

Golf plot: The man suspected of planning to assassinate Donald Trump at his golf course in Florida, Ryan Wesley Routh, 58, detailed his plans in a letter months before he was detained on 15 September, media reported citing evidence submitted by federal prosecutors. “This was an assassination attempt on Donald Trump but I failed you,” Routh wrote in the handwritten note. “I tried my best and gave it all the gumption I could muster.” Prosecutors said Routh left the letter at an unidentified witness’s house, inside a box that also contained ammunition, four phones and other objects. “It is up to you now to finish the job; and I will offer USD150,000 to whomever can complete the job… He ended relations with Iran like a child and now the Middle East has unravelled,” the memo, addressed to the “world” said. US prosecutors are now seeking more serious charges, including attempted assassination. (FT)(Reuters)