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  • Pierre Fournier

Prof. Fournier Press Review: October 4 - October 8

Agenda: Bombardier, S-Hubert/Cora, Australia, Hennes and Mauritz, Sun Life, Magna International, Market review.

Australia and the opening of its borders. According to BBC News, Australia’s government has announced that it will start reopening its borders next month. Australians who have been vaccinated will be able to travel abroad in the coming weeks once the vaccination targets of 80% are met. Upon their return from overseas, vaccinated Australians will have to go through a 7-day quarantine at home, a change from the current mandatory and costly 14-day hotel quarantine. It is important to remember that on March 20, 2020, Australia put in place some of the toughest border restrictions in the world in response to the Coronavirus pandemic.

Order of 20 Challenger aircraft for Bombardier. According to Yahoo Finance, Bombardier has received an order for 20 of its new Challenger 3500 business jets. The transaction is valued at $534 million USD and is so far the largest business transaction involving Bombardier business jets in 2021. This large order was signed a few days after the unveiling of the new Challenger 3500 business jet a few weeks ago, strengthening the company’s competitive advantage in the business jet market.

Partnership between St-Hubert and Cora. Canada's largest breakfast restaurant chain will begin selling branded foods in grocery stores next year. According to HRIMag, Best Brands, the retail division of the St-Hubert Group, has partnered with Cora Franchises to bring Cora-branded breakfast products to grocery stores. Cora specified that it is important to partner with a strong nationwide food distribution network such as Best Brands.

Increasing profits for Hennes and Mauritz. According to BNN Bloomberg, Swedish ready-to-wear giant Hennes et Mauritz announced quarterly profits to be up sharply over the last year, exceeding pre-pandemic levels. However, its sales are plummeting in China as the company has suffered a boycott since March in China for pledging not to buy cotton from Xinjiang amid allegations of forced Uyghur labour. While it was H & M's third national market before the start of this movement, China is now out of the top 10 of H & M’s markets in the last quarter. Otherwise, there is good news for investors, since H&M has announced that it will resume dividend payments, given more stable market conditions and a good outlook for the quarters to come.

Photo: Fred Thornhill/Reuters

Sun Life purchases DentaQuest. Canadian group insurance company Sun Life is buying U.S dental insurance provider DentaQuest for approximately $2.48 billion. According to Newswire, this acquisition for Sun Life will allow the firm to strengthen its activities in the United States. DentaQuest is the largest provider of Medicaid dental benefits, giving Sun Life access to the U.S government market. DentaQuest was founded in 2001 in Boston and the company has more than 33 million customers in 36 states and about 2,400 employees.

Magna renounces the purchase of Voeneer. According to a Magna press release, Ontario auto parts company Magna International has backed off its deal to buy Swedish tech company Veoneer after Qualcomm made a superior bid. The offer presented by Qualcomm was deemed superior by Veoneer to that of Magna. Magna announced in July that it had reached an agreement to buy Veoneer for a total value of $3.8 billion. However, Qualcomm submitted an offer for a total value of approximately $4.5 billion. As part of the termination of the merger agreement with Magna, Veoneer will pay Magna $110 million USD in compensation.

Market Review. According to CNBC, the New York Stock Exchange ended slightly lower on Friday, following the release of a disappointing job creation report. Nonetheless, the U.S economy is still reasonably doing well. The Toronto Stock Exchange closed on Friday at essentially the same point as the previous day, even as the price of crude oil broke above $80 USD a barrel for the first time in seven years which labour market data for September released Friday showed a return to pre-pandemic levels.


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