Weekly Market Update - 19 August 2024

Drawing A Close

The Paris Olympics has drawn to a close, with China and the US topping the medals table with 40 golds apiece. This year, those gold medals are worth more than ever, with the raw materials that go into them having the potential to fetch about $900 each. The medals contain six grams of gold, the price of which soared to a record in mid-July. Prices are also substantially higher this year for silver, which makes up at least 92.5% of the weight of gold medals. Each medal this year also contained a small piece of the Eiffel Tower.

Source: Bloomberg

Company in Crisis

Newly appointed Starbucks CEO Brian Niccol is taking over a company in crisis. The coffee chain ousted Laxman Narasimhan after he failed to revive a flagging business. Niccol, who orchestrated a remarkable turnaround at Chipotle, will have to contend with inflation-weary consumers forgoing $6 iced lattes. On top of that, activist investors Elliott Investment Management and Starboard Value have been circling, and three-time former CEO Howard Schultz has been griping about the business. The list of potential issues for Niccol to tackle is long, including China’s weaker-than-expected economy. Shares surged by a record 25%.

Source: Bloomberg

Major Food Deal

Mars agreed to buy snack maker Kellanova for $36 billion including debt, bringing together two major food companies in the biggest deal of the year. Mars will pay $83.50 a share in cash, which represents a 33% premium over Kellanova’s closing price on Aug. 2, the last business day before the talks were initially reported. The deal is expected to close in the first half of 2025. Since 2020, closely held Mars has bought brands like Hotel Chocolat and Kind’s North America unit. The packaged-food industry has been grappling with declining volumes and a weakening global consumer.

Source: Bloomberg