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Lufthansa Warns of Lower Profit Amid Fuel Price Volatility

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Lufthansa has warned that its operating profit could decline in 2026 as volatile fuel prices continue to weigh on earnings. The German airline said higher fuel costs linked to geopolitical tensions, including the U.S.-Iran conflict, caused its second-quarter operating profit to more than halve, prompting a weaker full-year outlook.

The airline now expects adjusted EBIT between €1.7 billion and €2.2 billion, compared with its earlier forecast of exceeding last year’s €1.96 billion. Quarterly adjusted EBIT fell to €383 million from €870 million a year ago, while investors reacted negatively, sending Lufthansa’s shares down more than 10%.

To improve efficiency, Lufthansa plans to retire older, fuel-intensive aircraft and temporarily ground some planes to reduce fuel consumption. Despite the short-term challenges, the airline maintained its long-term profitability targets and said it expects fuel supplies to remain stable while continuing to monitor market uncertainty.

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Rio Tinto Rules Out Glencore Revival

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Rio Tinto is not expected to restart takeover discussions with Glencore despite the expiry of a six-month standstill agreement under UK takeover rules. CEO Simon Trott remains focused on simplifying the company, reducing costs, selling non-core assets, and strengthening its core mining businesses rather than pursuing a major merger.

Earlier this year, Rio evaluated a potential $200 billion merger with Glencore but concluded that it did not offer sufficient value. Investors have largely supported the decision, with analysts warning that reviving negotiations could weigh on Rio Tinto’s share price. The company is instead prioritizing asset divestments, expanding its trading business, and increasing exposure to copper.

Meanwhile, Glencore is stepping up engagement with Australian investors while continuing to showcase its copper portfolio. Although speculation around future partnerships remains, analysts believe Rio Tinto is likely to focus on smaller acquisitions and organic growth, leaving the prospect of a merger with Glencore on hold for now.

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AstraZeneca Holds Preliminary Merger Talks with Bristol Myers Squibb

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AstraZeneca has reportedly held preliminary talks with Bristol Myers Squibb over a potential merger that could create one of the world’s largest pharmaceutical companies, with a combined market value of nearly $400 billion. According to a Reuters source, it remains unclear whether discussions are ongoing. AstraZeneca declined to comment, while Bristol Myers did not immediately respond.

A merger would face significant regulatory scrutiny, particularly from U.S. antitrust authorities, due to the companies’ overlapping cancer drug portfolios. Both firms generate a substantial share of their revenue from oncology treatments, making competition concerns a key hurdle if negotiations progress.

The proposed deal would mark the first major pharmaceutical merger since 2020. Bristol Myers has been pursuing smaller acquisitions to strengthen its pipeline as key drugs approach patent expiry, while AstraZeneca continues to post strong growth driven by demand for its cancer and rare disease medicines.

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Swiss Lawmakers Seek Balanced Capital Rules for UBS Amid Stability Debate

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Swiss lawmakers are preparing to debate new capital requirements for UBS next month as they look to strengthen the country’s banking system while ensuring the lender remains globally competitive. The proposed rules, introduced after the 2023 collapse of Credit Suisse, originally called for UBS to hold around $20 billion in additional Common Equity Tier 1 (CET1) capital. However, many lawmakers believe the requirement may be reduced to avoid discouraging investors and limiting the bank’s growth.

Parliamentary discussions are expected to focus on lowering the amount of CET1 capital required to support UBS’ foreign operations. Proposals under consideration range from requiring 50% to 80% capital backing instead of the government’s proposed 100%, potentially reducing the additional capital requirement to between $12 billion and zero. Swiss regulators, including the Swiss National Bank, have warned that weaker capital rules could increase financial risks and leave taxpayers exposed during future banking crises.

UBS has argued that stricter capital requirements would reduce funds available for share buybacks, technology investments, including AI, and international expansion, while also affecting employee bonuses and increasing costs for customers. Lawmakers are therefore exploring a compromise that could allow the bank to use Additional Tier 1 (AT1) capital alongside CET1, aiming to improve financial stability without placing an excessive burden on Switzerland’s largest bank. Final legislation is expected to be considered later this year.

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Volkswagen Plans Deeper Cuts Amid Rising Chinese Competition

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Volkswagen has announced plans to deepen cost-cutting measures as Chinese automakers continue expanding into the European market. CEO Oliver Blume said the company faces growing competitive pressure from more than 150 Chinese brands, alongside challenges from tariffs and weakening demand in China. The automaker is seeking major restructuring to remain competitive.

The company has proposed increasing planned job cuts to 100,000 and warned that up to four German plants could face closure after 2030. While Volkswagen’s second-quarter operating profit fell 9.5% to €3.5 billion, analysts noted signs of business stabilisation, supported by stronger-than-expected revenue and healthy cash flow. However, negotiations with labor unions over the restructuring remain unresolved.

Volkswagen has retained its full-year profit margin forecast but has dropped expectations for revenue growth, now projecting sales could decline by up to 3% in 2026. Meanwhile, Chinese manufacturers such as BYD and Geely are strengthening their European presence by establishing local production facilities, intensifying competition in the region’s electric vehicle market.

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EU Approves Paramount-Warner Bros Merger

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The European Commission has approved the proposed $110 billion merger between Paramount Skydance and Warner Bros Discovery after Paramount agreed to end its European film distribution partnership with Universal Pictures. Regulators said the move addresses concerns that the combined company could gain excessive control over cinema distribution across Europe.

Despite securing approval in Europe, the merger remains on hold in the United States. A coalition of 12 US states has filed a lawsuit seeking to block the deal, arguing it could harm movie theatres, cable distributors, and consumers. A federal judge has temporarily paused the takeover while the legal challenge is reviewed.

If the merger is not completed by September 30, Paramount could face daily financial penalties under the agreement. The deal has also drawn opposition from the Writers Guild of America, which says it could reduce opportunities and wages for writers. Meanwhile, UK regulators are continuing to assess the merger’s potential impact on local media and competition.

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Latvia Seeks Strategic Investor to Stabilise Financially Struggling airBaltic

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The Latvian government is in discussions with a strategic investor to support state-controlled airline airBaltic as it works to strengthen its finances and avoid the risk of default. Prime Minister Andris Kulbergs confirmed that talks with a serious potential partner are underway, adding that the government aims to complete the process this summer.

As part of its recovery efforts, airBaltic will seek short-term financing from bondholders at a meeting scheduled for August 3. The airline is also preparing to unveil a new business plan outlining restructuring measures needed to secure long-term stability. Latvia has made it clear that any investment deal must preserve Riga Airport as airBaltic’s primary operating hub.

The airline has faced mounting financial pressure due to rising operating costs, delays in aircraft engine deliveries, and the loss of Russian and Ukrainian markets following the war in Ukraine. Despite these challenges, airBaltic continues to pursue long-term expansion plans while seeking fresh investment to support its future growth.

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Volvo Expects Recovery Despite China Slump

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Volvo Cars expects a stronger second half of 2026 despite reporting weak second-quarter results driven by a sharp slowdown in China and rising production costs. The Swedish automaker posted an operating profit of $82.8 million for the April–June period, but its shares fell around 8% after the results were announced.

Sales in China, the world’s largest automobile market, dropped 35% as intense price competition continued to pressure the industry. Volvo said it would avoid heavy discounting despite the challenging market, while noting that plug-in hybrid models remained one of the few bright spots in the region.

The company also warned that higher raw material costs, including lithium and aluminium, are expected to impact profitability in the second half. However, Volvo remains optimistic that increased production of its new EX60 electric SUV, along with cost-cutting measures and higher vehicle output, will support improved earnings in the coming months.

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Uber Halts Most Europe Food Delivery Expansion Amid Delivery Hero Pursuit

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Uber has paused most of its planned food delivery expansion across Europe, just months after announcing its entry into seven new markets, according to a report by the Financial Times. The company has reportedly shelved launches in five of the seven targeted countries, including Austria, Norway, and Greece, while continuing operations in Finland and Denmark.

Earlier this year, Uber had unveiled plans to expand Uber Eats into Austria, Denmark, Finland, Norway, the Czech Republic, Greece, and Romania, expecting the move to generate an additional $1 billion in gross bookings over the next three years. However, the company is now focusing on strengthening its presence in markets where it has already launched.

The reported slowdown comes as Uber continues pursuing a takeover of Germany-based Delivery Hero. In May, Delivery Hero confirmed it had received a €33-per-share takeover offer from Uber. Reuters also reported that Uber increased its stake in the company to nearly 37% after acquiring additional shares from Aspex Management. While Delivery Hero declined to comment, Uber has not officially responded to the report.

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Mega-Deals Drive Global M&A to Record High in First Half of 2026

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Global mergers and acquisitions (M&A) reached a record $2.8 trillion in announced deals during the first half of 2026, marking a 48% increase compared to the same period last year, according to LSEG data. The surge was largely driven by 47 mega-deals valued at over $10 billion each, which together accounted for more than $1.3 trillion in transactions. Despite the record value, the total number of deals fell 9% to around 24,000, the lowest level in six years.

Investment bankers say companies are taking advantage of improved regulatory conditions, strong financing availability, and growing investor preference for larger, more focused businesses. High-profile transactions, including NextEra Energy’s acquisition of Dominion Energy and SpaceX’s purchase of Cursor, reflected the increasing appetite for transformational deals. Analysts believe many companies are now pursuing long-planned acquisitions to strengthen their competitive position and drive future growth.

Technology remained the most active sector, recording $649 billion in announced deals, with artificial intelligence and infrastructure-related industries attracting strong interest. Cross-border M&A activity also rose 62% year-on-year to $893 billion, led by transactions involving the United States and the United Kingdom. Experts expect dealmaking momentum to continue through the rest of 2026 as companies seek expansion, strategic partnerships, and business restructuring opportunities.

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