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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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BMW Prepares Staff Talks After Profit Warning Amid China Slowdown and Rising Costs

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German luxury carmaker BMW is preparing discussions with employee representatives after issuing its latest profit warning and announcing plans to accelerate efficiency measures. The company cited continued weakness in the Chinese market and rising costs linked to the conflict involving Iran as key reasons for the weaker outlook.

Industry analysts believe BMW could consider reducing jobs in Europe while increasing efforts to localise production in North America and China. Although the company has not announced large-scale layoffs like some of its competitors, its workforce declined slightly in 2025 and is expected to shrink further this year.

BMW’s shares fell to their lowest level in nearly six years following the announcement. The automaker expects its global workforce to decrease by up to 5% by the end of 2026, potentially affecting around 7,700 positions. However, the company said the reduction will be achieved through natural attrition rather than compulsory job cuts.

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Inditex Defies Consumer Slowdown as Zara Delivers Robust Early Summer Growth

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Zara owner Inditex has reassured investors with a strong start to the summer season, reporting currency-adjusted sales growth of 11.5% in May, well above analysts’ expectations of 8%. The performance comes despite weaker consumer confidence and economic uncertainty linked to rising inflation concerns and geopolitical tensions. The retailer’s shares climbed as much as 5% following the announcement.

During the February-to-April quarter, Inditex recorded sales of €8.75 billion, representing an 8.8% increase on a currency-adjusted basis. The company also improved profitability, with gross margin rising to 61.2% from 60.6% a year earlier. Executives said the group has successfully adapted its supply chain to manage disruptions in global shipping and transportation caused by the ongoing conflict in the Middle East.

Inditex remains optimistic about future growth, particularly in the United States, its second-largest market after Spain. The company said sales growth is being driven mainly by higher product volumes rather than price increases, while investments in larger stores and strategic expansions continue to attract customers. Inditex maintained its full-year outlook, including stable gross margins, a 5% increase in retail space, and capital expenditure of €2.3 billion.

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Universal Music Rejects Bill Ackman’s $64 Billion Takeover Bid

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Universal Music Group has rejected a $64.3 billion takeover proposal from billionaire investor Bill Ackman’s firm, Pershing Square, stating that the offer significantly undervalues the company. Universal’s board said the bid was not in the best interests of shareholders, artists, employees, fans, or other stakeholders, reaffirming confidence in the company’s long-term growth strategy.

Pershing Square, which already owns a stake in Universal, launched the bid in April with plans to relist the music giant in the United States. Ackman argued that Universal’s share price had underperformed due to factors unrelated to its core music business, including ownership structure concerns and delays in pursuing a New York stock market listing. However, major shareholder Bolloré Group had also opposed the proposal, claiming it did not reflect the company’s true value.

Universal, home to some of the world’s biggest artists and music labels, said it remains focused on expanding its leadership in the global music industry through innovation, artist development, and stronger fan engagement. The company also pledged to provide more detailed financial disclosures in the future, while continuing to navigate industry challenges such as royalty debates and the growing impact of AI-generated deepfake music.

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US Liquor Maker Shifts Production to Canada Amid Ongoing Trade Dispute

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Minnesota-based Phillips Distilling Company has moved part of its production to Canada after a widespread boycott of American-made alcohol by Canadian provinces severely impacted its business. The company lost around 70% of its Canadian sales following restrictions introduced in response to U.S. tariffs, with its popular Sour Puss liqueur being among the hardest-hit products.

To restore access to the Canadian market, Phillips Distilling partnered with a Montreal-based manufacturer and began producing Sour Puss in Canada. The move allowed the brand to return to store shelves across several provinces, helping the company recover from the significant decline in sales. Company executives said the decision marked a major shift in their long-standing business model.

The trade dispute between Canada and the United States remains unresolved, with most Canadian provinces continuing to limit sales of American alcohol. Analysts note that Phillips Distilling was able to relocate production more easily than producers of region-specific products such as Kentucky bourbon or California wine. Despite uncertainty surrounding future trade negotiations, the company says the experience has reshaped its long-term business strategy.

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Estée Lauder Ends Puig Merger Talks to Focus on Turnaround

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Estée Lauder and Spanish perfumery Puig have officially ended their merger talks, a decision that sent Estée Lauder shares soaring over 10% in extended trading. The proposed deal, first disclosed in March, would have created a massive $40 billion luxury beauty conglomerate combining brands like Clinique and MAC with Charlotte Tilbury and Carolina Herrera. However, investors and analysts welcomed the termination, relieved that the company avoided massive integration risks, balance sheet strain, and management distraction during a critical operational overhaul.

Sources familiar with the matter revealed that complex negotiations were further complicated by demands from makeup mogul Charlotte Tilbury, the founder of the namesake brand majority-owned by Puig. Analysts, including RBC Capital Markets, noted that the timing was highly impractical given the underlying complexities of combining two massive, family-controlled empires. Additionally, Estée Lauder is already in the middle of a major internal restructuring plan under CEO Stephane de La Faverie, aimed at reversing three consecutive years of sales and market share declines.

Moving forward, Estée Lauder will prioritize its internal “Beauty Reimagined” strategy, which includes heavy store investments, aggressive job cuts, and closing underperforming outlets to drive sustainable long-term growth. Despite pulling the plug on this specific mega-merger to prioritize its turnaround, the cosmetics giant emphasized that it will continue to evaluate future strategic acquisitions and divestitures to strengthen its market position against industry leader L’Oréal.

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Pernod Ricard and Brown-Forman Explore Merger Amid Industry Slump

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Global spirits giant Pernod Ricard and American whiskey producer Brown-Forman, best known for Jack Daniel’s, have confirmed they are in discussions over a potential merger. The move would combine the world’s second-largest spirits company with a leading U.S. whiskey maker, as both firms navigate a prolonged slowdown in alcohol sales. While Brown-Forman’s shares rose sharply following the news, Pernod Ricard’s stock declined, reflecting mixed investor sentiment about the deal.

The spirits industry has been facing declining demand due to changing consumer habits, rising health consciousness, and pricing pressures from tariffs. Both companies have already initiated restructuring efforts, including cost-cutting measures and job reductions. Analysts note that a merger could deliver operational efficiencies and cost savings, especially given overlapping markets in the U.S. and Europe, though it may not fully address long-term growth challenges.

The proposed deal is expected to include a significant stock component, allowing founding families to retain influence in the combined entity. While Brown-Forman’s controlling shareholders have historically resisted such moves, current market conditions may make them more open to consolidation. The companies stated they will not provide further updates until negotiations are finalized or discontinued.

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