Central Banks Split on Interest Rates

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• Transcript

  [INTRO: AMINE LAOUEDJ, INVESTMENT BANKER]

  Welcome! Once a week from London, we break down the global economic event that mattered most, and we analyze what it means for business.

  ---

  [LAST WEEK'S KEY ECONOMIC EVENT]

  Over the past few weeks, the world's major central banks each set new interest rates, and they did not move together. The European Central Bank and the Bank of Japan raised. The Federal Reserve and the Bank of England held. Switzerland held at zero. And not one of them cut.

  As a reminder, a central bank sets the basic interest rate for the economy. Commercial banks add their margin and pass that cost on to households and companies. A lower rate makes credit cheaper and supports activity, while a higher rate makes credit more expensive and slows an overheating economy that generates too much inflation. Central banks use this tool mainly to control inflation.

  -

  To see why one period produced different decisions, start with the cause of the inflation.

  The Iran war restricted the Strait of Hormuz, and with it the supply of oil, gas, and fertilizer. Oil rose from the low 70s before the war to a peak near 126 dollars a barrel, and gas, shipping, insurance, and fertilizer costs rose with it.

  This inflation comes from scarcity, not from people spending too much, and that distinction decides what follows. Higher interest rates work by cooling demand, but they cannot produce missing oil, reopen a shipping lane, or replace lost fertilizer.

  So at the start of a supply shock, raising rates mostly damages an economy that is already absorbing higher costs, which is why most central banks first chose to wait.

  But waiting has a limit. If high input costs last long enough, companies raise prices to protect margins, workers ask for higher wages, and suppliers write higher costs into new contracts. Inflation then stops being only about the original shortage and spreads into wages, contracts, and everyday pricing, where it sustains itself. These are called second-round effects, and once they appear higher rates matter again, because they can cool demand and make that spiral harder to continue.

  -

  So each bank faced the same hard choice. Cut, and you risk feeding an inflation that is already high. Raise, and you squeeze an economy that is barely growing and already paying more for everything. Wait, and you gamble that the shock fades before those second-round effects set in. Each one weighed that same trade-off and landed differently, and the deciding factor was how exposed its economy was to the shock in the first place.

  The eurozone is among the most exposed, because it imports most of its energy and inputs. Its inflation reached 3.2 percent in the year to May, and even the part that excludes energy and food rose, a sign the shock was spreading. So on 11 June the European Central Bank raised by a quarter point, its first increase since 2023, while expecting growth of only 0.8 percent this year.

  Japan is exposed through its currency. A weak yen makes every imported barrel and component more expensive at home, and those costs were already passing from company to company. So on 16 June the Bank of Japan raised its rate to 1 percent, the highest since 1995, in a country that spent a generation near zero.

  The United States is different. It produces much of its own energy, so the shock hits it less, and its economy is still growing solidly. So even with inflation at 4.2 percent in the year to May, its highest in three years, the Federal Reserve held on 17 June. But it dropped the language that had pointed to future cuts, and its own projections now show most officials expecting a rise, not a cut, before year end.

  The United Kingdom held too, on 18 June, because its inflation, at 2.8 percent in the year to May, is closer to target and its economy is weak. But two of its nine policymakers voted to raise at once, up from one before, so the pressure there is moving toward higher rates, not relief.

  Switzerland sits at the other extreme. It relies far less on the energy caught up in the war, and its strong franc makes what it does import cheaper, so almost none of the shock reached its prices. With inflation at just 0.6 percent, it kept its rate at zero.

  So this is not a coordinated tightening. It is a shared refusal to cut while the inflation risk is alive, with the most exposed economies already moving up.

  -

  One thing genuinely improved over these weeks, and the central banks did not control it. Oil fell back toward 80 dollars, well below its wartime peak though still above the pre-war level, as the fighting de-escalated and some traffic returned through the strait. That fall was already underway as these decisions were taken, which is part of why the banks that held felt able to wait, and why even the two that raised moved only once.

  But the relief is fragile. On 17 June the United States and Iran signed a Memorandum of Understanding meant to end the war and reopen the strait, and oil fell further. Then on Saturday Iran declared the strait closed again over Israel's strikes in Lebanon, while the United States said traffic kept flowing.

  So the reopening that pulled oil down is already disputed. And even where it holds, the earlier spike already sits inside many contracts and prices, and the effects on fertilizer and food arrive later.

  The relief is real, but partial, and it could reverse quickly.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact splits by where you operate. It is negative for the eurozone and Japan, and broadly neutral for almost everyone else. Let me take it group by group.

  If you run a company in the eurozone or Japan, this is a real negative, and it has already happened. Your central bank raised rates, so your cost of borrowing went up this month. It is not a risk to plan for any more. It is sitting in the interest you are paying right now. That said, it does not land evenly. If your borrowing is on fixed rates, or you run on cash rather than debt, you barely feel the change. The pressure falls on companies carrying floating-rate debt or facing a refinancing this year.

  The squeeze is worst in the eurozone, where companies are also paying more for imported energy and seeing almost no growth at the same time. In Japan it is more mixed, because the weak yen that makes the increase sting for importers also flatters exporters when their foreign earnings come home.

  If you run a company almost anywhere else, very little changed for you. Your own central bank looked at the same war and chose to wait, so your cost of money is where it was last month. The decisions made plenty of noise, but the ground under you did not move. That includes the United States and the United Kingdom, where the rate cut people wanted still did not arrive, and where the talk now is of the next move being up rather than down.

  There is some good news pulling the other way.

  Oil has come back down toward 80 dollars from its wartime peak, which lifts a little weight off fuel, freight, and power. But the relief is partial and slow, because food and fertilizer prices ease only slowly, the old highs are still written into contracts signed months ago, and the calm that let oil fall is already being disputed.

  So most companies will feel dearer borrowing well before they feel cheaper energy. The companies that gain most here are the energy-intensive ones and those able to pass costs on, because for them cheaper oil is close to pure relief.

  And if you operate across borders, there is one quieter shift.

  Until this month the big central banks were all sitting still together. Now they have moved apart, so borrowing in euros and yen costs more than it did while borrowing in dollars and pounds does not. Money has always carried a different price in different currencies, so the gap itself is nothing new. What is new is that it has just widened in one clear direction, which changes the relative cost of funding for any company that borrows across more than one of these currencies.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  If you are in the eurozone or Japan, the first job is to stop running your numbers on the rate you assumed back in January. Reprice your plans at the rate you are actually paying now, because the increase has already happened. Start with any debt that floats with rates and anything you have to refinance this year, and decide how much of it to lock down at a fixed cost while you still can.

  If you raise money in more than one currency, look hard at where you borrow next. Euros and yen got dearer this month and dollars and pounds did not, so the cheaper option may have changed. Just borrow where you also earn, because chasing a lower rate in a currency you do not take revenue in usually disappears once you pay to cover the exchange risk.

  For everyone else, the main move is to stop waiting for a rate cut this year and take it out of your plan. Not one of these banks cut, and several are signaling that their next step could be up, so build your plan on money staying expensive rather than getting cheaper.

  And whatever you do, treat the drop in oil as a window, not a new normal. Use it to rebuild some cash or to lock in supply at today's better prices, but do not rebuild your whole cost base around cheap energy, because the very same waterway that let prices fall was declared shut again this weekend. None of these banks has tied itself to a path, so keep enough room to move if the war, or the cost of these inputs, turns again.

  [OUTRO: AMINE LAOUEDJ, INVESTMENT BANKER]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Over the past few weeks, the European Central Bank and the Bank of Japan raised their interest rates, while the Federal Reserve and the Bank of England held. None of them cut, and several signaled their next move could be up rather than down.

Behind these decisions is the same pressure: the inflation set off by the Iran war and the disruption of the Strait of Hormuz. This is a shortage of supply, not an overheating economy, so higher rates cannot fix its cause. The most exposed economies raise them anyway, to stop the price rises from spreading into wages and contracts, while none of the others can risk a cut with inflation still this high.

Every week on the What It Means for Business podcast, Glenshore's Amine Laouedj cuts through the noise of global economic headlines to explain what is happening, why it matters, and what business leaders should do to adapt.

Available on Spotify and Apple.

Date of production: 22 June 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

G7 Refuses Big-Spending Response to Iran War [Video]

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• Transcript

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome! Once a week from London, we break down the global economic event that mattered most, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  Last week, the finance ministers and central bank governors of the G7 met in Paris, France, to discuss the response to the Iran War.

  The G7 is an informal grouping of the seven largest advanced economies: the United States, Japan, Germany, the United Kingdom, France, Italy and Canada. The European Union is also represented at the table. They were joined by the heads of major global organizations including the International Monetary Fund, the World Bank, the OECD, the International Energy Agency, and the Asian and African Development Banks. They were also joined by the finance ministers of Brazil, India, Kenya and South Korea.

  As a reminder, the Iran war started at the end of February when Israel and the United States struck Iranian targets. Iran retaliated by restricting traffic through the Strait of Hormuz, the maritime passage that carries a fifth of the world's oil. Traffic now runs at 5% of pre-war levels, and Brent crude peaked above $115 a barrel last week.

  The objective of the Paris meeting was to answer the one question every business leader is also asking: how far should governments go to cushion their economies from this war?

  -

  For context, in normal times, the default rule governments operate under is: spend carefully, do not blow up the deficit.

  That rule has been broken twice in the last five years. During Covid in 2020, governments spent whatever was needed to keep their economies alive. During the Ukraine war and the European energy crisis that followed in 2022, they broke it again, rolling out price caps and subsidies that ran into the hundreds of billions of euros.

  The Iran war is a shock of the same order of magnitude. Everyone expected the rule to be broken a third time.

  This is where the Paris meeting matters. When the meeting ended on Tuesday, the joint statement indicated that any policy response to the energy shock should be "temporary, targeted and fiscally responsible."

  What does that actually mean in practice?

  Temporary means support cannot become permanent: no new subsidies that quietly stay on the books for years, no benefit increases that become baselines, and no support schemes without a clear end date.

  Targeted means support cannot be broad: it must go only to the most affected households and sectors, not to the whole economy through general measures like an across-the-board energy price cap or a universal handout.

  Fiscally responsible means support cannot widen the deficit beyond what each country can sustain: it must be funded or offset, not simply added to the borrowing pile.

  In other words, even though the Iran war is comparable in scale to the previous two shocks, the G7 has confirmed in writing that this time, the rule stays. Any support governments do provide will be smaller, narrower and shorter than what was deployed in 2020 or 2022.

  -

  So, why not spend more this time?

  Because the lesson of 2022 is that big government spending during a supply shock makes inflation worse, not better. When prices rise because energy is scarce, giving households and businesses more money to spend does not solve the scarcity. It just lets buyers bid the same scarce energy up to higher prices. The European energy subsidies of 2022 are now widely seen as one of the reasons inflation stayed high for so long, which forced central banks to keep interest rates high, which is what is still squeezing economies today.

  So spending big to cushion the Iran war would not work. It would feed more inflation, force central banks to hold interest rates higher for longer, and cause more economic damage than the war itself.

  This lesson matters even more for governments that have already borrowed heavily in recent years and have very little capacity left to borrow more, which is the case for France, the United Kingdom and Italy.

  -

  Other question: Why does the answer have to be collective? Why not let each country decide for itself?

  Because if one country breaks ranks, the discipline collapses for everyone else.

  Suppose France launched a large energy support programme on its own. Three things would follow.

  First, German, Italian and British voters would see French households receiving help while they receive nothing. The pressure on their own governments to match France would become politically very hard to resist, even for governments that know it is a bad idea.

  Second, the extra French spending would push up demand for energy and other goods across Europe, because the European economies are tightly interconnected. That extra demand would lift prices in Germany, Italy and the UK as well, even if those countries spent nothing themselves. France would be exporting inflation to its neighbours.

  Third, the European Central Bank, which sets interest rates for the whole eurozone, would have to raise interest rates further to fight that extra inflation. Higher rates would then hit every business and every household across the eurozone, including those that never benefited from the French spending in the first place.

  So one country breaking ranks does not just create problems for itself. It exports inflation to its neighbours, forces them to match its spending under domestic political pressure, and triggers higher interest rates that hurt everyone. The only way to prevent that is for every government to commit publicly and together, so that any defector is visibly breaking a shared promise, not simply making a domestic decision.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact is negative. The shock itself has not changed, but the cushion that business leaders may have been quietly hoping for has now been publicly confirmed as not coming.

  In the past two shocks, that cushion was real and it was global. Government spending in the United States lifted demand across the world's largest consumer market, which exporters everywhere benefited from. European energy subsidies kept industrial users in business through the worst of the 2022 price spike. Both reached far beyond the borders of the countries that paid for them.

  This time, neither is coming at the same scale. Businesses everywhere will have to absorb the rising costs, the weaker demand and the squeeze on margins caused by the war on their own, without expecting their own governments to step in and without expecting foreign government spending to lift global demand on their behalf.

  The impact will not be even.

  Europe will feel it hardest, because European economies import the most energy and their governments have the least room to act.

  The United States and Canada will feel it least, because both produce more energy than they consume, so the rise in global oil prices hurts them less.

  The rest of the world sits somewhere in between, exposed to the war through higher energy prices and weaker global demand, but without the support programmes that softened the previous two shocks.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  Business leaders fall into two camps, and the advice is different for each.

  The first camp is those who were quietly hoping their government would step in to help them through the war. If that is you, your planning needs to change this week.

  Go back to your cash flow models and take out any assumption that subsidies or price caps are coming. They are not.

  If you paused your hedging programme because you thought the government would absorb the energy cost for you, restart it now.

  Look at your customer contracts. If you have clauses that let you pass higher costs on to your customers, check whether they actually hold up, because you will need them.

  The second camp is those who were already planning to absorb the shock themselves. If that is you, the Paris statement is quietly good news. Your competitors who were waiting for a bailout are now caught out. You have a head start, so use it. Lock in your supplier contracts now. Refinance your debt while you still can. Put your energy hedges in place. The window is still open, but it is closing as the war drags on.

  And one last thing. If you have been listening to these episodes for weeks and have not yet moved on your inventory, your hedging, your pricing or where you do business, the Paris statement is the last excuse gone. The government is not coming to save you.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Last week, G7 finance ministers and central bank governors convened in Paris to coordinate a response to the severe economic shock triggered by the Iran War and the disruption of the Strait of Hormuz.

The resulting joint statement sent a definitive signal to the global market: there will be no return to the massive subsidy programs seen during the 2020 pandemic or the 2022 European energy crisis. Because governments are prioritizing fiscal responsibility to prevent another surge in inflation, businesses will have to absorb the brunt of rising costs on their own. This shift leaves no room for hesitation, meaning business leaders must rapidly adjust their pricing models and secure supply contracts without relying on state intervention.

Every week on the What It Means for Business podcast, Glenshore's Amine Laouedj cuts through the noise of global economic headlines to explain what is happening, why it matters, and what business leaders should do to adapt.

Available on Spotify and Apple.

Date of production: 26 May 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

Trump Visits Xi in Beijing - The Limits of US-China Decoupling Ambitions

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• Transcript

  INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR

  Welcome. Once a week from London, we break down the most consequential event in the global economy and analyze exactly what it means for your business.

  LAST WEEK'S KEY ECONOMIC EVENT

  Last week, the US President visited Beijing to have bilateral talks with the Chinese President. He was accompanied by a delegation of CEOs from Tesla, Apple, Nvidia, Blackrock, and Boeing.

  This was the first state visit to China by a sitting US president since 2017. The symbolic weight of this was significant.

  The headline coverage focused on whether any major deals were signed and four items were on the table: AI chip exports, rare earth elements, an AI governance framework, and Chinese purchases of American aircraft and farm goods.

  On that narrow test, zero signed agreements, and the summit looked empty. And even the verbal commitments were already being walked back by the US President within hours.

  However, looking beyond, there are three dimensions worth looking at.

  -

  The first dimension is what the US held back.

  Before the summit, the US President had a 14 billion dollar Taiwan arms package pending approval, alongside another 11 billion dollar package from late 2025 that still hasn't been delivered. Neither package moved.

  This matters because since 1979, the US has operated under a framework called the One China policy: The US acknowledges that Beijing claims Taiwan, without endorsing that claim, while arming Taiwan to deter China from taking it by force. Arms sales are how Washington shows how serious that defense commitment is.

  When 25 billion dollars in weapons get frozen right around this summit, the message to China, Taiwan, and the region is that America's commitment has weakened.

  The second dimension is what was recognized.

  The Chinese President opened the summit by invoking the Thucydides Trap. This is a historical reference rooted in ancient Greece. China implicitly compared itself to Athens, the rising power of its time, and the US to Sparta, the established power. The story tells that when an established power faces a rising challenger, they almost always end up at war because neither side knows how to share the top spot.

  By framing the meeting around this concept, the Chinese President asked if both nations could build a new paradigm for relations between great powers. That framing was not challenged by the US President, who offered extensive public praise and maintained silence on Taiwan. This put China on equal footing with the United States.

  The third dimension is the asymmetry.

  There has been a sequence that led to this summit, driven by both China’s leverage over US manufacturing and Trump’s dealmaking style.

  -

  The first step in the sequence came in April 2025.

  The US introduced the Liberation Day tariffs: a sweeping package of import taxes, hitting Chinese goods the hardest. China hit back by introducing strict licensing requirements for seven heavy rare-earth elements and the magnets made from them.

  Rare earths are seventeen metallic elements essential for permanent magnets used in electric vehicle motors, wind turbines, smartphones, F-35 fighter jet components, missile guidance systems, and AI data center hardware. China controls 60% of global mining, 90% of global refining, and 90% of global magnet production.

  The economic consequence was immediate: Chinese magnet exports collapsed by 74% year-on-year, and Automotive manufacturers in the US, Europe, Japan, and South Korea cut production lines or shut factories.

  The US tried to fix it by building a domestic alternative. They invested 400 million dollars in MP Materials, a US rare-earth mining and processing company. But building a non-Chinese supply chain takes years and needs billions in capital and long permitting cycles.

  By mid-2025, the dependency was no longer theoretical. It was binding in real time, and any escalation of a trade war would hit US factories harder than Chinese ones.

  -

  The second step in the sequence was the US deciding to back down.

  The US believes that letting Beijing access the most powerful AI chips would compromise US national security. So for years, they had built up restrictions on advanced chip exports, for example the H200, Nvidia's high-end AI chip.

  Last December, the US President reversed that ban in exchange for a 25% surcharge paid to the US Treasury. The surcharge was unprecedented and was the political wrapper that made the reversal sellable in Washington.

  Then, the final step of the sequence: the Summit.

  Noticeably, it is the US President who went to Beijing, which in diplomatic terms is the lower-leverage position, because the visiting head of state is the one seeking the outcome.

  The US offered concrete concessions on chips and Taiwan posture, in return China offered promises on Boeing aircraft and soybean purchases.

  The soybean piece is particularly weak, because Beijing made a similar commitment in October 2025 to buy 25 million metric tons annually and is already failing to honor it, buying cheaper Brazilian alternatives instead.

  China made no concession on the rare-earth licensing regime that started the entire sequence.

  So, across the whole sequence, the US gave concrete concessions, and China gave verbal commitments on purchases but no concessions on what mattered the most.

  This is asymmetric bargaining. One side has something the other side struggles greatly without reliable access. In this case, China controls the rare earths the US cannot live without. When you hold that kind of leverage, you do not give it up. You use it to extract concessions, again and again. Because the moment you actually solve the problem for the other side, you lose your leverage.

  -

  The global implication is that the summit confirmed a new equilibrium for the US-China relationship: managed interdependence. China holds structural leverage on the inputs that matter most for advanced manufacturing, defense, and AI, and the US has shown it is willing to pay in concessions to access those inputs.

  That said, the summit was not a pure loss for the US.

  The reduction in near-term escalation risk has real value for businesses globally, and the verbal commitments on energy, agriculture, and aircraft, if even partially honored, will support American producers in specific sectors.

  And in a year when the US is already at war with Iran, avoiding open conflict with China in the Pacific is itself a strategic priority, not just a tactical convenience. These benefits are real, but they are tactical and strategic at once, and they do not change the underlying fact: the structural leverage stayed with China.

  WHAT IT MEANS FOR BUSINESS

  So, what does this mean for business?

  For years, US policy toward China was built around the strategy of decoupling: a deliberate effort to reduce US economic and technological dependence on China through tariffs, export controls, and investment into sensitive sectors.

  The goal was to put enough distance between the two economies that future conflict, commercial or military, would not catastrophically disrupt US industry.

  This summit showed the practical limits of that approach and marked a shift toward managed interdependence.

  For most businesses, the change is in the strategic assumptions underneath their plans, not in tomorrow's cash flow.

  So any corporate strategy that has been assuming a continued US push toward decoupling, a stable Taiwan defense posture, or a US-led effort to build non-Chinese rare-earth supply chains on an aggressive timeline, has been operating on an outdated understanding.

  The shift creates clear losers and clear winners.

  -

  Regarding the losers, there are four categories.

  First category includes companies that moved operations out of China.

  If you moved your semiconductor supply chain, your rare-earth processing, or your manufacturing, you did it expecting the US government to help cover the higher cost. That government support is now expected to be weaker than planned.

  The second category includes the companies with supply chain exposure to Taiwan.

  The withdrawal of approximately 25 billion dollars in pending Taiwan arms deals signals reduced US deterrent commitment. Because TSMC produces over 90% of the world's most advanced semiconductors, this practical risk extends to almost every industrial, consumer electronics, automotive, and software business at scale.

  The defense contractors holding those frozen arms packages, particularly Lockheed Martin and Raytheon, also lose directly. The frozen commitments should be considered as withheld revenue, not just delayed revenue.

  Third category includes the global manufacturers that need Chinese rare-earth magnets.

  This hits automotive OEMs in Germany, Japan, and South Korea hardest. The summit confirmed that the April 2025 licensing restrictions are here to stay. Rare-earth magnet flows are now likely to stay at half their pre-restriction level for the foreseeable future. That is the new normal.

  Fourth category includes the US chipmakers like Nvidia and AMD that were counting on a big revenue recovery from China in 2026.

  The summit confirmed that even when chip sales are officially approved, the shipments do not actually happen at scale. Both governments quietly prefer slow execution, because keeping the deal open gives each of them ongoing leverage. The recovery is going to take longer than expected.

  -

  Now, the winners.

  These are the businesses already operating inside the new US-China relationship, not against it. The companies with established China operations and local Chinese partners. The companies in non-strategic sectors that benefit from a calmer trade environment. And US oil and LNG producers, who gain narrowly.

  The Chinese President said he wants to buy more American energy, specifically to reduce China's dependence on the Strait of Hormuz. That signals a long-term shift in where China sources its energy.

  WHAT SHOULD BUSINESS LEADERS DO NOW

  So, what to do now?

  For companies that moved operations out of China, based on the decoupling thesis: stress-test the financial model without the assumption of sustained US policy support. Why? Because the political appetite for paying the cost-differential of decoupling has just been publicly demonstrated to be lower than markets priced in.

  For companies with Taiwan supply chain exposure: build a contingency plan for a degraded US deterrent posture, particularly for any business that cannot tolerate a six-month disruption to TSMC output.

  For automotive and industrial manufacturers that need Chinese rare-earth magnets: plan for 2026 assuming you will get half of what you used to. Start qualifying suppliers in Australia and the United States now, even if they cost more. And lock in long-term contracts immediately, before China tightens the licensing rules again.

  For US semiconductor companies with China revenue baked into 2026 guidance: revise the recovery timeline downward, because the summit confirmed that the December framework produces ceremony, not shipments.

  Now, for businesses positioned to operate inside the new equilibrium, particularly those in agriculture, energy, or aviation: this is the moment to push for clearer terms with Chinese counterparties while the government is in a phase of public openness, because the verbal commitments the Chinese President made will be partially honored to maintain, at least, the appearance of cooperation, and the businesses that lock in early get the largest share of that follow-through.

  OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Last week, US President Trump conducted a high-stakes state visit to Beijing to meet with Chinese President Xi Jinping, accompanied by a major delegation of business leaders.

Although the summit concluded without any formally signed agreements, it signaled a profound shift in the global economy: the practical limits of US-China decoupling, the deliberate effort to reduce US economic and technological dependence on China. As the geopolitical landscape transitions toward a new equilibrium of managed interdependence, business leaders must urgently reassess their strategic assumptions.

Every week on the What It Means for Business podcast, Glenshore's Amine Laouedj cuts through the noise of global economic headlines to explain what is happening, why it matters, and what business leaders should do to adapt.

Also available on Spotify and Apple.

Date of production: 18 May 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

Australian Central Bank Raises Interest Rates for the Third Time

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• Transcript

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome! Once a week, from London, we break down the most consequential global economic event, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  Last week, Australia's central bank, the Reserve Bank of Australia or RBA, raised its base interest rate from 4.10% to 4.35%.

  This marks the third consecutive raise this year, after increases in February and March.

  To understand why a rate decision in Australia matters to businesses globally, you need to understand what the RBA said was behind this decision. But first, some context.

  Since the US and Israeli attack on Iran on 28 February, traffic through the Strait of Hormuz has been restricted. Middle Eastern exports through that route represent 20% of the world's seaborne oil and gas and 30% of global fertilizer trade. Brent crude went from $73 a barrel in January to above $100 last week, having peaked at $126 in early May, with significant volatility throughout.

  Regarding interest rates, central banks set them as the base for their economy, which commercial banks pass on with a margin to businesses and consumers through their loans. When inflation is too high, central banks raise rates to make borrowing more expensive, which slows the economy and reduces inflation. When the economy needs support, they cut rates to make borrowing cheaper, which encourages spending and investment.

  For two years prior to the conflict, inflation was cooling and central banks were cutting rates. Many businesses built 2026 plans assuming borrowing costs would keep falling.

  The shock from the Iran war reversed that. Higher oil prices raised the cost of fuel, shipping, electricity, manufacturing, and food across the supply chain. That pushed inflation back up, which meant central banks could no longer keep cutting.

  Recently, five central banks, the US, Eurozone, UK, Canada, and Japan, all held rates, citing the energy shock as the reason they stopped cutting.

  Now, here is where Australia's decision changes the picture.

  Last week, the RBA went further than holding. It raised rates for the third time this year.

  The first raise in February was driven by domestic inflation that was already elevated before the war, from capacity pressures in the Australian economy.

  The second in March and the third last week were driven by the energy shock compounding that existing problem.

  The critical detail is what the RBA stated: it observed early signs that high energy costs are no longer just raising fuel prices in Australia, they are now feeding into wages, rents, and the prices of goods and services not directly linked to oil.

  This process is called second-round effects. Here is how it works: when energy stays expensive for months, businesses that use fuel, electricity, or shipping face higher costs, so they raise their prices. Workers whose groceries, fuel, and utilities cost more demand higher wages. Those higher wages become a cost for employers, who raise prices again. This creates a cycle where inflation feeds on itself and persists even after the original energy shock fades.

  The RBA cited these second-round effects as a reason for raising rates. It is among the first major central banks to act on this basis.

  The vote was 8 to 1, a much wider margin than the 5 to 4 vote in March.

  The RBA's baseline forecast assumes rates will reach 4.70% by end of 2026, but that forecast depends on oil falling back to $80 by year end, which requires the war to end and the Strait to reopen to all.

  The RBA sees early signs of this process beginning in Australia. Governor Bullock said the current rate is now "a bit restrictive" and gives the RBA space to observe how the conflict plays out. But she warned that if this process deepens and becomes fully embedded in how businesses set prices and workers negotiate wages, even higher rates could be needed.

  And Australia is likely not an outlier. It is just likely ahead of a sequence that other central banks are facing.

  Two weeks ago, in the UK, the Bank of England's central scenario projected at least two rate increases over the coming year. In the Eurozone, the ECB's President Lagarde did not rule out a rate increase in June. In Japan, three members of the Central Bank voted for a raise. In the US, three members of the Fed wanted to remove language suggesting the next move would be a cut.

  The difference is that Australia was already dealing with domestic inflation before the war, which put it further along in the sequence. The energy shock pushed it over the line.

  If second-round effects appear in the UK, the eurozone, or Japan, those central banks will face the same choice.

  Separately, on Friday, the US Bureau of Labor Statistics published its Nonfarm Payrolls report for April. It is a monthly count of how many jobs were added or lost in the US economy, and it is the single most watched indicator of the world's largest economy. 115,000 jobs were added, nearly double the 62,000 expected, with unemployment at 4.3% and wage growth at 3.6% year over year.

  That said, the headline deserves some caution. The government revised February's job numbers down by another 23,000, continuing a pattern of downward revisions throughout 2026. The real picture is likely softer than 115,000 suggests.

  But even with that caveat, the labor market is not collapsing, and that is what matters for the Fed's decision.

  As a reminder, the Fed has two mandates from Congress: control inflation and support employment.

  With the Fed's preferred inflation measure, headline PCE, at 3.5%, well above the 2% target, the inflation mandate says do not cut.

  With employment holding steady, the employment mandate does not require action either.

  Therefore, both mandates point in the same direction: keep rates where they are.

  Because the Fed sets the cost of borrowing in dollars, and most international trade and debt is denominated in dollars, this keeps the global cost of capital elevated.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact is negative, because for the first time in this cycle a central bank has moved from holding to raising rates in response to the energy shock, and the evidence from Australia suggests other central banks may follow.

  In Australia, the impact is immediate: three raises in three months have brought rates back to the peak of the previous cycle, wiping out all the cuts from 2025. Variable-rate borrowers are already paying more, and the RBA's forecast points to 4.70% by year end, conditional on oil falling back to $80.

  For businesses outside Australia, the RBA decision is a signal of what is likely coming. If second-round effects appear in the UK, the eurozone, or Japan, rate increases will follow.

  The businesses hit hardest are those with variable-rate debt in any economy where rates are rising or likely to rise, because their financing costs increase immediately with each raise.

  Energy-intensive businesses face a double pressure, because their input costs keep climbing from the energy shock while their financing costs rise from the rate response to it.

  In Australia specifically, consumer-facing businesses will feel the squeeze as household spending comes under pressure from higher mortgage costs.

  On the other side, businesses with fixed-rate debt locked in before the cycle turned are protected for the duration of those contracts.

  Energy producers outside the Gulf continue to benefit from higher prices.

  And businesses with strong cash positions that do not need to borrow are unaffected by rate increases and can use their financial strength while competitors are constrained.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  The divide is between businesses that still carry variable-rate exposure and those that have already locked in fixed rates.

  If you have variable-rate debt and have not converted to fixed, the urgency increased last week. The RBA has moved. Central banks in the UK and the Eurozone may follow. Once they raise, the fixed rates available will be higher than what you can lock in today.

  If you are in Australia, stress-test your cash flow against 4.70% by year end.

  If you are in the UK or the eurozone, stress-test against two to three raises over the coming year, which matches the UK's central scenario.

  If you have strong cash, low leverage, or pricing power, the opportunity continues to grow: competitors under pressure from rising rates and rising input costs will slow investment, shed staff, and in some cases look to sell assets or divisions.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Last week, the Reserve Bank of Australia announced its decision to raise its base interest rate from 4.10% to 4.35%, marking its third consecutive increase this year. 

While other major central banks recently chose to hold rates, the RBA took action after observing early signs of second-round effects. The prolonged energy shock driven by disruptions in the Strait of Hormuz is no longer just raising fuel costs. It is now feeding into wages, rents, and unrelated goods and services. With the global expectation for cheaper borrowing costs now reversing, Australia's decision serves as a critical warning for what other major economies might face next. 

Every week on the What It Means for Business podcast, Glenshore's Amine Laouedj cuts through the noise of global economic headlines to explain what is happening, why it matters, and what business leaders should do about it to adapt. 

Also available on Spotify and Apple. 

Date of production: 11 May 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

Central Banks Hold Interest Rates

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• Transcript

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  Last week, five central banks made the decision to hold their interest rates. The Bank of Japan on Tuesday, the US Federal Reserve and the Bank of Canada on Wednesday, and the European Central Bank and the Bank of England on Thursday.

  As a reminder, a central bank sets the base interest rate for its economy. Then, commercial banks pass it on with an added margin to businesses and consumers when they ask for a loan.

  Central banks typically use the adjustment of interest rates as a tool to control inflation. When prices rise too fast, they increase rates to make borrowing more expensive which slows demand and reduces inflation. When the economy needs support, they lower rates to make borrowing cheaper which encourages spending and investment.

  Now for context, for two years, inflation had been coming down, and all five central banks had been gradually reducing rates. Companies were building their 2026 plans around the expectation that borrowing would keep getting cheaper.

  Then, the US and Israeli attack on Iran on 28 February resulted in the restriction of traffic through the Strait of Hormuz. Middle Eastern exports that use that route represent 20% of oil and gas energy and 30% of fertilizers globally. With that route disrupted, a large share of it could no longer reach global markets. Brent crude went from $73 a barrel in January to above $110 last week, briefly hitting $126 on Thursday.

  This restriction raised the cost of fuel, shipping, electricity, and manufacturing. Those costs flow through the entire supply chain. And because fertilizers take weeks to months to reach farms and feed into food prices, the full impact on food costs has not yet fully arrived. But this inflation is not from excessive demand but rather from a reduction in supply. So central banks cannot fix the situation by simply increasing the interest rates.

  Instead, all five central banks have decided to stop cutting and instead chose to hold interest rates at their current levels.

  Here is how it unfolded in each region.

  In the US, consumer prices jumped to 4.5% in the first quarter, which is more than double the Fed's 2% target. At the same time, the economy grew at 2%, but that number is misleading because it includes government workers who came back after a federal shutdown and spending linked to the war effort.

  So the real picture is weaker than the headline suggests. With inflation too high to justify a cut and growth too fragile to justify a raise, the Fed held its rate at 3.50 to 3.75%. However, the vote revealed serious disagreement inside the committee: four members out of twelve dissented, the highest number since 1992.

  One of them wanted to cut rates, but the other three wanted the opposite: they wanted the Fed to remove from its official statement any language suggesting that the next move would be a cut. In other words, three members of the committee believe the Fed should no longer be telling the market that rates are heading down.

  On a separate note, Chair Powell is stepping down on 15 May, and the Senate Banking Committee voted to advance Kevin Warsh as his replacement.

  In the UK, the Bank of England held at 3.75%, voting 8 to 1. Chief Economist Huw Pill dissented in favor of a raise. The Bank's central scenario projects at least two rate increases over the coming year.

  In the eurozone, inflation jumped from 1.9% in February to 3% in April on energy costs up 10.9%, while the economy grew just 0.1%.

  When an economy experiences rising prices alongside flat growth, this is called stagflation.

  So, the ECB held at 2%, with its President Christine Lagarde not ruling out a rate increase in June.

  In Canada, as inflation is expected to reach 3% in April, the Central Bank held at 2.25%.

  In Japan, the Central Bank held at 0.75%, but three out of nine board members voted for a raise.

  So, across all five economies, the cutting cycle has ended, and the question is no longer when rates will fall, but whether they will have to rise. The Fed is the most divided of the five, with its committee split on whether the next move should even be a cut, while the Bank of England and the ECB are leaning more clearly toward raises.

  Important to keep in mind that the longer oil stays above $110, the greater risk that we experience second-round effects.

  This is the idea that inflation feeds into wages, rents, and prices of unrelated goods and becomes self-sustaining, even if energy prices go back down. Central banks would then be forced to raise rates into a weakening economy.

  We are not there yet, but each week the war continues, that risk grows.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact is neutral compared to last week in terms of the direction.

  These decisions from central banks just confirm what was already in place. What changed is the certainty.

  But it is important to understand that while nothing new happened, the damage is cumulative. Each week that oil stays above $110 adds another layer of cost that businesses have to absorb, so the pressure is not flat, it is compounding.

  As we covered in previous episodes, the situation remains hardest on energy-intensive operations such as manufacturing, logistics, food production, chemicals, and construction, particularly in the eurozone where growth is closest to zero. Sectors with direct fuel exposure, such as airlines and shipping companies, are hit especially hard because fuel is their single largest cost and they cannot easily substitute it.

  In Japan, businesses face a compounding effect because a weaker yen makes oil imports even more expensive.

  More broadly, the eurozone and Japan import almost all of their energy, which means they absorb the full cost with no offsetting benefit.

  On the winning side, we still have energy producers outside the Gulf who benefit from higher prices.

  The US and Canada are partly buffered because both are major oil and gas producers. Canada is the world's fourth-largest oil producer and a net energy exporter, which means its energy sector benefits from higher prices even as its consumers and manufacturers pay more.

  We also have businesses that locked in fixed-rate debt before the cycle turned. And we have businesses with strong pricing power who can pass through higher costs.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  The advice is the same as in previous weeks, because the situation has not changed.

  But if you have not acted yet, the window is narrowing.

  If you are on the losing side, meaning your costs are rising faster than you can raise your prices, focus on protecting your cash.

  Also, lock in energy supply at fixed prices, stress-test your cash flow against borrowing costs that stay flat or rise, defer capital spending built on the assumption of cheaper financing, and collect faster from customers while extending payment terms with suppliers.

  If you are on the winning side, with pricing power, low leverage, or energy exposure in your favor, move while your competitors cannot. They are pulling back because their margins are under pressure, which means capacity, talent, and corporate acquisitions secured now all compound when the cycle turns.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Last week, five central banks announced their decisions to hold interest rates. The Bank of Japan, the US Federal Reserve, the Bank of Canada, the European Central Bank, and the Bank of England all chose to stop cutting rates as disruptions in the Strait of Hormuz push oil prices above $110 a barrel, with a temporary high of $126. The global expectation for cheaper borrowing costs has vanished. All five are now facing the same challenge: inflation driven by a supply shock they cannot fix, in economies too fragile to absorb a rate increase.

Every week on the What It Means for Business podcast, Glenshore's Amine Laouedj cuts through the noise of global economic headlines to explain what is happening, why it matters, and what business leaders should do about it to adapt.

Date of production: 5 May 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

PMIs Reveal Iran War Is Splitting Global Economy in Two

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• Transcript

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  On Wednesday, we got a fresh batch of business surveys from S&P, and their results tell a very clear story: The war in the Middle East is splitting the global economy in two different directions.

  S&P is a financial data company. Every month, they survey thousands of business executives across major economies, asking whether their activity is growing or shrinking. They compile each country's answers into a number called the Purchasing Managers' Index, or PMI. Above 50 means growth. Below 50 means trouble. The results published on Wednesday are early estimates, and the fastest signal we have to see what is happening on the ground right now.

  Let’s start with Europe.

  The Eurozone composite PMI fell to 48.6, the first time it has been below 50 in 16 months. The index combines two different sectors: services and manufacturing, and the drop was driven almost entirely by services. This sector includes everything from local restaurants to major consulting firms.

  In the Eurozone, services make up 65 percent of the economy. When that number drops, the whole engine starts to stall. Germany and France are both in the red, meaning the two largest economies in Europe are shrinking in their most important sector.

  However, manufacturing moved in the opposite direction, rising to 52.2.

  This creates a strange paradox: factories look busy, but the broader economy is shrinking. The S&P Global report noted that new orders continued to decline even as output rose. This points to precautionary stockpiling rather than genuine demand. Companies are building inventory because they fear supply disruptions and higher prices. This is a defensive reaction to the war, and it makes the economic numbers look better than they really are.

  On a separate note, prices are rising fast.

  Output prices rose at their fastest rate in two years, input costs hit an 11-month high, and shipping times are also getting worse because of the disruptions in the Strait of Hormuz.

  Consequently, the Eurozone is showing early signs of stagflation, the difficult scenario where the economy shrinks while prices rise at the same time. There is no easy fix for a central bank. Cutting interest rates makes inflation worse, but raising rates deepens the contraction.

  The European Central Bank meets next Wednesday, April 29, and this data is waiting for them on the table.

  Now, let us look at the US and the UK. Both came in at 52, both beat expectations, but their situations are very different.

  The US is genuinely shielded because it produces most of its own oil and gas, which means the energy shock hits with much less force.

  The UK is also in a stronger position than continental Europe, thanks to domestic North Sea production and Norwegian pipeline gas, but it is not in the same category as the US. UK input costs rose at their fastest pace in the survey's 28-year history, with 69 percent of manufacturers reporting higher costs. The UK is still growing, but those record cost pressures suggest the shield has limits.

  Now, regarding oil prices. This week, Brent crude shot up to 105 dollars a barrel. That is a 10 percent jump in just five days, and oil is now 55 percent more expensive than it was before the war started.

  Europe will always be more exposed to this kind of shock than the US. It comes down to where they get their energy. That vulnerability is structural. Whether the shock persists depends on the war.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The impact depends entirely on where you are.

  European service businesses are the most exposed.

  The energy shock is no longer just raising their costs: it is now shrinking their revenues. The logic is simple. High energy costs raise the price of everything from electricity to shipping. Businesses must either absorb that cost and lose their margin, or raise prices and lose their customers. In Europe, demand is already falling, which means businesses are getting squeezed from both sides.

  European manufacturers also face a misleading situation. Their order books are full because of temporary stockpiling, not real demand. When that cycle ends, those orders will drop.

  US businesses are in the strongest position, with both growing demand and energy insulation working in their favour. They can pass higher costs to their customers without losing volume.

  UK businesses sit in the middle: their demand is holding, but their cost pressure looks more like Europe than America.

  For companies exporting from the US or UK into Europe, this is an advantage. You have lower relative costs while your competitors are weakening.

  In Asia, India hit 58.3, the strongest reading of any major economy. It reflects the massive momentum of the Indian domestic market, but India imports over 80 percent of its crude oil. The big question is how long their demand can outrun imported energy inflation.

  In Japan, manufacturing is at a 12-year high, but because Japan imports nearly all of its energy, that cost pressure will compound over time.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  If you are operating in Europe, the priority is survival.

  You must stress-test your costs against oil at 110 to 120 dollars a barrel, because the current price of 105 already assumes diplomatic progress that has not happened. Lock in energy contracts now. Cut discretionary spending before you are forced to cut the essentials.

  If you run consumer-facing services, prepare for lower utilization through the summer. And do not expand capacity based on current manufacturing orders. Those orders are inflated by stockpiling and they will normalize.

  For businesses in the US, the UK, or domestic markets in Asia, there is an opportunity to go on the offensive, but size your bets to the divergence lasting, not to it being permanent.

  If you compete with European companies in third markets, take their share now through better pricing or reliability.

  If you source from Europe, renegotiate your terms. Your European suppliers need your business more than they did three months ago.

  And if you are considering mergers and acquisitions in Europe, valuation multiples are compressing in the sectors most exposed to this squeeze, particularly energy-intensive manufacturing and consumer-facing services.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

The Purchasing Managers' Index (PMI) is an economic indicator derived from monthly surveys sent by S&P Global to thousands of business executives. As the conflict in the Middle East continues, the latest data reveals a global economy moving in two different directions: the Eurozone sliding toward stagflation, while the US and UK utilize domestic energy advantages to maintain growth.

Every week on the What It Means for Business podcast, Glenshore’s Amine Laouedj cuts through the noise of global economic headlines to explain the mechanics behind the data and deliver the specific, actionable insights business leaders need to adapt to a changing world and protect their margins.

Date of production: 27 April 2026

Disclaimer: This material is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

China's 5% Growth in a War Quarter

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• Transcript

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  On Thursday, China dropped its economic growth figures for the first quarter of 2026. GDP grew 5 percent compared to last year. That beat the 4.8 percent economists were predicting, and it is a solid step up from the 4.5 percent we saw at the end of 2025.

  But this was not just another quarterly update.

  The war involving the US, Israel, and Iran broke out at the end of February. That means this first quarter covers two months of peace and one month of war. Up until now, all we had were forecasts. This is our first piece of hard data from any major economy covering the conflict. And because of China's sheer size, it gives us our first real look at what is actually happening on the ground.

  Let's look under the hood of that 5 percent.

  Exports grew 14.7 percent across the quarter. But that average is hiding a massive drop-off. In January and February, exports surged 22 percent compared to a year earlier. Then came March, the first month of the war, and export growth collapsed to just 2.5 percent.

  What drove that slowdown? A combination of higher logistics costs from the conflict, some distortions from the Lunar New Year, and a massive 26 percent drop in exports to the US driven by tariffs.

  Meanwhile, local retail sales grew a sluggish 2.4 percent, slowing down to just 1.7 percent in March.

  Factory output, however, grew 6.1 percent and stayed completely stable through the quarter. Within that, high-tech manufacturing, which covers electronics, batteries, and AI hardware, surged 12.5 percent.

  So, what is the bottom line here? Chinese consumers were not the engine of this growth. Foreign buyers were. And even though exports slowed sharply in March, factories just kept humming along at full pace.

  You might be wondering how factories keep running when exports slow down. The answer is lead times. Factories produce to fill orders they received weeks or even months earlier. Those massive orders placed by foreign buyers in January and February were still being built in March, even if fewer of those goods physically left the country due to logistics bottlenecks and tariffs.

  But there is a second reason those factories stayed at full capacity in March, and this one matters a lot more. They could keep producing at a low energy cost, while their European competitors simply could not.

  When the war caused global energy prices to spike, European factories took a heavy hit. China, on the other hand, was insulated for three specific reasons. They had built up massive oil and gas stockpiles before the conflict. They get a huge share of their energy through pipelines from Russia and Central Asia, bypassing the Middle East entirely. And their exports are increasingly skewing toward the very products the world needs when energy is expensive, like EVs, batteries, and solar equipment.

  Because of these built-in buffers, Chinese producers enjoyed a temporary, but significant, cost advantage over Europe in March.

  But stockpiles eventually run out. Buying replacement oil costs a lot more than using what you stored. The second quarter of 2026 will be the first full quarter of war. That is when we find out exactly how long China's advantage holds up.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this actually mean for business?

  The impact is uneven, and it comes with an expiration date.

  Right now, Chinese manufacturers have a temporary cost advantage over their Western competitors because of those energy buffers we just talked about. But that advantage is going to narrow over the next few quarters as those stockpiles deplete.

  Here is the breakdown.

  For companies competing against Chinese manufacturers, particularly European industrial producers, your immediate problem is that your energy costs just spiked while your competitors in China saw almost no change. That widens the price gap between your local products and Chinese imports. German carmakers, machinery producers, and chemical companies are feeling this squeeze the hardest. Japanese and Korean producers are facing the exact same dynamic in third-party markets where they go head-to-head with China.

  Now, if you buy from Chinese suppliers, that same dynamic works in reverse. Your Chinese inputs are still cost-competitive while your local alternatives are getting pricier. That is great news for importers, distributors, and companies building renewable energy capacity, since China completely dominates that hardware supply.

  But there is a third group we need to talk about. Companies that sell into the Chinese consumer market, like foreign luxury brands, automakers targeting Chinese households, or retailers with big operations in China, have a completely different problem. Chinese consumers are still incredibly cautious. That 1.7 percent retail growth in March proves that domestic demand is simply not bouncing back.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  The test comes down to one simple question. Do you compete with Chinese companies, buy from them, or sell to them?

  If you compete with them, hedge your energy and logistics exposure immediately for this quarter. Stress-test your pricing against the Chinese goods landing in your market. You need to decide right now which product lines you defend and which ones you exit. You might even start looking at how to reposition your business toward segments where deep engineering, certifications, or strong client relationships protect you from a sheer volume war. You should also consider M&A to consolidate scale.

  If you buy from China, your window is tight. Lock in your supply and build up selective inventory right now while that cost advantage is still there. Negotiate your longer-term contracts before political pressure in the US and Europe triggers new tariffs. Use this temporary cost advantage to capture market share, not just pad your margins. And start building alternative sourcing in parallel, because again, this advantage will not last forever.

  Finally, if you sell to the Chinese consumer, it is time to rewrite your assumptions. Those consumers are not going back to pre 2020 spending patterns. Your 2026 business plan needs to reflect much weaker retail demand for the rest of the year.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

China reported 5% GDP growth in the first quarter of 2026, the first hard data from any major economy covering part of the Iran war. The headline beat expectations, but the real story is inside the number.

In each episode of the What It Means for Business podcast, Glenshore's Managing Director Amine Laouedj explains what changed last week, why it matters, and what business leaders should do now to adapt.

Date of production: 20 April 2026

Disclaimer: This show is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The Iran War Ceasefire

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• Transcript

  The Iran War Ceasefire | What It Means for Business

  Published: 13 April 2026

  Coverage Period: Sunday 5 April 2026, 00:01 AM to Sunday 12 April 2026, 12:00 PM London time

  Category: Geopolitical

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Once a week, we break down the most consequential global economic event, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  This week, a ceasefire was announced. Markets exploded higher. Oil crashed. We saw the first direct US and Iran talks in decades. Then, those talks collapsed, and the US President declared a naval blockade.

  All of that happened in just six days.

  And yet, after all of that whiplash, the business environment is exactly where it was on Monday morning last week. Let me walk you through what happened.

  On Tuesday evening, the US and Iran agreed to pause the fighting for two weeks in a deal brokered by Pakistan. The central commitment was that Iran would allow ships to pass through the Strait of Hormuz. That narrow passage handles a fifth of the world's oil every single day, along with massive volumes of global container shipping, petrochemicals, aluminum, and fertilizers. Since the war began six weeks ago, Iran has kept it largely shut. That single disruption has been fracturing supply chains and driving up costs across multiple global industries.

  So when the ceasefire hit the news, traders did not wait. Brent crude had been sitting above $113 a barrel on Monday. By Wednesday morning, it was down to $93. That is a $20 drop in a single day, marking the sharpest decline since 2020. The S&P 500 jumped two and a half percent, the Dow gained over 1,300 points, and airlines surged up to 12%. The market was pricing in one thing: the war is ending, the strait is reopening, and cheap oil is coming back.

  That optimism lasted about two days.

  By Thursday, it became painfully obvious that the strait was not actually reopening. In the first 48 hours after the ceasefire, fewer than a dozen ships made it through. To put that in context, more than 120 vessels used to cross every single day before the war.

  Iran's military was still requiring each ship to get individual permission. Reports indicated they were charging transit fees as high as two million dollars per ship, payable in Chinese yuan or cryptocurrency. On top of that, Iran had laid mines in the waterway during the conflict, and reports suggested it had lost track of some of them. Shipping companies had no guidance and no insurance for the crossing. Over 600 vessels remained completely stuck inside the Gulf. On Thursday, the head of Abu Dhabi's state oil company put it bluntly: the strait is not open, and access is being restricted, conditioned, and controlled.

  Then came Saturday. Vice President JD Vance flew to Islamabad for face-to-face talks. Iran sent its parliamentary speaker and foreign minister. With Pakistan mediating, they negotiated for 21 straight hours.

  On Sunday morning, Vance walked out. There was no deal, and both sides blamed each other.

  According to the delegations, the talks covered the Strait of Hormuz, Iran's nuclear program, war reparations, sanctions, and the broader regional conflict including Lebanon. The US said the sticking point was Iran's refusal to commit to not developing nuclear weapons. Iran said the US had made excessive demands and failed to earn its trust. On the strait itself, the gap remained wide. Iran insisted on maintaining sovereign control over the waterway, while the US demanded completely free and unrestricted passage.

  And then things escalated further. Within hours of Vance leaving Pakistan, President Trump announced that the US Navy would immediately begin blockading the Strait of Hormuz, stopping all ships and intercepting any vessel on the open seas that had paid a toll to Iran.

  So here is where we stand. The strait that Iran has been restricting for six weeks now has a US blockade layered on top of it. You have two opposing navies claiming authority over the same 21-mile stretch of water. The ceasefire expires on April 21st, and there is no deal and no obvious path to one.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this actually mean for business?

  The overall impact is neutral, and that is the whole point. This was the most dramatic week since the war started, and yet your operating environment is exactly the same today as it was last Monday. Brent crude opened the week above $110 and closed Friday around $95. The strait was restricted before the ceasefire, it stayed restricted during the ceasefire, and it is still restricted now.

  What moved this week was expectations, not reality.

  For businesses, the mechanics have not changed. Energy costs stay elevated because the physical supply of oil and gas moving through the strait has not increased. Brent has been trading between $90 and $120 for over a month, and that range feeds directly into your diesel, jet fuel, electricity, shipping, and manufacturing inputs. Nothing moves until the strait reopens in a meaningful way. A US blockade layered on top of Iran's restrictions actually makes things harder, because commercial ships now have to navigate two military authorities instead of one.

  The losers have not changed. Companies that depend on imported energy from the Gulf are still operating with input costs 40 to 60% above pre-war levels. That covers most of Asia, significant parts of Europe, and the global shipping and agricultural sectors. Airlines are burning through their fuel hedges. Manufacturers across Europe keep absorbing energy surcharges with no relief in sight. Fertilizer supply is still disrupted, pushing food prices higher across Africa, South Asia, and Latin America.

  The winners have not changed either. US oil producers, energy exporters outside the Gulf, defense companies, and businesses with dollar revenues and no exposure to Gulf supply chains remain in the strongest position. The US energy sector alone is up over 34% this year.

  [WHAT SHOULD BUSINESS LEADERS DO NOW]

  So, what to do now?

  The divide right now is simple. There are companies waiting for the ceasefire to fix things, and there are companies that have already adjusted for a long disruption.

  If you were holding out for a deal to bring your costs down, this week gave you your answer. No deal is coming soon. Even if fighting stops tomorrow, physically reopening the strait will take months. Mines need to be cleared, insurance needs to be restored, and over 600 vessels are backed up.

  If you have been treating these elevated energy costs as temporary, it is time to stop. Lock in your supply contracts at current prices instead of hoping for a drop. Pass those cost increases through to your customers. And if your supply chain depends on anything originating in the Gulf, whether that is crude, LNG, fertilizer, or petrochemicals, make sure your alternative sources are actually contracted and ready to deliver, not just names on a contingency list.

  If you are on the other side of this, the failed talks just removed the one thing keeping you cautious: the possibility of a quick deal erasing the premium. That risk is off the table for now. If you have spare production capacity outside the Gulf, invest in it while margins are wide. If you run logistics with alternative routing already in place, go to your clients and lock in long-term contracts. Right now, they need reliability far more than they need the lowest price.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for joining us for this episode. Have a great week.

A week of dramatic headlines and a temporary ceasefire created the illusion of a major geopolitical breakthrough. But following collapsing negotiation talks and new naval blockades, the operational reality for companies remains exactly the same, leaving the vital Strait of Hormuz restricted and energy and petrochemicals costs elevated.

In this episode of the What It Means for Business podcast, Glenshore's Managing Director Amine Laouedj explains what changed, why it matters, and what business leaders should do now.

Date of production: 13 April 2026

Disclaimer: This show is produced by Glenshore, the boutique investment bank headquartered in London, specializing in cross-border M&A and strategic advisory. The analysis contained in this material reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources. No proprietary or non-public data has been used. The views expressed are those of Glenshore and are provided solely for informational and educational purposes. They do not constitute investment or financial advice and should not be interpreted as a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability arising from reliance upon it for any purpose. Any third-party names, trademarks, or logos referenced in this material are the property of their respective owners and are used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The US Economy “Adds” 178,000 Jobs in March

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  The US Economy “Adds” 178,000 Jobs in March | What It Means for Business

  Published: 6 April 2026

  Coverage: Sunday 29 March 2026, 12:01 AM to Sunday 5 April 2026, 12:00 PM London time

  [INTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

  [LAST WEEK'S KEY ECONOMIC EVENT]

  On Friday, the US published its monthly employment report. It is the single most watched indicator of the world's largest economy. Because the US accounts for a quarter of global output, American hiring data shapes borrowing costs, currency values, and investment decisions in every major market worldwide.

  The headline reported 178,000 new jobs in March, alongside an unemployment rate that dropped to 4.3 percent. This creates the immediate impression of a booming US economy. But when you peel back the layers of this data, you see a very different reality.

  First, we have to look inside that 178,000 number. 35,000 of those jobs belong to nurses and health professionals who were simply returning to work after a strike. Because the US system drops striking workers from the payroll count, their return registers as new jobs. So, this is not genuine hiring. It is just a temporary statistical distortion.

  Second, the government quietly lowered its job creation numbers for January and February. If you average the corrected data for the last three months, the US is actually creating just 68,000 jobs a month. Three months is a short window, and this average could shift with the next revision. But the direction is clear: that pace is less than half what we saw in 2023, and it points to an economy that is decelerating underneath the noisy headlines.

  Third, the drop in the unemployment rate is equally misleading. In the US, you are only counted as unemployed if you are actively looking for work. During March, 400,000 people left the labor force altogether. Some retired, some returned to education, but the scale of the exit strongly suggests that a significant portion simply stopped looking. The government removed all of them from the statistics, which artificially forced the unemployment rate down.

  Ultimately, we are looking at a US labor market that appears strong on the surface, but is rapidly cooling underneath.

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact is negative, because this data makes it significantly harder for the Federal Reserve to cut interest rates for the rest of the year.

  Here is the step-by-step mechanism:

  For the past year, businesses expected the Fed to begin cutting rates in 2026 to support a slowing US economy. However, the Fed is currently fighting inflation driven in large part by oil prices above 110 dollars a barrel. Oil above that level feeds directly into transportation, manufacturing, and food costs, keeping consumer prices elevated.

  To justify cutting rates in that environment, they needed clear evidence of a failing labor market.

  Friday's headline provided the exact opposite. By creating the appearance of a healthy labor market, this report removes any justification the Fed had to lower rates. It forces them to maintain high borrowing costs to fight inflation, regardless of the underlying economic reality.

  The bond markets understood this mathematical reality. Treasury yields, which act as the baseline for global borrowing costs, rose by three to four basis points across all maturities. At the same time, futures markets adjusted to price in a 77 percent probability that rates will not drop at all this year.

  This matters globally because the Federal Reserve sets the cost of borrowing in dollars. When US rates stay high, the dollar remains exceptionally strong.

  If you are operating outside the US, this makes your imports priced in dollars more expensive. It also makes servicing any dollar-denominated debt significantly heavier.

  If your company borrowed in dollars expecting the currency to weaken against your local revenue, that financial gap just widened.

  [WHAT BUSINESS LEADERS SHOULD DO NOW]

  So, what to do now?

  This policy reality creates a clear divide between winners and losers.

  If your business carries variable-rate debt, you must treat today's high rates as the baseline for the rest of the year. The same applies if you plan to borrow money for growth. The prudent response is to move from variable to fixed rates wherever possible. You should renegotiate your credit facilities immediately. If you have an expansion plan for 2026 that relies on cheaper borrowing, you need to rebuild that budget today.

  On the flip side, if you have a strong balance sheet and low leverage, you are looking at a landscape of opportunity. Cash earns more in this environment. As the US labor market cools, top-tier talent becomes available. At the same time, competitors who over-leveraged will come under severe financial pressure. The advantage belongs to those who can act without relying on credit.

  [OUTRO: AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for joining us for this episode of What It Means for Business. Have a great week.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

Satisfying headlines are making the US economy look strong on paper. But underneath, the real numbers tell a different story, and the consequences for companies globally are immediate.

In this episode of the What It Means for Business podcast, Glenshore's Managing Director Amine Laouedj explains what changed, why it matters, and what business leaders should do now.

Date of production: 6 April 2026

Disclaimer: The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The OECD Shuffles Its Economic Projections Worldwide

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  Title: The OECD Shuffles Its Economic Projections Worldwide | What It Means for Business

  Published: 30 March 2026

  Coverage: Sunday 22 March 2026, 12:01 AM to Sunday 29 March 2026, 12:00 PM London time

  ---

  [AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

  ---

  [LAST WEEK'S KEY ECONOMIC EVENT]

  The OECD is the Organization for Economic Co-operation and Development. It is a body of 38 member countries that together produce 60 percent of the global economy.

  Several times a year, it publishes a report called the Economic Outlook. The latest interim report was published on Thursday with its Economic projections for 2026.

  This report covers two projected indicators: The GDP growth rate and the inflation rate.

  On growth, the global headline number is 2.9 percent for 2026, identical to what the OECD projected in December. But that identical number hides a real deterioration.

  By late February, technology investment was accelerating, and Trump tariffs had fallen. Conditions improved so much that the OECD was preparing to revise growth upward to 3.2 percent.

  Then, on 28 February, the United States and Israel struck Iran, and Iran responded by restricting the Strait of Hormuz. As a consequence, oil, gas, and fertilizer prices surged. That shock erased the entire expected revision.

  The positive forces are still present, and they are the reason growth did not fall below 2.9 percent. But instead of producing a stronger economy, they are now offsetting the damage from the energy shock. The world lost 0.3 percentage of growth that was expected to arrive.

  On inflation, the picture is worse. In December, the OECD expected inflation to reach 2.8 percent and then return to 2 percent by mid-2027, the level that central banks consider stable. Last week, the OECD raised its projection to 4.0 percent and pushed the timeline to stability to 2028.

  All of these projections rest on the assumption that the energy disruption is temporary, and that oil, gas, and fertilizer prices begin declining from mid-2026 as the conflict de-escalates.

  If that assumption holds, the projections are achievable. But the OECD itself published a downside scenario in which the disruption persists, and in that scenario the United Kingdom, Germany, and Japan would be pushed into recession.

  ---

  [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

  The overall impact of this report is highly negative for most businesses worldwide, with a narrow set of exceptions in economies and sectors that were upgraded or left unaffected.

  To understand why, you need to understand what the OECD Economic Outlook is used for.

  It is not just a forecast, it is the reference that banks use to price loans, that insurers use to set premiums, and that export credit agencies use to assess country risk. Before Thursday, there was no institutional anchor. Now there is, and every institution that prices risk will adjust to it.

  That adjustment hits businesses directly. When the OECD downgrades a country, banks in that country see weaker revenue prospects and higher costs for their borrowers, meaning the probability of repayment goes down. So banks tighten lending by raising rates, demanding more collateral, and in some cases, simply lending less.

  The downgrade does not just describe a worse environment. It triggers a repricing of credit that makes the environment worse in practice.

  Now, where that repricing hits hardest depends on who got downgraded and by how much.

  The euro area was cut from 1.2 percent to 0.8 percent, and within it, Germany, France, and Italy face the sharpest pressure because they run Europe's most energy-intensive industrial bases. The United Kingdom took the largest G7 downgrade, falling from 1.2 percent to 0.7 percent, with inflation doubled from 2.5 to 4.0 percent.

  For businesses in those economies, revenues barely grow while costs accelerate from both energy and credit at the same time.

  In Asia, the damage runs through energy dependence. Japan imports nearly all of its energy, and over 40 percent of China's oil passes through the Strait of Hormuz. And the OECD warned that financial conditions have tightened most sharply across the region, hitting South Korea and India alongside.

  On the other side, a narrow group stands to gain.

  The United States was the only major economy revised upward, from 1.7 to 2.0 percent, because it produces its own energy. That upgrade means US businesses will access capital on better terms than their European or Asian competitors.

  Canada and Brazil are partially insulated as energy exporters.

  And within sectors, North American fertilizer producers hold the strongest position. They are selling into a disrupted global market while their own costs stay anchored to domestic prices far below what competitors in Europe or Asia pay.

  ---

  [WHAT TO DO NOW]

  So, what to do now?

  For those in economies that were downgraded, the report's most important contribution is not the projection itself. It is the assumption underneath it.

  The OECD assumes the disruption is temporary and that energy prices ease from mid-2026.

  If your business plan is built on that assumption, you are aligned with the institutional consensus, but you are fully exposed to the downside. The defensive move is to stress-test your operating model against the OECD's own worse case for two consecutive quarters.

  If your business cannot survive that, the time to secure credit lines is now, while lenders are still pricing the base case into their terms.

  Once the downgrade flows through to corporate lending, which takes weeks not months, the terms will be worse and the capital harder to access.

  For those in economies that were upgraded or in sectors benefiting from the disruption, the report confirms your pricing power but also tells you when the consensus expects it to end. The OECD projects energy prices declining from mid-2026, which means the margin advantage you hold today has a visible expiration date.

  The offensive move is to lock in revenue at current prices through short-term contracts, while resisting the temptation to invest in capacity that only pays for itself at wartime pricing.

  So, the OECD report is now the baseline that every lender, insurer, and counterparty will use over the coming months. You need to adapt to it now.

  ---

  [AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means for Business. Have a good week.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

Today’s topic: The OECD Shuffles Its Economic Projections Worldwide. With Glenshore's Managing Director Amine Laouedj.

Date of production: 30 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The $3.9 Billion Bet: When DoorDash Acquired Deliveroo to Build a Global Food Delivery Empire. Who Said Profitability?

DoorDash CEO Tony Xu and Deliveroo Founder Will Shu

In October 2025, DoorDash, the leading US food delivery platform, completed a $3.9 billion acquisition of Deliveroo, headquartered in London and operating across nine countries in Europe, the Middle East, and Southeast Asia. In one move, DoorDash extended its footprint from c. 30 countries to 40.

DoorDash dominated the US with a commanding 67% market share but has run out of room to grow at home. Following the purchase of Finland's Wolt in 2022, this deal marked its second major international acquisition and another massive bet that the playbook it used to build its domestic dominance can be replicated across a new batch of markets. DoorDash must now execute this strategy across nine distinct regulatory regimes, against entrenched local competitors, and without the founder who built Deliveroo over the last 12 years.

Can this deal, which makes perfect sense by the standard M&A playbook, survive contact with operational reality?

Listen to a discussion inspired by this article:

Context

The global online food delivery industry generated an estimated $289 billion in revenue in 2024, with the Asia-Pacific region accounting for $130 billion, the Americas at $100 billion, and Europe contributing $45 billion.

The competitive structure varies sharply by market. In the US, DoorDash captures 67% of consumer spending on food delivery, vastly outpacing Uber Eats at 23% and Grubhub at 6%. In the UK, three platforms compete at significant scale with no clear winner. Uber Eats leads with 27.2% of delivery occasions, followed tightly by Just Eat at 25.2% and Deliveroo at 16.2%. In France, Uber Eats is the dominant platform with Deliveroo a distant second. In Italy, four platforms share the market, with Just Eat and Glovo edging out Deliveroo. In Belgium and Ireland, Deliveroo and Uber Eats split the market without either holding a commanding position. Conversely, in the Nordics, Central and Eastern Europe, and Japan, DoorDash operates through Wolt and holds leading positions. In Singapore and three Gulf states (UAE, Kuwait, and Qatar), Deliveroo competes behind locally dominant platforms like Grab in Singapore and Talabat in the Gulf. Crucially, before the deal, the two companies' footprints did not overlap anywhere.

Within this landscape, DoorDash and Deliveroo occupy vastly different realities.

DoorDash (NASDAQ: DASH) was founded in San Francisco in 2013. While Grubhub and Uber Eats fought over prime urban territory in New York, Chicago, and Los Angeles, DoorDash expanded into suburban and rural areas where it was often the only option. That geographic strategy, combined with a proprietary logistics algorithm ("Deep Red") and a $9.99/month subscription program (DashPass, boasting over 22 million members including Wolt+), produced a self-reinforcing cycle. More coverage attracted more consumers. Consumers attracted restaurants. Restaurants generated orders, and order density made the rider network hyper-efficient. By 2024, DoorDash reported $80.2 billion in gross order value (GOV), $10.7 billion in revenue, $1.9 billion in adjusted EBITDA, and its first full year of positive net income at $123 million. But, even after acquiring Wolt in 2022, 85% of its app downloads still originated in the US.

Deliveroo (formerly LSE: ROO) was founded in London in 2013. The company expanded into nine countries, partnering with 186,000 restaurants and 135,000 riders to serve an average of 7.1 million monthly active consumers in 2024. Deliveroo built a premium brand in the UK, pioneering the "Editions" dark kitchen model, delivery-only kitchens that allow restaurants to expand into new neighborhoods without opening new locations. It also cultivated a growing advertising business operating at an annualized run rate of £113 million in Q4 2024 (1.4% of GTV). In 2024, Deliveroo reported £2.1 billion in revenue, £7.4 billion in GTV, and £130 million in adjusted EBITDA. After 12 years of operation, it finally achieved its first statutory profit (£2.9 million) and positive free cash flow (£86 million). Yet, as the market map shows, Deliveroo held a dominant position in none of its nine markets, having already retreated from Australia in 2022 and Hong Kong in April 2025 due to unsustainable economics.

This competitive landscape is entirely dictated by the harsh economics of the business model.

The online food delivery business connects consumers to restaurants through networks of independent riders. The revenue is split three ways between the platform, restaurant, and rider. Platforms take a 15% to 35% commission from restaurants and charge consumers a delivery fee. Margin survival depends entirely on rider utilization rates, meaning how many orders a rider can complete per hour in a specific area. A rider completing three deliveries per hour in a dense zone costs the platform roughly the same as a rider completing one delivery per hour in a sparse zone. The revenue per delivery is similar. The cost per delivery is not. That gap, between a dense zone and a sparse one, is where margin lives or dies in this business.

This creates a competitive trap. Every platform is incentivized to burn cash on promotions to gain local market share because increased order density lowers the cost per delivery. But when every platform spends simultaneously, no one gains a lasting advantage, and everyone bleeds capital. Game theorists call this a prisoner's dilemma. The only escape is to outspend competitors long enough that they either withdraw or underinvest, leaving one platform with the density required to make the math work.

During the pandemic boom, inflated order volumes allowed multiple platforms to coexist. As consumer behavior normalized and interest rates spiked by more than 500 basis points through 2022 and 2023 limiting Venture Capital investments, the underlying economics reasserted themselves. Platforms without dominant local positions could no longer sustain operations, forcing industry consolidation.

The companies that reached sustained profitability, like DoorDash in the US and Meituan in China, did so by achieving overwhelming local density. Hence, a platform's economics are not determined globally. They are decided city by city, zone by zone.

The Deal

The strategic promise of the deal was to fuse DoorDash's technology, deep capital reserves, and logistics infrastructure with Deliveroo's localized restaurant relationships and rider networks across nine untapped countries. The combined entity would operate in nearly 40 countries, serve 50 million monthly active users, and process $90 billion in annual GOV. Notably, DoorDash declined to publicly commit to a timeline for profitability in Deliveroo's markets.

The transaction was an all-cash acquisition at 180 pence per Deliveroo share, a 40% premium to the three-month volume-weighted average price. The offer valued Deliveroo's equity at £2.9 billion and enterprise value at £2.4 billion (factoring in £668 million in net cash), representing implied LFY and FW EV/EBITDA of 18.5x and 13.3x respectively. For context, Deliveroo went public in March 2021 at 390 pence per share (£7.6 billion valuation). Four years later, DoorDash scooped it up for less than half that price. Following the October 2025 completion, Deliveroo delisted from the LSE. Will Shu stepped down, and DoorDash appointed Miki Kuusi, Head of DoorDash International and founder of Wolt, as his successor.

DoorDash CEO Tony Xu led the buy-side. Xu, who immigrated to the US from China at age five, studied at Stanford GSB, worked at McKinsey, and currently controls 69% of DoorDash's voting rights. On the sell-side stood Deliveroo co-founder Will Shu, who built the company from a one-man operation in Chelsea. Armed with degrees from Northwestern and Wharton and a background in finance, Shu uniquely understood the granular realities of the UK market. He delivered food himself for the first eight months and continued doing so periodically throughout his tenure, maintaining a ground-level understanding of the delivery experience that few platform CEOs possess. He navigated Deliveroo through a disastrous IPO, fierce rider classification court battles, and market exits. Miki Kuusi, co-founder of Wolt, stepped in to run operations outside the US and serve as CEO of Deliveroo. While Kuusi successfully scaled Wolt in Helsinki and seamlessly integrated it into DoorDash, he has never operated in the fiercely competitive and heavily regulated corridors of the UK, France, or the Middle East.

The Debate

The Case For

Beyond the publicized technical synergies, the crux of the deal relies on DoorDash's ability to take Deliveroo's subscale operations and force them into sustainable, dense local networks.

DoorDash has done this before. It surged from 18% to 67% US market share over six years through relentless investment in geographic coverage and consumer acquisition. Furthermore, they proved the thesis internationally with Wolt. By layering capital and technology over Wolt while maintaining its localized brand, international revenue grew faster than the US business. By Q3 2025, management reported record international unit economics.

DoorDash brings heavy artillery to target rider utilization. It uses the "Deep Red" routing algorithm, the sticky DashPass subscription model, and a high-margin advertising platform capable of subsidizing market share wars. DoorDash also possesses the balance sheet and investor patience required to endure a multi-year cash burn in Deliveroo's markets if the eventual unit economics justify the cost.

The Case Against

The central question is whether DoorDash's playbook can survive contact with vastly different market conditions, rather than simply relying on capital to brute-force a win.

The three pillars of DoorDash's US dominance are a massive market capable of absorbing sustained losses, fragmentation allowing a clear winner, and gig-friendly labor laws. These are completely absent in Deliveroo's footprint. In the UK, DoorDash faces two entrenched competitors holding over 25% market share. In France, platform work legislation is notoriously strict.

The Wolt precedent also carries caveats. Wolt operated primarily in the Nordics and Eastern Europe, where competitive intensity was lower, and it was often the market leader. Deliveroo is the third-largest platform in its home market. Wolt proved DoorDash could optimize an already dominant platform. It did not prove DoorDash could catapult a third-place platform into first.

Regulatory risk also directly attacks the deal's core mechanism. The UK Employment Rights Bill and the EU's Platform Workers Directive threaten to fundamentally alter rider classification. If courts mandate social security and pension contributions, as Italy already has for Deliveroo, the cost per delivery spikes. DoorDash's technology is designed to optimize rider utilization. European legislation is designed to increase rider cost. These forces are fundamentally opposed.

Furthermore, the competitive environment is hostile. Prosus finalized its €4.1 billion acquisition of Just Eat Takeaway.com also in October 2025. DoorDash isn't fighting a weakening Grubhub. It must now outspend a newly fortified Just Eat and an unyielding Uber Eats simultaneously.

Further Reflections for Business Leaders

For us at Glenshore, this transaction highlights two dimensions that the standard M&A playbook often underweights. These dimensions will ultimately determine this deal's fate.

The first is consumer behavior in multi-platform markets. DoorDash built its US monopoly in suburban regions where it was often the default, solitary option. Consumer behavior was characterized by consolidation. In contrast, European consumers routinely "multi-home," toggling between three or four delivery apps based on instantaneous promotional pricing. In a multi-homing environment, promotional spend generates temporary volume, not durable loyalty. The consumer returns to whichever app offers the best deal on the next order, and no amount of investment changes that reflex easily. DashPass and Deep Red might improve existing order margins, but they cannot inherently solve consumer fickleness. The open question is whether true local density is even achievable in a market resistant to app consolidation.

The second dimension is the loss of institutional capability disguised as a standard leadership transition. The replacement of Will Shu with Miki Kuusi is viewed through a lens of competence because Kuusi is a proven operator. However, "founder imprinting" dictates that a founder's cognitive frameworks and localized regulatory instincts become the DNA of the organization. Shu spent 12 years fighting European labor battles and building credibility with UK restaurant groups. Anthropologist Mary Douglas argued that organizations develop shared cognitive frameworks shaped by the environments in which they operate. Deliveroo's framework was shaped by a decade of navigating European labor law. DoorDash's was shaped by a decade of operating under Proposition 22 in California. These are complementary but distinct forces: Shu imprinted his instincts on Deliveroo, and Deliveroo as an institution developed regulatory reflexes forged by its operating environment. When two organizations with such radically divergent regulatory DNA merge, friction does not surface in strategy meetings. It bleeds into thousands of daily operational decisions about rider pay, compliance posture, and the trade-off between growth speed and regulatory safety.

Closing

By conventional metrics, DoorDash's acquisition of Deliveroo is defensively sound. The infrastructure and geographic synergies are clear, the regulatory path was unblocked, and the valuation was highly opportunistic.

But conventional metrics miss the plot. DoorDash is betting it can forge local density across nine hostile markets against entrenched rivals, under hostile regulatory regimes, in multi-homing consumer cultures, and without the founder who anchored the ship.

The early signals are stark. In March 2026, a mere six months post-acquisition, DoorDash announced the wind-down of operations in Qatar and Singapore (Deliveroo markets), alongside Japan and Uzbekistan (Wolt markets). Citing a focus on "investing where it sees the clearest path to sustainable scale," the diplomatic corporate language couldn't mask the reality: Two of the nine markets that anchored the promise of this $3.9 billion deal have already been abandoned.

The ultimate verdict will be rendered block by block, city by city. If DoorDash manages to build dominant local density in the surviving markets, $3.9 billion will be remembered as a masterstroke. If it cannot, Tony Xu will have successfully built the largest food delivery empire in the world. And when that is your legacy, who cares about profitability, right?

Right?

—

Amine Laouedj Managing Director, Glenshore

I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.

Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.

---

Disclaimer: The analysis contained herein reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources without the use of proprietary or non-public data. The views expressed are those of Glenshore and are provided solely for informational and educational purposes; they do not constitute investment or financial advice, nor a recommendation to take any particular action. This material may contain forward-looking statements, and past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability for reliance upon it for any purpose. Any third-party organization mentioned is the property of its respective company and is used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

The Energy Escalation Freezes Global Monetary Policy

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• Transcript

  The Energy Escalation Freezes Global Monetary Policy | What It Means for Business podcast

  Published: 23 March 2026 | Coverage: 15 March 11:59 AM to 22 March 12:00 PM London time

  [AMINE LAOUEDJ, MANAGING DIRECTOR]

  Welcome. Each week from London, we break down the key global economic event that shaped the past seven days, and we analyze what it means for business.

   [LAST WEEK’S KEY ECONOMIC EVENT]

   Last week, the war in the Gulf escalated dramatically. Both sides started targeting energy infrastructure, and the damage spread far beyond Iran and Israel.

   On Wednesday, Israel struck South Pars, the world's largest natural gas field. Iran depends on it for 70% of its domestic gas supply. The strikes knocked out a significant share of production and shut down Iran's gas exports entirely. Because Iraq depends on Iranian pipelines, it lost a third of its electricity in a single day.

   Iran retaliated within hours. It struck Ras Laffan in Qatar, the largest LNG export facility on earth, and also hit Saudi refineries and energy infrastructure in the UAE. By Thursday, neutral countries were taking direct damage.

   As a consequence, markets moved significantly. Brent crude briefly touched $119 before closing the week around $106, a 45% increase in three weeks. European gas prices have doubled over the same period. And the disruption compounds what was already building. With the Strait of Hormuz closed, a third of globally traded fertilizer and nearly half of all traded sulfur were already trapped. Now production facilities on both sides of the Gulf are being destroyed. Petrochemical inputs, plastics, packaging, are all under pressure, right as the Northern Hemisphere enters planting season. This is not just an energy shock. It is a broad supply chain shock that reaches into food, manufacturing, and consumer goods.

   [REACTIONS FROM POLICY MAKERS]

   In this context, central banks reacted. On Wednesday, the US Federal Reserve froze interest rates. The next day, the ECB, the Bank of England, and the Bank of Japan all did the same. Four major central banks all halted the rate cuts that businesses had been counting on for months.

   Here is why that matters. Before the war, inflation was falling toward the 2% target. Central banks were actively cutting. The Fed had cut by 1.75% through 2024 and 2025. The ECB and the Bank of England had been easing. 2026 business plans were built on the promise of cheaper money.

   Last week's strikes shattered that trajectory. When energy prices surge and supply chains seize up, it costs more to produce and transport almost everything, from factory power to freight to fertilizer to food. That is how a supply shock turns into broad inflation.

   The standard response to inflation is raising interest rates, which makes borrowing expensive and slows consumer spending. When inflation comes from people spending too much, this works. But when it comes from a supply shock, higher rates do not rebuild gas fields or get fertilizer onto ships. They just crush businesses that are already under pressure.

   So why not cut rates to support the economy instead? Because central banks tried exactly that in 2021. Supply disruptions pushed prices higher, central banks assumed it was temporary, and they were wrong. Inflation became entrenched. Every major central banker has promised not to repeat that mistake.

   That is the trap. They cannot cut without risking permanent inflation. They cannot hike without crushing growth. The Fed raised its inflation forecast to 2.7%. The ECB raised its to 2.6% and slashed growth to 0.9%. The Bank of England said the balance has shifted toward a longer hold, or even a hike. Markets that were pricing in rate cuts just weeks ago are now betting on hikes. The era of cheaper money is over.

   [WHAT IT MEANS FOR BUSINESS]

  So, what does this mean for business?

   The overall impact is highly negative.

   Companies are now caught between forces that reinforce each other. Energy costs are surging, input costs across the supply chain are climbing, and borrowing costs are staying high or going higher.

   The most exposed businesses sit in energy-importing economies. Europe is the clearest case. The eurozone imports nearly all of its oil and gas, and its manufacturers depend heavily on petrochemical inputs that are now disrupted. Profit margins are shrinking, demand is weakening, and financing is getting more expensive. Any business carrying floating-rate debt is watching its repayments climb in real time.

   On the other side, producers outside the Gulf are capturing a windfall.

  The United States is the world's largest oil producer, produces most of its own fertilizer, and does not depend on the Strait of Hormuz. US domestic oil is trading at an eight-dollar discount to global benchmarks, giving American industry a major cost advantage.

  [WHAT TO DO]

  Business leaders need to act on three fronts.

  First, do not plan around this being temporary. The strikes last week destroyed physical production capacity. Ras Laffan repairs alone could take up to five years. This is not a price spike that fades when tensions ease. If your 2026 plans assume energy and input costs coming back down, rewrite them now.

  Second, map your supply chain for Gulf exposure. Many businesses do not realize how much of what they buy depends on materials that transit the Strait of Hormuz or are produced in the Gulf. This goes beyond fuel. It includes fertilizers, petrochemical derivatives, plastics, and packaging.

  Third, revisit every assumption you made about borrowing costs. Across the world, rate cuts that seemed certain four weeks ago are now off the table. In some economies, markets are pricing in hikes.

  If you have investment decisions, acquisitions, or expansion plans that were built on the assumption of cheaper financing, the math has changed. Rerun it.

  [AMINE LAOUEDJ, MANAGING DIRECTOR]

  Thank you for listening to this episode of What It Means For Business. Have a good week.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

Today’s topic: The Energy Escalation Freezes Global Monetary Policy. With Glenshore's Managing Director Amine Laouedj.

Date of production: 23 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organisation mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The €4 Billion Bet. When JD.com Acquired Ceconomy in the First Chinese Takeover of a Major European Retailer

Former Ceconomy CEO Kai-Ulrich Deissner and JD.com CEO Sandy Ran Xu

In July 2025, JD.com, China's largest retailer by revenue and the 44th-ranked company on the Fortune Global 500, announced a voluntary public takeover offer for all outstanding shares of Ceconomy AG. By targeting the Dusseldorf-based parent company of MediaMarkt and Saturn, JD.com made a play for Europe's largest dedicated consumer electronics store network. Valued at €4.0 billion in enterprise value, the deal would give JD.com majority control of a retailer operating over 1,000 stores across 11 European countries, employing 50,000 people, and generating €23.1 billion in annual revenue.

The strategic rationale behind the acquisition is highly ambitious. It aims to marry JD.com's world-class logistics technology, supply chain automation, and omnichannel digital infrastructure with Ceconomy's massive physical footprint, brand recognition, and deep customer relationships. The core promise is to transform a traditional European electronics retailer into a seamlessly technology-enabled platform. However, the risk is substantial. Cross-border retail integrations (particularly those spanning vastly different regulatory regimes, languages, labor markets, and consumer cultures) have a long, documented record of destroying precisely the value they set out to create.

Can this deal, which makes strong sense by the standard M&A playbook, survive contact with operational reality?

Listen to a discussion inspired by this article:

The Context

The European consumer electronics market, which generated $325 billion in revenue in 2024 with a steady 3.4% annual growth rate since 2019, is currently defined by a classic oligopoly friction. Germany alone represents a quarter of this continental market, and notably, offline sales still account for 55% of transactions, significantly more than in the United States (45%) or China (40%). Within this landscape, a small number of players dominate. Amazon leads the online cross-border e-commerce space with a 19% share, while traditional retailers like Fnac Darty in France and Currys in the UK and Nordics hold strong regional positions. At the low end, Chinese cross-border platforms like Temu, AliExpress, and Shein are rapidly reshaping price expectations.

Sitting at the center of Europe's physical retail footprint is Ceconomy AG. Created through the 2017 demerger of the Metro Group, Ceconomy operates Europe's largest dedicated consumer electronics store network through MediaMarkt, Saturn, and MediaWorld, boasting over 1,000 stores across 11 countries. Recently, the company has made strides in transforming from a traditional retailer into an omnichannel service platform. Its financial trajectory is improving, with adjusted EBIT rising from €243 million in FY 2022/23 to €378 million in FY 2024/25, and online sales now representing 26% of revenue. However, MediaMarkt and Saturn have historically underinvested in the digital infrastructure required for rapid delivery and data-driven merchandising. Ceconomy’s €337 million in free cash flow simply cannot comfortably fund these massive technology upgrades while simultaneously modernizing stores.

Looking outward for growth is JD.com, the world's third-largest retailer with $159 billion in 2024 revenue. Unlike its domestic rival Alibaba, JD.com owns its inventory and controls its last-mile delivery, reaching over 90% of Chinese orders within 24 hours. But with its domestic GMV growth decelerating to 5-7% annually amid fierce competition from Pinduoduo (Temu internationally) and ByteDance's Douyin (TikTok's Chinese counterpart), JD.com urgently needs international expansion. After a failed attempt to acquire the UK's Currys in early 2024, JD.com set its sights on mainland Europe.

This sets the stage for a convergence. Consumers increasingly demand the best of both worlds: the ability to research online, touch a €3,000 home cinema system in-store, and have it delivered with Amazon-level convenience. Because no European retailer has the cash flow to build that digital infrastructure alone, and no digital platform has built the physical presence required for high-consideration purchases, the gap in the market has been waiting for a unified solution.

The Deal

Enter JD.com's €4.0 billion play for Ceconomy. The core promise of the transaction is pure asset complementarity: JD.com brings world-class logistics technology, capital, and supply chain automation, while Ceconomy delivers a massive physical network, brand trust, and 2 billion annual customer contacts. By assembling these components under one roof, the deal creates a single entity capable of competing on both convenience and advisory-led sales.

Having learned from its approach to Currys, JD.com ensured this was a friendly, meticulously structured offer. JD.com made a voluntary public cash takeover offer for 100% of Ceconomy shares through its subsidiary JINGDONG Holding Germany GmbH, under German takeover law (WpUeG). There was no minimum acceptance threshold.

The offer price was €4.60 per share in cash, a 42.6% premium to the three-month VWAP as of July 23, 2025. This implied €2.2 billion in equity value. Ceconomy carried €1.8 billion in net debt, which JD.com inherits as controlling shareholder, bringing the total enterprise value to €4.0 billion. Ceconomy reported €22.4 billion in revenue and €305 million in adjusted EBIT for FY 2023/24 (ending September 30, 2024), implying 13.1x LFY EV/Adjusted EBIT. By December 2025, when FY 2024/25 results showed adjusted EBIT of €378 million, the trailing multiple had compressed to 10.6x. On FY 2025/26 guidance of €500 million, the forward multiple falls to 8.0x. JD.com priced the deal on the trailing year but bet on the improving trajectory. The offer exceeded the €4.17 entry price of Ceconomy's largest institutional shareholders. JD.com financed the acquisition through a combination of balance sheet cash and new debt. The split and post-deal leverage remain undisclosed.

Crucially, the deal was anchored by a pre-committed local partner. The Kellerhals founding family, operating through Convergenta Invest GmbH, tendered a small fraction of their shares but retained a 25.35% stake to remain alongside the new majority owner. Combined with irrevocable commitments from exiting institutional shareholders like Franz Haniel & Cie and Beisheim Stiftung, JD.com secured 57.1% of the company before the acceptance period even opened. By the close of the additional period in December 2025, JD.com achieved effective control of 85.2%.

To ensure operational stability, JD.com agreed to keep Ceconomy as a standalone business. Headed by incoming CEO Remko Rijnders, who replaces Kai-Ulrich Deissner following his strategic stewardship of the sale, Ceconomy will retain its Dusseldorf headquarters, brand architecture, and its own technology stack. Furthermore, workforce protections are guaranteed for at least three years, and German co-determination rights are explicitly maintained.

JD.com's CEO Sandy Ran Xu assumed the role in May 2023 after three years as CFO. She spent nearly two decades at PwC as an audit partner, working across Chinese and U.S. capital markets. The Ceconomy deal is the signature transaction of her international expansion strategy.

Ceconomy's CEO Kai-Ulrich Deissner led the strategic rationale on the sell side. He joined as CFO in February 2023 and was appointed CEO in May 2025, bringing over a decade of CFO experience at Deutsche Telekom, including at Hrvatski Telekom in Croatia. Both Ceconomy's Management Board and Supervisory Board endorsed the deal. Deissner announced his resignation in March 2026 for personal reasons, with CFO Remko Rijnders proposed as successor.

The transaction smoothly cleared antitrust hurdles by the Bundeskartellamt due to a lack of competitive overlap. However, as of March 2026, the deal still awaits final clearance from foreign investment reviews under Germany's AWG and equivalent frameworks in Austria, Spain, France, and the EU Foreign Subsidies Regulation (FSR).

The Case For

The strongest argument for this acquisition lies in its resolution of a structural impossibility. JD.com has no organic path into European physical retail; building a trusted store network from scratch would take a decade. Conversely, Ceconomy cannot organically generate the capital or technological leap required to meet the modern pace of retail.

Because their respective strengths operate on entirely different layers of the business, the combination is highly feasible. JD.com’s vertically integrated logistics, AI-driven demand forecasting, and automated warehousing are back-end infrastructure. Ceconomy’s local brand recognition, advisory-led selling model, and physical footprint are front-end, customer-facing assets. This separation makes it structurally possible to upgrade the plumbing without dismantling the retail engine that actually generates the revenue. JD.com can transfer technology selectively while Ceconomy retains autonomy over labor relations and brand decisions where local nuance is critical.

Further bolstering this strategic logic is the remarkable level of stakeholder consensus. Achieving 85.2% control without a minimum acceptance threshold (backed by unanimous board recommendations and a committed founding-family partner) is incredibly rare in European M&A. JD.com’s robust workforce commitments, including guarantees against compulsory redundancies and store closures, not only protect employees but strategically mitigate the political friction typical of European foreign investment screenings.

Finally, the leadership driving the integration possesses deep credibility. JD.com CEO Sandy Ran Xu brings two decades of financial discipline from PwC, essential for managing the transaction’s leverage. On the other side, Ceconomy's management has already proven their standalone strategy works, having grown adjusted EBIT significantly over the last two years. This track record suggests that JD.com is injecting technology into an accelerating engine, rather than attempting to resurrect a failing one.

The Case Against

However, the theoretical elegance of this deal masks immense execution complexity. Consumer electronics retail involves managing thousands of SKUs, varying margin profiles, and complex return rates. Attempting to manage this from Beijing through a German holding company, while transferring technology built exclusively for the Chinese market, is an extraordinary operational hurdle. JD.com has world-class domestic logistics, but absolutely no track record managing European labor relations or physical stores in Western markets.

This complexity is compounded by the fragmented nature of the European market. JD.com is not entering one market, but eleven, each with distinct labor laws, consumer protection regimes, and languages. Germany’s Mitbestimmung (co-determination) system, separate branding in Italy, and hyperinflationary accounting in Turkey require highly localized management. Furthermore, the political climate remains tense; the pending foreign direct investment screenings across four countries and the EU present genuine veto risks regarding data sovereignty and critical infrastructure.

History also offers a sobering precedent for cross-border retail M&A. When Walmart entered Germany in 1997 (Wertkauf and Interspar), it failed to adapt its supply chain prowess to local consumer preferences and labor norms, resulting in a costly exit nine years later. Similarly, Tesco's expansion into the U.S. (Fresh & Easy) resulted in a £1.2 billion write-off because it imposed a domestic operating model onto a foreign market. Nothing in JD.com's history guarantees its ecosystem (built on dense urban populations, low delivery labor costs, and integrated WeChat payments) will translate effectively under Europe's strict GDPR constraints and higher labor costs.

Beyond historical warnings, immediate competitive risks loom large. Amazon is relentlessly expanding its same-day delivery infrastructure across Europe, while platforms like Temu reshape budget pricing. If JD.com's entry sparks a delivery-speed arms race, the capital required to compete could rapidly exceed the financial parameters initially modeled for the deal.

Reflections for Business Leaders

For us at Glenshore, observing this transaction highlights three dimensions that the standard M&A playbook often underweights, which will ultimately determine this deal's fate.

First is the technology-transfer paradox. The deal assumes that technology is Ceconomy's primary bottleneck. However, Ceconomy has already driven a 56% increase in adjusted EBIT over two years without JD.com’s help. The actual binding constraint may not be software, but rather organizational capacity, the ability of 50,000 employees across 11 countries to absorb new systems and performance expectations without disrupting the €23 billion revenue engine. If the bottleneck is organizational, this is a continent-scale change management project, not just an IT migration. JD.com’s willingness to let Ceconomy operate standalone suggests an awareness of this risk, but it remains to be seen if that autonomy can survive the natural operational instincts of a majority owner.

Second is the critical gap between tangible assets and intangible capabilities. Financial models easily value store counts and logistics throughput. But Ceconomy’s true value lies in localized merchandising, co-determination-compliant labor relations, and the deep consumer trust required to sell a €4,000 kitchen renovation. These intangibles reside in the organization's culture, in the behaviors of store managers and sales staff, in relationships with local suppliers and service partners. A warehouse can be rapidly automated, but consumer and employee trust, once eroded by a clunky systems transition or cultural friction, is nearly impossible to rebuild with technology alone. Business leaders evaluating this deal or similar transactions should ask not just "What are the synergies?" but "Which of the target's capabilities are load-bearing, and which are at risk from the integration process itself?".

The third is the long-term measure of stewardship. The meaningful metric of this transaction is not whether JD.com achieved majority control at an attractive multiple, or if antitrust clearance was secured. The true test will be whether, five years from now, MediaMarkt and Saturn are structurally stronger, with more engaged employees and a wider competitive moat against Amazon and Temu.

Closing

Ultimately, JD.com's acquisition of Ceconomy is financially sound, strategically logical, and supported by an unusual degree of shareholder consensus. The architects of this deal have painstakingly set up the conditions for success: standalone autonomy, robust workforce protections, a patient founding-family partner, and the vast financial resources of a $159 billion parent company.

The immediate danger, however, is that JD.com might treat this integration merely as a software upgrade rather than a highly complex human-capital challenge. Automating warehouses is ultimately less difficult than merging a hyper-efficient Chinese e-commerce culture with 50,000 retail employees spread across eleven distinct European labor markets. The moment integration efforts begin to degrade the advisory-led customer service that defines MediaMarkt and Saturn, JD.com will start destroying the exact asset it just paid billions to acquire.

In the end, the success of this deal will not be measured by the speed of the technology transfer. It will be measured by whether JD.com possesses the strategic restraint to let Ceconomy run its stores on the front lines, while quietly and patiently fixing the logistics plumbing behind the scenes. In a competitive landscape that will not wait for integration to finish, not overreaching will likely be JD.com's greatest challenge.

—

Amine Laouedj Managing Director, Glenshore

I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.

Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.

---

Disclaimer: The analysis contained herein reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources without the use of proprietary or non-public data. The views expressed are those of Glenshore and are provided solely for informational and educational purposes; they do not constitute investment or financial advice, nor a recommendation to take any particular action. This material may contain forward-looking statements, and past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability for reliance upon it for any purpose. Any third-party organization mentioned is the property of its respective company and is used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

IEA Releases 400m Oil Barrels from Strategic Reserves

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• Transcript

  [PART 1]

   This past Wednesday, the global energy board shifted. Operating through the International Energy Agency, thirty two governments unanimously agreed to release 400 million barrels of crude oil from their strategic stockpiles. To put that number in perspective, the world consumes roughly 100 million barrels a day. Releasing 400 million barrels represents one third of all government holdings. It is a historic, massive injection of supply.

   To understand the stakes of this release, we must look at the context of the physical market. Since late February, military strikes have effectively closed the Strait of Hormuz. This vital waterway normally handles twenty percent of the world daily oil supply. Insurers cancelled coverage, and shipping stopped. By last Sunday, the market was panicking about a massive physical shortage, and the price of Brent crude surged to $119 a barrel.

   The coordinated reserve release on Wednesday was designed to break that panic. Physically, the reserves are highly effective. The United States alone can pump over four million barrels a day into the market from its salt caverns.

   But the agency was not acting alone. Saudi Arabia and the Emirates had already activated massive bypass pipelines built specifically for a Strait closure. These systems push eight and a half million barrels of oil straight to the Red Sea and the Gulf of Oman.

   Between the massive strategic reserves and the Gulf bypass pipelines, the immediate physical shortage of crude oil was bridged. The world proved it could temporarily replace the lost volume. But make no mistake, this is a patch, not a permanent cure. If the Strait stays closed for a year, those reserves will deplete, and the bypass pipelines cannot mathematically replace the twenty million barrels a day that normally transit the Gulf.

   [PART 2]

   So what does this historic release mean for business. The overall impact of this specific event is highly positive. The intervention successfully averted a catastrophic physical supply chain collapse and effectively capped a runaway price spiral.

   We saw this positive reality price in by the end of the week. The immediate reaction to the Wednesday release was exactly what governments wanted. Prices dropped to $90 on the announcement. But by Friday, the price bounced back to $103, and it has stayed there.

  The price bounced because the market realized the difference between a temporary volume fix and systemic friction. The strategic reserves and the pipelines solved the immediate volume problem, which is a massive win. But the friction of moving that oil is now immense. Iran has absolutely no incentive to reopen the Strait. Insurers have no mathematical reason to underwrite vessels entering a warzone. And the bypass pipelines are running at maximum capacity, making them prime military targets. If one of those bypass pipelines is actually struck, that $103 price ceiling shatters instantly. Furthermore, loading tankers in the Red Sea is slower and vastly more expensive than normal operations. The $103 price tag is the market pricing in this structural friction, while thanking the reserves for preventing $150.

   However, this new $103 baseline still acts as a heavy inflationary pressure on the business environment. Higher crude means higher diesel. Diesel moves everything by road and sea, so freight costs rise across every single physical supply chain. Petroleum is also the foundational feedstock for plastics, packaging, and industrial chemicals.

   But the most severe shock is in agriculture. This is where the pipeline bypass completely fails the supply chain. The Middle East is a massive manufacturer of agricultural fertilizers. While they can pump liquid oil through a pipeline to escape the blockade, they cannot pump solid fertilizer. Those physical cargo ships are completely trapped. Roughly one third of global fertilizer trade is physically stuck behind the Strait. Urea prices have already surged massively. If you are in food production, retail, or farming, the physical fertilizer shortage of today becomes a massive food cost increase within three to six months.

   Within this new environment, there are distinct geographic and sectoral winners and losers. Energy importing economies with high Gulf dependence carry the heaviest burden. Japan buys seventy percent of its oil from this region. Europe relies heavily on Gulf jet fuel. Their industries are now paying significant premiums that will severely compress their margins.

   On the flip side, there are clear beneficiaries. If you produce oil outside the Middle East, in places like the United States, Norway, Brazil, or Canada, your assets just jumped forty percent in value. If you operate alternative logistics, like railways or shipping routes around the Cape of Good Hope, you now possess the most valuable infrastructure in the world.

   Business leaders must act on the distinction between a temporary physical buffer and a permanent market cost. First, if you have energy procurement contracts coming up for renewal, lock them in at the current forward curve. Do not wait for a dip that no actor has an incentive to deliver. Second, if you depend on Gulf sourced crude, gas, or agricultural chemicals, begin qualifying alternative suppliers today. Finally, if you sell products with energy intensive inputs, adjust pricing now. Absorbing $103 oil without repricing erodes margin in a way that is very difficult to recover.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

In this episode: IEA Releases 400m Barrels from Strategic Reserves. With Glenshore's Managing Director Amine Laouedj.

Date of production: 16 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

Mergers and Acquisitions: Why Acquirers Overpay for One Type of Deal and Underpay for Another

Companies spend more than $3 trillion on acquisitions every year. In most transactions, the acquired business is worth less after the deal than it was before. The rate at which acquisitions fail to deliver the value expected sits between 70% and 90%. That statistic has remained stubbornly stable for decades, surviving waves of process improvement in due diligence, integration planning, and post-merger management.

In 2011, the late Clayton Christensen and his colleagues proposed a theory in the Harvard Business Review to explain this persistent failure. Their argument was that the problem originates not in how acquisitions are integrated, but in a prior strategic error: a failure to correctly identify what is being acquired.

Executives and their M&A advisors confuse two fundamentally different types of deals, one that improves current operations and one that could transform a company's growth trajectory. When you misidentify what you are buying, you pay the wrong price and you integrate the wrong way. Both errors destroy value, but they destroy it in different directions.

The framework Christensen proposed remains one of the most cited in the M&A literature, and, from experience, one of the least applied in practice.

What follows is an examination of the framework itself, the errors it explains, and what it means for business leaders on both sides of a transaction, notably whether the business survives the transaction.

Listen to a discussion inspired by this article:

The Framework

Christensen defined a business model as a system of four interdependent elements, which include a customer value proposition, a profit formula, resources, and processes.

The critical distinction lies in the portability of these elements. Only resources, such as a patent portfolio, a distribution network, or a customer base, can be easily extracted from one company and redeployed within another. They exist independently of the organization.

Processes, however, are embedded in the relationships, habits, and institutional memory of the people. They represent the "tacit knowledge" of an organization. Unlike resources, processes rarely survive the dissolution of the organizational context in which they were developed.

From this distinction, Christensen identified two categories of acquisition that require opposite approaches to pricing, integration, and post-close governance.

Leveraging Your Business Model Transactions

In a "leverage my business model" (LBM) deal, the acquirer buys resources to plug into its existing operations. The target’s standalone operating model is dissolved, its resources are absorbed, and value is captured through synergies.

Most acquisitions are LBM deals, and they deliver value only under highly specific conditions.

Cost Synergies only materialize when the acquirer has high fixed costs and the target’s resources are compatible with existing processes. A heating oil retailer buying a competitor on the same route lowers costs; buying one in a distant city merely replicates the cost structure.

The same logic applies to revenue synergies, particularly cross-selling. The strategy only holds if customers need to buy the combined products at the same time and in the same place. Gas stations and convenience stores converge because drivers buy fuel and snacks on the same trip. However, when Sanford Weill assembled Citigroup in the late 1990s by merging Citicorp (banking), Salomon Smith Barney (brokerage), and Travelers (insurance), the premise was that one company could serve all of a customer’s financial needs more efficiently. The strategy failed because each of those needs arises at a different point in a customer's life. The condition for synergy did not hold.

Even when synergies are real, the result is a step change. The company's share price adjusts to a new plateau, then resumes growing at roughly its weighted-average cost of capital. The market typically prices the full potential of an LBM deal within a year, because investors already understand both businesses and can assess the integration outcome. Executives who expect an LBM deal to unlock unexpected, compounding growth are expecting something the deal structurally cannot deliver. This is the mechanism through which LBM deals lead to overpayment. The acquirer pays a price that reflects transformative expectations for a deal that can only produce incremental improvement.

Reinventing Your Business Model Transactions

The second category, "reinvent my business model" (RBM), involves buying a way of operating. This is a specific combination of processes, culture, economics, and customer relationships that functions as a system. The value lies not in any separable component, but in how the components interact.

Where LBM deals dissolve the target, successful RBM deals preserve the target's operating model intact. The acquirer provides capital, strategic support, and access to resources while leaving the core processes and culture undisturbed. In these deals, the pricing error typically runs in the opposite direction. Analysts often value disruptive RBM targets based on the size and margins of their current market segment. They fail to model the company’s ability to move upmarket, segment by segment, into progressively higher-margin products.

Every valuation based on current comparables therefore tends to underestimate the company’s future revenue trajectory because it ignores the markets the company will eventually compete in. Acquirers either negotiate the price down to what the current market supports, paying less than the business is worth, or they walk away from the deal altogether because they are convinced the seller is overreaching.

EMC’s 2004 acquisition of VMware illustrates RBM logic applied correctly. EMC, a storage hardware giant facing commoditization, acquired the privately held server virtualization software company for $635 million in cash. At the time, VMware’s revenues were approximately $218 million. VMware's software was disruptive to server hardware vendors but complementary to EMC's storage business. Had EMC absorbed VMware into its own operations, it would have destroyed the processes and profit formula that constituted the value.

EMC recognized this and operated VMware as a separate subsidiary headquartered in Palo Alto. It was led by its own CEO (Diane Greene) and maintained its own brand, products, and engineering culture. By 2010, annual revenues reached $2.6 billion. When EMC took VMware public in 2007, the IPO valued the company at approximately $19 billion.

The Cost of Misidentification

The Daimler-Chrysler merger of 1998 remains the definitive illustration of what happens when this distinction is ignored. Daimler-Benz acquired Chrysler Corporation for $36 billion. On the surface, the purchase of one car company by another looked like a straightforward resource acquisition.

From about 1988 to 1998, Chrysler had aggressively modularized its products, outsourcing subsystems to tier-one suppliers. This simplified its design processes to the point where Chrysler could cut its design cycle from five years to two (compared with approximately six years at Daimler) and design a car at one-fifth the overhead cost Daimler required. The result was a sequence of popular models and nearly a point of market share gained per year. The value in Chrysler resided in its processes and its profit formula, the way it operated, not in its brands, factories, dealers, or technology.

When Daimler announced the deal, integrations were expected to eliminate $8 billion in redundant costs. What followed was LBM-style absorption. Daimler folded Chrysler's resources (brands, dealers, factories, technology) into its own operations, and in doing so dissolved the processes and profit formula that had been the basis of Chrysler's competitive advantage.

The entire senior leadership team responsible for Chrysler's turnaround departed within three years. By 2001, Chrysler's losses exceeded $1.9 billion at the operating level, and in 2007, Daimler divested.

Daimler applied an LBM integration approach to what was, in substance, an RBM acquisition.

Reflections for Business Leaders

For us at Glenshore, the value of Christensen’s framework is that it provides analytical clarity to a distinction that stakeholders often perceive intuitively but rarely see reflected in the Standard M&A Playbook.

In practice, the boundary between LBM and RBM is never perfectly sharp. Every company has both resources and processes. The question is where the preponderance of value lies.

For many businesses, the competitive advantage is deeply embedded in how the company operates: the culture, the decision-making habits, the relationships with suppliers and customers, the tacit knowledge held by long-tenured employees. These are the business model.

For acquirers, the framework demands a form of honesty that deal momentum often discourages. Before modelling synergies, before negotiating price, the buyer must answer a prior question about whether they are buying resources or a system. If the answer is a system, then the Standard M&A Playbook (consolidate, eliminate redundancy, extract cost savings) will destroy precisely what made the target worth acquiring. The EMC-VMware outcome was the product of a buyer who understood what it had purchased and governed accordingly.

For sellers, the framework reframes the logic of a transaction. The relevant question is no longer only what price can be achieved. It becomes what kind of buyer is sitting across the table. A buyer who recognizes the acquisition as RBM and commits to preserving the operating model is a fundamentally different counterparty from a buyer who intends to absorb, consolidate, and extract synergies. The first will sustain what was built. The second, however well-intentioned, will dismantle it.

Ultimately, an M&A transaction process designed to protect the interests of all parties must generate data not only on what a buyer will pay, but on what they will do. Which functions will be consolidated, which leaders will be retained, and what decision-making authority will remain with the acquired business? These questions determine whether the acquisition captures value and, even, whether the business actually survives the transaction.

—

Amine Laouedj Managing Director, Glenshore

I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.

Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.

---

Disclaimer: The analysis contained herein reflects publicly available information as of the date of publication, sourced from official filings, academic literature, and verified secondary sources without the use of proprietary or non-public data. The views expressed are those of Glenshore and are provided solely for informational and educational purposes; they do not constitute investment or financial advice, nor a recommendation to take any particular action. This material may contain forward-looking statements, and past performance is not indicative of future results. Glenshore makes no representations or warranties regarding the accuracy or completeness of this information and disclaims any liability for reliance upon it for any purpose. Any third-party organization mentioned is the property of its respective company and is used strictly for identification purposes. This material may not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

Strait of Hormuz Shuts Down

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• Transcript

  [PART 1]

  On February 28th, the United States and Israel launched joint military strikes on Iran. Iran retaliated, including with attacks across the Gulf countries, and then declared the Strait of Hormuz closed. The Strait of Hormuz is the narrow sea passage between Iran and Oman, through which about 20% of the world's oil and natural gas moves every single day. Iran threatened to destroy any vessel that attempted to cross, and over the course of the week, at least six vessels were struck.

  Now in normal times, every commercial vessel crossing a high-risk waterway carries something called war risk insurance, which covers damage or loss caused by military action. Without it, the financial exposure on a single loaded tanker runs into hundreds of millions of dollars. Within days of Iran's declaration, the major insurers cancelled war risk coverage for the strait, and once the insurance disappeared, no shipowner could justify sailing anymore. Every major container line suspended operations, and traffic collapsed by 90%.

  Then Iranian drone strikes hit Qatar's Ras Laffan complex, which is the largest export facility in the world for LNG. LNG stands for liquefied natural gas, it is natural gas cooled to liquid form so it can be shipped by tanker. Qatar supplies roughly 20% of the world's LNG, and QatarEnergy, the state energy company, halted production and declared force majeure on its delivery contracts. Force majeure is a legal clause that releases a company from its obligations when extraordinary circumstances make performance impossible. So that supply went offline.

  Two chains converged last week. The insurance withdrawal closed the strait to oil, the military strikes shut down Qatar's gas, and both fed into energy prices. Brent crude, the global benchmark for oil traded in London, was trading around $73 before the strikes began, and at Friday's close it stood at $93. That is its largest weekly gain since the pandemic crash of 2020.

  [PART 2]

  The impact on businesses is negative and immediate, and the transmission channel is energy cost.

  Oil at $93 feeds directly into diesel, electricity, heating and industrial gas. Now the heaviest exposure sits in Asia, where about 84% of crude oil that normally passes through the Strait is bound. Japan, South Korea, India and China all depend on it. Europe faces a different pressure through gas, because Qatar supplies 12 to 14% of Europe's LNG imports, and that flow has now stopped. But energy markets are global, so a supply shock in the Gulf raises prices everywhere.

  And this is a supply shock, not a demand surge. The oil exists, it is sitting in tankers anchored on either side of a strait that no one can cross. Prices are rising, but not because economies are growing. The global economy was already softening before this crisis, the US for example lost 92,000 jobs in February, far below what forecasters expected, and an economy that is already weakening has no cushion to absorb a sudden rise in costs.

  Now if the crisis resolves quickly, the damage is manageable, energy prices fall back and shipping will resume. But if the strait stays closed for weeks, the economy moves toward what economists call stagflation. Stagflation is when inflation keeps rising while economic growth stalls or contracts, and here is why it is so dangerous.

  In a normal slowdown, central banks cut interest rates, lower rates make borrowing cheaper, cheaper borrowing means businesses invest and consumers spend, and that spending restarts growth. But that tool only works when prices are stable. When inflation is rising because of a supply shock, more spending does not produce more oil, it just pushes prices higher, so central banks cannot cut. But if they hold rates to contain inflation, borrowing stays expensive, and meanwhile customers squeezed by higher energy bills spend less. Revenues weaken while costs rise.

  The policy that fights inflation deepens the slowdown. The policy that fights the slowdown accelerates inflation.

  Now a shipping disruption is reversible, the day the strait reopens the oil flows again. But here is the deeper risk. When tankers cannot leave the Gulf, the oil that keeps being pumped has nowhere to go, it fills up storage tanks on shore.

  Iraq has already cut 1.5 million barrels per day because its tanks are full, Kuwait has started cutting too. And once you

  shut down an oil well, you cannot just turn it back on, it takes months to restart. So the longer the strait stays

  closed, the less oil exists at all, and at that point the disruption is no longer about shipping, it is about supply that has disappeared.

In each episode, we break down the key global economic event that shaped the past seven days and analyze what it means for business.

In this episode: Strait of Hormuz Shuts Down. With Glenshore's Managing Director Amine Laouedj.

Date of recording: 9 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organisation mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

US and Israel Strike Iran

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• Transcript

  [PART 1]

  Throughout February, the United States and Iran had been holding indirect talks through Oman over Iran's uranium enrichment programme. On Thursday 26 February, both sides met in Geneva for a third round. The Omani mediator reported significant progress. Both sides agreed to continue in Vienna the following week.

  However, on Saturday 28 February, the United States and Israel launched a joint military attack on Iran. They struck military installations, nuclear facilities, and government compounds across the country, killing their Supreme Leader. He is Iran's highest political and religious authority, above the president and all other institutions. President Trump stated the objective was regime change.

  Iran responded within hours, firing missiles at US military bases in Bahrain, Kuwait, Qatar, and Jordan, at targets inside Israel, and at civilian infrastructure across the Gulf. Multiple regional states closed their airspace. Dubai shut both its airports. Emirates and Qatar Airways grounded their fleets.

  At Friday's close, before the strikes, Brent crude stood at just over $72 a barrel.

  [PART 2]

  So what does this mean for business? The impact is negative for most, and the uncertainty is extreme.

  Start from the geography. Iran sits on the northern shore of the Strait of Hormuz. Nearly 20% of the world's oil flows through that waterway every day. Missiles are now flying across it. So when oil markets reopen, they will price the risk that this flow could be interrupted. And that means a sharp move upward in energy costs.

  Now here is why that matters beyond the price of a barrel.

  Higher oil costs travel through supply chains. They raise the cost of shipping, of running factories, of producing anything that requires heat, transport, or chemical inputs. They also raise the cost of fertilizer, which means food prices follow.

  And because all of this pushes inflation higher, central banks lose the ability to cut interest rates. Here is why. Lower rates make borrowing cheaper, cheaper borrowing means more spending, and more spending when prices are already climbing makes inflation worse. So central banks are stuck. And that means borrowing costs stay elevated at the same time that input costs are rising.

  On top of that, conflict of this scale drives capital toward the US dollar as a safe haven. That strengthens the dollar and weakens every other currency. So if you run a European manufacturer or you export from India or Southeast Asia, your costs are rising in dollar terms while your revenue is shrinking when converted back. That is a double compression on margins.

  Now, who is most exposed?

  If your operations depend on Gulf infrastructure, you have an immediate problem. Dubai as a cargo hub, Gulf-based aviation, construction, hospitality, professional services, all of that is frozen, and there is no reopening date.

  Beyond the Gulf, the most vulnerable economies are net energy importers with no domestic cushion. Europe and Japan above all. If you run an energy-intensive business in those regions, chemicals, steel, glass, food processing, your cost base is about to shift.

  Not everyone loses.

  If you are an oil producer outside the conflict zone, in Norway, Brazil, Canada, or the United States, the product you sell just became dramatically more valuable. And if you operate a logistics hub in Singapore or Istanbul, you are about to absorb rerouted traffic from the Gulf.

  Here is the question that matters most right now. How long does this last.

  In 1979, the Iranian Revolution doubled oil prices and triggered a global recession that lasted years. The Iran-Iraq war lasted eight. Wars in this region, once they start, tend to last far longer than anyone initially expects. And this one, with regime change as its stated objective, has every characteristic of following that pattern.

  So the instinct will be to wait. To absorb the cost increases, hold off on decisions, and hope the situation resolves quickly. But every week of absorbing higher input costs without acting erodes margin. So the businesses that come through this in the best shape will be the ones that plan now as if the disruption is structural. Because if it turns out to be shorter, you adjust easily. But if you assumed short and it lasts, the damage compounds.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

In this episode: US and Israel Strike Iran. With Glenshore's Managing Director Amine Laouedj.

Date of production: 2 March 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organisation mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

Kazuo Inamori and Japan Airlines Turnaround: A Masterclass in Legacy-Led Management

Kazuo Inamori (1932–2022), former Chairman of Japan Airlines, and founder of Kyocera and KDDI

In January 2010, Japan Airlines filed for bankruptcy. It was the largest non-financial corporate failure in Japanese history since the end of the Second World War, carrying ¥2.3T ($25B) in liabilities.

The stakes were national. JAL operated Japan's flagship international routes, employed over 47,000 people, and had already been bailed out by the government three times in the preceding decade. A failed restructuring would have been a national embarrassment. The Japanese government asked a 77-year-old retired industrialist, with no experience in airlines, to take the helm: Kazuo Inamori.

Inamori had built two Fortune Global 500 companies from nothing: Kyocera Corporation, a global leader in advanced ceramics, and KDDI, Japan's second-largest telecommunications carrier. Interestingly, he was also an ordained Zen Buddhist priest.

Within less than three years, JAL became the most profitable airline in the world, posting a record operating profit of ¥188.4B ($2.35B), and relisted on the Tokyo Stock Exchange in the second-largest IPO globally that year, just after Facebook, for $8.5B. The speed and scale of the turnaround remain virtually without precedent.

How did Inamori's intervention succeed where conventional restructuring had repeatedly failed?

A business leadership story about the power of placing meaning at the center of how a business is run.

Listen to a discussion inspired by this article:

The Business Leader

Kazuo Inamori was born in the 1930s in Japan and studied applied chemistry before taking a research position at Shofu Industries, a ceramics manufacturer in Kyoto. Frustrated with the company's rigid hierarchy and indifference to his research's commercial potential, he and seven colleagues left to start their own company.

In 1959, Inamori founded Kyoto Ceramic Co, later renamed Kyocera Corporation, with ¥3M (roughly $8,000 at the prevailing exchange rate) in capital from acquaintances. The company manufactured precision ceramic components used inside television picture tubes, and as color television proliferated across Japan in the 1960s, demand surged. Kyocera expanded into semiconductors, solar cells, and electronics, growing into a multinational with over 77,000 employees and annual revenues exceeding $13B. It has never recorded an annual loss.

In 1984, when Japan deregulated its telecommunications industry, Inamori founded DDI Corporation to challenge NTT, the state telecoms monopoly. DDI merged with KDD (Kokusai Denshin Denwa, Japan's international telecom carrier) and IDO (Nippon Idou Tsushin, a mobile operator) in 2000 to form KDDI, which became Japan's second-largest telecom operator.

Early on, way before success, Inamori developed a distinctive management philosophy. When Kyocera had fewer than 100 employees, he wrote the company's Management Rationale, the foundational document governing the company's operations. It stated its purpose as follows: "To provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind."

From this philosophy emerged the Amoeba Management System, which Inamori began developing in the mid-1960s as Kyocera outgrew his ability to oversee every operation personally. The system divides an entire organization into the smallest possible autonomous units, an "amoeba." Each functions as an independent profit-and-loss center, setting monthly revenue and cost targets, tracking performance daily using a metric called "Hourly Efficiency" (added value divided by total labor hours), and transacting with other amoebas at internally negotiated prices pegged to external market rates. Every unit understands its own economics and has the autonomy to act. The core principle was that every individual must think and act as if they were the owner of their own small business: every employee is a manager, every department is a business, every decision has a visible financial consequence. The whole organization becomes self-correcting.

This combination of moral philosophy and forensic financial accountability was the essence of Inamori's management system. It was taught at the Seiwajyuku academy he founded in 1983, and adopted by over 400 companies worldwide, across manufacturing, healthcare, and services sectors from China to the United States.

In 1997, Inamori retired from active management at Kyocera, taking the title of honorary chairman, and was also ordained as a Zen Buddhist priest.

The Company

Japan Airlines was founded in 1951 as a government initiative to rebuild Japan's air transport system after the Second World War. It became the state-owned national carrier in 1953 and was privatized in 1987. At its peak, JAL operated Japan's flagship international routes, carried over 52 million passengers annually.

By the 2000s, JAL had accumulated structural weaknesses across every layer of the business: an oversized fleet of fuel-inefficient Boeing 747s maintained as competitors shifted to smaller aircraft, politically mandated loss-making regional routes, an expensive senior workforce hired during the 1970s boom, and a diversification into hotels, golf courses, and real estate that collapsed with Japan's asset bubble in the late 1980s. The 2008 financial crisis pushed it past the point of no return.

In January 2010, JAL filed for bankruptcy under Japan's Corporate Rehabilitation Law, still employing over 47,000 people. It was the largest non-financial corporate failure in Japanese postwar history. The airline owed ¥2.3T ($25B) in total liabilities against assets worth roughly ¥1.5T ($17B), leaving a shortfall of over ¥800B ($9B). The government directed the Enterprise Turnaround Initiative Corporation of Japan (ETIC), a state-backed restructuring body, to manage the process as court-appointed trustee. ETIC imposed severe preconditions: elimination of one-third of the workforce (reducing headcount to approximately 32,000), salary cuts of up to 30%, retirement of inefficient aircraft, and withdrawal from underperforming routes. Creditors agreed to forgive ¥521.5B ($6B) in debt, absorbing a significant portion of the shortfall. JAL's shares were delisted from the Tokyo Stock Exchange in February 2010, and then ETIC injected ¥350B ($4B) in fresh public capital to fund the restructured airline.

The Decision

ETIC's leadership, particularly its former chairman Hideo Seto, understood that the airline's problems were embedded in a corporate culture that had operated for decades as a semi-governmental bureaucracy. The government needed someone who could change not just the numbers, but the people behind them.

Seto and the government turned to Inamori, who was 77 and had been retired for over a decade. Those around him advised strongly against it, and he resisted multiple requests. He eventually agreed, motivated by three considerations he later explained publicly: preventing the economic damage a second JAL bankruptcy would inflict on Japan, protecting the livelihoods of the remaining employees, and preserving competitive balance in Japanese aviation so that consumers would not be left with a single dominant carrier. He accepted the chairmanship and declined any salary, as a signal to a workforce that had just lost a third of its colleagues. Inamori wanted every remaining employee to understand that he had no financial interest in the outcome, only a sense of responsibility.

The Intervention

His first priority was to establish a shared philosophical foundation. He adapted the Kyocera Philosophy into what became the JAL Philosophy, a set of principles governing employee conduct centered on the primacy of employee wellbeing and the moral obligation to serve customers and society. Senior executives were gathered in what Inamori termed a "dojo," a training hall, and subjected to intensive seminars. The response was initially skeptical. One executive publicly argued with Inamori about whether an airline's purpose was to turn a profit or merely provide a public service. Others could not believe that a man of his wealth and age would devote time to such granular, almost pastoral work. Yet the granularity was the point. Inamori spent time on hangar floors and behind ticket counters, repeating his message directly to frontline staff.

Simultaneously, he transplanted the Amoeba Management System into the airline. JAL's bureaucracy was disaggregated into small, self-governing units. For the first time in JAL's history, profitability data for individual routes and individual flights became available the following day. Inamori scrutinized departmental figures personally every month. If a unit showed no improvement, he demanded to know why.

The effect was transformative. Under the old regime, no executive had material interest in management figures. Aircraft deployment decisions were made centrally, often resulting in 200-seat planes flying routes with 20 passengers. Under the Amoeba system, unit leaders could scale down to smaller planes with a single phone call, because they now understood the cost of every empty seat and had the authority to act. Hierarchy was dismantled. Monthly meetings required each unit to present its figures and explain variances. There was no more hiding poor performance within a rigid reporting chain.

The Outcome

The measurable results were extraordinary. JAL's operating performance swung from a loss of ¥133.7B ($1.5B) in fiscal year 2009 to a record operating profit of ¥188.4B ($2.35B) in fiscal year 2011, a turnaround exceeding ¥320B ($4B) in two years. Net profit reached ¥187B ($2.3B), more than 6x that of rival All Nippon Airways (ANA) at ¥28B ($350M). ETIC's original recovery plan had targeted ¥60B ($750M) in operating profit. JAL delivered more than three times that figure. On 19 September 2012, two years and eight months after filing for bankruptcy, JAL relisted on the Tokyo Stock Exchange. The ¥663B ($8.5B) offering was the second-largest IPO globally that year, behind only Facebook. ETIC, which had held approximately 96% of JAL's equity, divested its entire stake, fully recouping the ¥350B ($4B) in public funds it had invested.

JAL's recovered profitability was not produced solely by Inamori's cultural transformation. The bankruptcy process itself had given the airline structural advantages its competitors did not enjoy: over ¥500B ($6B) in debt forgiven by creditors, lower depreciation charges from asset write-downs, and tax credits from accumulated losses that sheltered profits for years. The Liberal Democratic Party publicly opposed the relisting, and rival ANA argued that JAL had gained an unfair competitive advantage through its government bailout. These criticisms were not trivial: the financial restructuring created conditions that would have improved any airline's reported earnings, regardless of who was running it.

But what the financial restructuring could not explain was the scale of the outperformance. ETIC's own recovery plan, which already assumed the benefits of debt forgiveness and asset write-downs, had projected ¥60B ($750M) in operating profit. JAL delivered ¥188B ($2.35B). The gap between what the restructuring alone should have produced and what JAL actually achieved is the measure of what Inamori's intervention added.

Inamori stepped down as chairman in February 2012.

Reflections for Business Leaders

JAL before Inamori was an organization that possessed the information it needed to save itself. Route-level cost data existed. Operational inefficiencies were visible to anyone who looked. But it could not act on it. The problem was the absence of any mechanism to connect that information to individual behavior. In their 1990 paper in Administrative Science Quarterly, organizational theorists Wesley Cohen and Daniel Levinthal called this condition a failure of "absorptive capacity": the inability of an institution to recognize the value of information it already holds and apply it to commercial ends. Their research focused on R&D-intensive firms, but the mechanism is the same. An organization that has spent decades insulated from market consequences can lose the internal wiring needed to process signals that would be obvious to an outsider.

Inamori restored that capacity through two simultaneous mechanisms. The first was philosophical: by redefining JAL's purpose around employee wellbeing and societal service, he gave individuals a reason to care about outcomes they had previously ignored. A pilot or gate agent who sees themselves as serving a meaningful mission engages differently from one who sees themselves as a cog in a bureaucracy. The second was structural: the Amoeba Management System made the financial consequences of every decision visible, immediate, and personal. Each mechanism depended on the other: purpose without financial transparency produces enthusiasm without results; transparency without purpose produces local optimization and gaming. The results were not a happy accident of idealism. They were the measurable consequence of a management model that most boardrooms would have dismissed before it had a chance to prove itself.

The broader lesson extends well beyond distressed situations. Any business leader building an organization intended to outlast their own involvement faces the same question Inamori answered at JAL: how do you create a system where performance is generated by the people inside it, not imposed on them from above? Inamori's answer was to pair radical financial transparency with a shared sense of genuine purpose.

Kazuo Inamori died in 2022 in Kyoto, at the age of 90. He founded two Fortune Global 500 companies from scratch, and achieved a corporate turnaround unique in its speed and scale, saving an airline, 32,000 jobs, and $4B in public funds. The essential question his life's work poses to every business leader is deceptively simple: do your people know, every day, what their work costs and what it earns, and do they have a reason to care?

—

Amine Laouedj Managing Director, Glenshore

I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.

Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.

---

Disclaimer: The analysis contained herein reflects publicly available information as of February 2026. All data points are sourced from official Kyocera and JAL corporate disclosures, ETIC restructuring records, Tokyo Stock Exchange filings, and referenced third-party research including Cohen and Levinthal (1990). No proprietary or non-public information has been used.

US Supreme Court Strikes Down Trump Tariffs

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• Transcript

  [PART 1]

  Since early 2025, the Trump administration had imposed tariffs on imports from nearly every country in the world. The legal basis was a 1977 law called IEEPA, the International Emergency Economic Powers Act, which allows the US president to regulate commerce during a declared national emergency. Under this authority, the administration applied different tariff rates to different countries. Chinese goods carried effective rates above 30%. Canadian and Mexican goods that did not qualify for duty-free treatment under the North American trade agreement paid 25% or more. The EU negotiated a cap at 15%. More than a dozen other countries signed individual trade deals setting their own specific rates and exemptions. By January 2026, IEEPA tariffs accounted for roughly half of all US customs revenue.

  On Friday 20 February, the US Supreme Court ruled 6 to 3 that IEEPA does not give the president the authority to impose tariffs. The power to tax imports, the Court held, belongs to Congress. The ruling invalidated the entire IEEPA tariff structure in a single decision.

  Within hours, President Trump signed a proclamation imposing a new 10% global tariff under a different law, Section 122 of the Trade Act of 1974. This law has never been used before. It allows the president to impose tariffs to address balance-of-payments problems, but it is capped at 15% and expires after 150 days, on 24 July 2026, unless Congress votes to extend it. On Saturday 21 February, Trump announced his intention to raise the rate to 15%.

  [PART 2]

  So what does this mean for business?

  For most importers, the immediate effect is lower costs, which is obviously positive. But the ruling creates a much larger problem underneath. The cost of the uncertainty this ruling creates outweighs the benefit of the rate reduction.

  Start from who gains right now.

  If you import from China into the United States, you were paying above 30%. You now pay 10%. That is a direct reduction in the cost of every container you bring in. It means you can either widen your margins or lower your prices to take market share. The same applies if you source from Canada or Mexico outside the duty-free categories, where rates dropped from 25% to 10%.

  Now, who loses.

  If you are a US manufacturer who competed against Chinese imports, the tariff that kept your pricing competitive just dropped from above 30% to 10%. Your foreign competitor's landed cost fell dramatically. And they can ramp volume at the new rate faster than you can cut your own production costs.

  If you spent the past year restructuring your supply chain around the old IEEPA rates, those investments are stranded. Moving a supplier from China to Vietnam because Vietnam had a lower IEEPA rate made sense under the old architecture. It no longer does, because the rate is now flat. The factories you onboarded, the contracts you signed, the compliance infrastructure you built, all of it was calibrated to a system that no longer exists. That cost does not come back when the tariff changes. It sits on your books.

  And there is a problem that goes beyond importers and domestic producers.

  Under IEEPA, the administration negotiated more than a dozen trade deals with specific countries. Those deals set individual rates, product exemptions, and caps tailored to each trading relationship. The new Section 122 tariff ignores all of them. It is one flat rate applied to everyone. So if you are an EU exporter who relied on specific product exemptions negotiated in the EU-US framework, those exemptions no longer apply. The EU has already paused ratification of the deal. India has paused its own.

  On top of that, roughly $175 billion in IEEPA tariffs were collected over the past year. The Court's ruling means they were collected without legal authority. If you paid those tariffs, you may be entitled to a refund. Over a thousand businesses had already filed claims before the ruling. But the administration has signalled it will resist, and the refund process has not been defined.

  Now here is the question that matters most.

  Section 122 expires on 24 July 2026. The administration has said it will open investigations under Section 301, a US trade law that allows tariffs in response to unfair foreign trade practices. But that process requires formal proceedings, consultations, and public comment periods. It takes months. So the current 10% rate has a legal shelf life of 150 days, and its replacement does not yet exist.

  Here is what to take away.

  In the past twelve months, the US tariff system has been fundamentally rewritten three times. Each time, companies treated the new rates as stable and rebuilt around them. Each time, the structure was replaced. Tariff policy in the United States is no longer a fixed input in your cost model. It is a volatile one. And you manage volatile inputs differently. Concretely, that means maintaining active supplier relationships in more than one jurisdiction so you can shift volume without months of onboarding. It means keeping contracts shorter with flexibility clauses rather than locking in terms built around a single rate. And it means pricing your products with enough margin to absorb tariff movement rather than passing through every shift to your customers. The companies that will manage this period best are the ones that treat tariff exposure the way they already treat currency exposure: as a risk to be managed continuously, not a number to be optimized once.

Once a week, one noteworthy global event, the mechanisms behind it, and what it changes for your company.

In this episode: US Supreme Court Strikes Down Trump Tariffs. With Glenshore's Managing Director Amine Laouedj.

Date of production: 23 February 2026

The views expressed in this episode are those of Glenshore and are provided for informational and educational purposes only. They do not constitute investment advice, financial advice, or a recommendation to take any particular action. This material may contain forward-looking statements. Past performance is not indicative of future results. Glenshore makes no representations or warranties, express or implied, as to the accuracy or completeness of the information provided and disclaims any liability for reliance on such information for any purpose. Each name of a third-party organisation mentioned is the property of the company to which it relates and is used strictly for informational and identification purposes only. This material should not be copied, distributed, published, or reproduced in whole or in part without the express written consent of Glenshore.

© 2026 Glenshore Limited. All Rights Reserved.

The €8 Billion Bet. When Swisscom Went All-In on Italy's Most Brutal Market Through the Acquisition of Vodafone Italia

Swisscom CEO Christoph Aeschlimann and Vodafone Group Margherita Della Valle

In December 2024, the Swiss telecommunications incumbent Swisscom completed its acquisition of 100% of Vodafone Italia for €8 billion, and merged it with its local subsidiary Fastweb. This deal created Italy's largest mobile operator by subscriber count and its second-largest fixed-line provider.

Fastweb held strong fixed-line fiber assets but operated as a junior mobile player on borrowed network capacity. Vodafone Italia commanded 20 million mobile customers and Italy's most awarded mobile network, yet was hemorrhaging value in a brutal price war. The strategic rationale was clear: fixed plus mobile equals convergence, convergence equals reduced churn, reduced churn equals margin expansion. But the execution risks remain equally real: in 2016, the Wind-Tre merger offered a similarly coherent thesis and projected significant synergies, yet failed in this exact market

Can this deal, which makes strong sense by the standard M&A playbook, survive contact with operational reality?

Listen to a discussion inspired by this article:

The Context

Italy's telecommunications market, the eurozone's third-largest by revenue at approximately €25 billion, was served until late 2024 by the same core group of operators across both mobile and fixed-line segments, though in different proportions. On the mobile side five operators competed: WindTre at 24.0%, TIM at 23.5%, Vodafone Italia at 21.0%, Iliad at 14.6%, and Fastweb at 4.7%. Four of these held near-equal positions between 14% and 24%; Fastweb was a marginal fifth player (AGCOM data, Q3 2024, measured by "human SIM" market share). On the fixed-line side, four operators competed (Iliad had virtually no fixed-line presence): TIM dominated at roughly 40%, followed by Vodafone at 15.6%, WindTre at 14.3%, and Fastweb at 13.1%.

Fastweb, Swisscom's Italian subsidiary since 2007, operated the country's second-largest fixed-line fiber network but its 3.4 million mobile subscribers relied on third-party MVNO arrangements. Vodafone Italia ran Italy's most awarded mobile network (Opensignal, November 2024) with 20 million customers, but had no owned fixed-line infrastructure. Vodafone Group was reshaping its European portfolio, having also sold Spain to Zegona for €5 billion, to concentrate on stronger markets.

This market structure creates two interrelated problems.

The first is a pricing death spiral. In microeconomics and game theory, an oligopoly with near-equal players creates defection incentives: each player's most rational move (cut prices to capture share) triggers retaliation, collapsing everyone's margins. Without consolidation (or an illegal cartel), the cycle has no stopping point unless one player becomes large or differentiated enough to anchor pricing. Deutsche Telekom (over 40% in Germany) and Orange (France) play that role. Italy never developed such an anchor: its top four mobile operators held between 14% and 24% each. The result was sustained erosion of ARPU (Average Revenue Per User), the most watched profitability metric in telecommunications.

The second is a convergence gap. Convergence means a single operator delivering both fixed-line and mobile services through owned infrastructure, as an integrated product. Bundled customers are stickier (switching means changing everything) and generate higher ARPU. In Germany and France, incumbents offer this. Italy had no operator capable of it at scale: an SME needing broadband, employee mobile, and IoT under one contract had to manage multiple providers. TIM came closest but carried €26.6 billion in net debt (pre-NetCo sale). WindTre had a limited fixed-line footprint. Iliad had virtually none.

These two problems are connected. The pricing death spiral persists partly because no operator can escape price-based competition by offering something structurally different. Convergence would provide that escape route.

The Deal

This deal did not promise to fix Italy's structural fragmentation. The combined entity at 26.1% mobile share is the largest by subscribers but not by the margin that anchors pricing discipline (Deutsche Telekom holds north of 40%). The core promise is asset complementarity: creating the first Italian operator capable of selling a genuine fixed-mobile bundle at national scale, from owned infrastructure on both sides, giving one player a way to compete on value rather than price alone. Convergence does not end the price war; it gives one player a way to partially step outside it.

The transaction was a 100% cash acquisition for €8 billion. Vodafone Italia reported €4.2 billion in service revenue and roughly €1.05 billion in Adjusted EBITDAaL for FY2024 (ending March 2024), implying a 7.6x LTM EV/EBITDA and sitting at the upper end of the 5-7x range typical for mature European telecom operators, reflecting the convergence premium. Financing was entirely new debt, doubling Swisscom's net debt and pushing leverage from 1.5x to 2.6x Net Debt/EBITDA (FYE 2025). Also, a separate brand license permits continued use of the Vodafone brand in Italy for up to five years, alongside Fastweb.

Christoph Aeschlimann, Swisscom’s CEO since June 2022, leads the combined group from Bern, while Walter Renna was appointed CEO of the Italian entity, Fastweb + Vodafone. Swisscom’s credibility rests on its nearly two-decade track record in Italy: since acquiring Fastweb in 2007, it has grown the subsidiary’s customers, revenues, and EBITDA by over 50%. Margherita Della Valle, Vodafone Group CEO, accepted Swisscom's €8 billion offer, well below Iliad's €11.25 billion bid for the unit in 2022. Two years of continued value erosion likely explained the discount, but it was a clean break from a market Vodafone could no longer afford to stay in.

The Case For

The commercial case rests on convergence as a competitive weapon. The combined entity is the first Italian operator capable of offering an integrated fixed-mobile bundle at national scale, targeting customers (especially enterprise) who value integrated service over the cheapest SIM. For an Italian SME, this means broadband, employee mobile plans, and IoT connectivity under a single contract and a single bill, something no other operator could offer from owned infrastructure. Simultaneously, cost synergies from merging two networks lower the cost base. A more defensible revenue stream from bundling, combined with lower costs from consolidation, produces an operator that can sustain investment in a market that punishes sub-scale, single-product players. That is the bet.

Swisscom projects €600 million in annual run-rate synergies, primarily from migrating Fastweb's mobile customers onto Vodafone's owned network (eliminating MVNO costs), consolidating procurement, and removing overhead, at an upfront cost of up to €200 million. The target is weighted toward cost reduction, the category empirical research identifies as more reliably achievable.

The Case Against

Merging two telecom operators requires unifying spectrum portfolios, radio access networks, billing platforms, customer databases, and retail channels. The specific vulnerability: Fastweb's 3.4 million mobile customers must migrate from third-party MVNO arrangements onto Vodafone's owned network, involving SIM reprovisioning, number portability, and meaningful attrition risk.

The most cautionary precedent sits in this same market. In 2016, 3 Italia and Wind Telecomunicazioni merged to form WindTre with projected €700 million in synergies. Then Iliad entered Italy in 2018 (acquiring spectrum the Commission required WindTre to divest) and launched aggressive price competition. A €6.6 billion 5G auction drained balance sheets. WindTre shed customers steadily. A 2023 Light Reading analysis described it as a merger that "went rotten." Fastweb + Vodafone has converged assets WindTre never possessed, but the precedent calibrates expectations.

The leverage position adds a specific constraint. Swisscom is a 51% state-owned company that chose to finance this acquisition entirely through debt, roughly doubling its net debt in a market with a track record of destroying operator value. At 2.6x Net Debt/EBITDA, the balance sheet is manageable but leaves limited margin. If synergy realization is delayed or integration disruptions cause customer defection, the deleveraging path narrows and Swisscom's dividend commitment could come under pressure.

The competitive response is predictable. Iliad, which twice sought to acquire Vodafone Italia (2022 and 2023), is the most directly threatened. A converged rival undermines its core strategy of attracting mobile-only customers on price. The likely response, more aggressive pricing or a push into fixed-line, could intensify the very price war the convergence thesis is designed to escape.

Politically, Swisscom's 51% Swiss government ownership creates an expectation that its mandate is domestic infrastructure. The Swiss People's Party opposed the deal, and 67% of voters opposed full privatization in a July 2024 poll. If integration struggles, political pressure to redirect capital to Swiss operations could constrain management at the worst moment.

Reflections for Business Leaders

For us at Glenshore, three dimensions that standard M&A playbook deal assessment tends to underweight will likely determine whether this transaction succeeds or fails.

The first concerns strategy versus anthropology. Telecom organizations develop deeply embedded cultures around network operations, field engineering, and customer service: ritualized daily practices, not abstract "cultural differences." Fastweb was a challenger (agile, fiber-focused), Vodafone Italia a conglomerate division (process-heavy, brand-conscious). Integration forces a choice about which tribe's rituals prevail and generates resentment in the tribe whose rituals are retired. The five-year Vodafone brand license buys time, but operating under multiple identities for half a decade creates ambiguity that compounds in both customer-facing interactions and internal decision-making.

The second distinguishes between what mergers reliably deliver and what they rarely achieve. Tangible asset synergies (network rationalization, procurement, overhead) are engineering problems with quantifiable solutions. Intangible capability transfer (a differentiated product, retaining Vodafone's engineering talent, preserving Fastweb's speed) determines whether a deal creates lasting advantage or temporary savings. Wind-Tre is instructive: cost synergies were partially captured, but brand trust and customer loyalty degraded faster than the cost base shrank. The question for Fastweb + Vodafone is whether the combined entity can build a converged product experience that customers recognize as genuinely different, not just two companies sharing a back office. The synergies most worth pursuing are the ones least amenable to a spreadsheet.

The third concerns timeframe and accountability. The appropriate evaluation window is 2028. The ultimate measure is not deleveraging or dividend targets but whether the acquisition strengthened the competitive position of both Swisscom and the Italian market, whether consumers gained better services, and whether the combined workforce emerged with a coherent identity. The acquirer inherits not just assets but obligations: to customers, employees, and a market whose health depends on the combined entity's conduct.

Swisscom's nearly two-decade track record at Fastweb provides reason for cautious optimism. The industrial logic is sound, the financing disciplined, the regulatory path cleared. The convergence bet has a strong foundation, but the real test remains in addressing the cultural differences between the two very different organizations, realizing intangible synergies beyond the spreadsheet, and meeting long-term obligations to customers and the market. That will determine whether Fastweb + Vodafone becomes the converged challenger its architects envisioned, and whether rivals like Iliad and WindTre are forced to converge… or concede.

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Amine Laouedj Managing Director, Glenshore

I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.

Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.

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Disclaimer: The analysis contained herein reflects publicly available information as of February 2026. All data points are sourced from official Swisscom disclosures, AGCOM regulatory filings, Vodafone Group announcements, and referenced third-party research. No proprietary or non-public information has been used.