🚗Toyota is coming out of hibernation

Good afternoon! Today we will be covering how Toyota is coming out of hibernation, Europe’s Green Dilemma and a $2.9 billion acquisition in healthcare.

Reading time: 2.5 Min

STOCK MARKET
🚗Toyota is coming out of hibernation

Toyota Motor, Japan's leading automaker, reported a robust third-quarter operating profit of ¥1.68 trillion ($11.3 billion), surpassing estimates and prompting a 4.8% surge in its shares, marking the biggest one-day gain in nearly eight months.

The stellar performance was attributed to a weaker yen, strong sales of high-margin cars, and soaring demand for hybrid vehicles, which saw a 46% increase. Toyota, a pioneer in hybrid technology, stands out among competitors struggling with tepid electric vehicle sales.

The company raised its full-year operating profit forecast by almost 9% to ¥4.9 trillion ($33 billion). Despite facing challenges in the U.S., China, and Southeast Asia, Toyota's solid financials, a 14% operating profit margin, and strong performance in its home market contribute to its leadership position globally, with record annual sales of 11.2 million vehicles in 2023.

However, the automaker lowered its annual vehicle sales target to 9.45 million units due to a safety certification scandal affecting its subsidiary Daihatsu Motor.

EUROPE
♻Europe’s Green Dilemma

Europe's green energy transition faces a dilemma as a surge in cheap Chinese solar panel imports fuels record solar installations but jeopardizes local manufacturers.

While the European Union experienced a banner year for green energy with a 40% increase in solar capacity installations, the majority relied on Chinese imports, causing distress for the few remaining local solar panel manufacturers.

The sector warns that half of its capacity could shut down within weeks without government intervention. Policymakers are divided, with Germany opposing potential trade restrictions on Chinese imports, fearing negative impacts on green energy expansion and market prices.

Spain and the Netherlands consider tariffs and border taxes, respectively, while Italy invests in a domestic PV panel factory. The industry suggests government purchase of excess inventories or trade barriers, but opposition comes from the broader green energy sector concerned about project delays and rising costs.

M&A
Novartis to acquire MorphoSys for $2.9 billion

Swiss drugmaker Novartis AG is set to acquire German biotech firm MorphoSys AG for €2.7 billion ($2.9 billion), focusing on a rare bone-marrow cancer treatment candidate. Novartis will pay €68.00 per share in cash, taking

MorphoSys private after certain conditions are met, including regulatory clearances and a minimum acceptance threshold of 65% of MorphoSys' share capital. The acquisition grants Novartis ownership of pelabresib, a promising drug developed by MorphoSys, which targets deadly cancers such as myelofibrosis and certain lymphomas.

MorphoSys plans to file a U.S. approval application for pelabresib in combination with ruxolitinib in the second half of 2024. The deal is expected to conclude in the first half of 2024.

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