DealBook Briefing: Ken Chenault Wants Silicon Valley to Grow Up

DealBook Briefing: Ken Chenault Wants Silicon Valley to Grow Up

A reminder: Before Mr. Shafir, Mr. Och’s chosen successor was James Levin. Then the two men had a falling out.

Mr. Och’s statement:

“Rob is a world-class executive who will be a great asset to Oz as we continue our evolution as a firm. His distinguished career of over 30 years leading global financial institutions and asset management businesses brings unique experience that will benefit Oz significantly.”

And a statement by Mr. Levin, who had weighed quitting — but was identified in today’s statement as still being Och-Ziff’s co-chief investment officer:

“Oz is a tremendous firm with a talented and creative team that works each day to identify and execute on the most compelling investment opportunities around the world. I am excited about the future and look forward to welcoming Rob.”

— Michael J. de la Merced


Reuters/Mike Blake

Who will succeed Jamie Dimon?

The JPMorgan Chase chief said yesterday that he plans to stick around another five years. So who will eventually pick up the baton?

In the short term: It could be Daniel Pinto, the head of JPMorgan’s investment bank, or Gordon Smith, the head of its consumer bank. They were named co-presidents yesterday — but Mr. Pinto is 55 and Mr. Smith is 59.

In the longer term: It could be one of the other executives named in the firm’s statement:

Mary Erdoes, 50, who runs the asset and wealth management arm

Doug Petno, 52, who runs the commercial banking division

Marianne Lake, 48, the C.F.O.

“The board and Dimon both believe that under all timing scenarios, whether today or in the future, the company has several highly capable successors in place,” JPMorgan said in its statement. But the firm has had trouble holding onto potential successors over the years.

The political question: Mr. Dimon has said publicly that he isn’t going to run for president. (There’s been speculation, and friends are still encouraging him to try.)

Critics’ corner

• Antony Currie writes, “JPMorgan has given Jamie Dimon the freedom to outstay his welcome.” (Breakingviews)

• Lex writes, “As murky as the future is, the situation at JPMorgan is probably preferable to Goldman, where there is a ferocious thinly-disguised competition between the two co-presidents for the top job.” (FT)


Eric Thayer for The New York Times

What will Trump talk about in his first State of the Union?

Surely jobs and the economy, given how often he has spoken on those topics (including at the World Economic Forum in Davos). Politico also suggests infrastructure, immigration, trade and national security.

But here are the big questions:

• Will President Trump stick to the script and focus on issues like spending $1 trillion on infrastructure?

How hard will he press the White House immigration proposal? Democrats are opposed, and the next shutdown deadline is Feb. 8.

• Will he touch on health care, given that Republicans have so far rolled back only a small portion of the Affordable Care Act?

The Washington flyaround

• Republicans on the House Intelligence Committee voted to release a contentious memo alleging improprieties in the surveillance of a Trump campaign associate. The Justice Department had wanted it kept secret. (NYT)

• The Trump administration declined to issue new sanctions against Russia. (Axios)

• Congressional Republicans are hoping to tame President Trump’s stances on trade. (Politico)

• Businesses and investors are starting to focus on a little-noticed provision in the tax overhaul: “opportunity zones” to draw investment in economically disadvantaged areas. (NYT)

• The F.B.I.’s deputy director, Andrew McCabe, is stepping down after months of criticism by Mr. Trump. (NBC News)


Jacquelyn Martin/Associated Press

Don’t expect nationalized 5G

Both the F.C.C. and the telecom industry are against a plan created at the National Security Council and reported by Axios.

Here’s what Ajit Pai of the F.C.C. said:

“Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future.”

The White House itself backed away from the proposal and appears to prefer focusing on building secure networks using 5G tech.

What’s behind the controversy, from Cecilia Kang and Mark Landler of the NYT:

It lays bare the differences between two camps in the administration that have been present since Mr. Trump’s inauguration: economic nationalists and China hawks.

Among those officials aggressively pushing the 5G network are two China hard-liners: Gen. Robert S. Spalding II, the senior director for strategic planning at the National Security Council, and Peter Navarro, the director of the White House national trade council.

Elsewhere in tech

• Facebook will promote local news, Mark Zuckerberg says. And pediatric and mental health experts are asking him to discontinue a children’s messaging service.

• How committed is Kodak to virtual currency? (NYT)

• Microsoft issued an update to Intel’s update mitigating the Spectre security flaw. (CNBC)

• Strava users in the U.S. military have inadvertently disclosed their locations and habits, including in sensitive areas in Iraq and Syria. (NYT)


Manuel Balce Ceneta/Associated Press

Antonio Weiss is back in the deal business, thanks to Keurig

Listed in the phalanx of bankers and lawyers behind the $18.7 billion Dr Pepper Snapple deal is a name you might easily miss, “AFW LP.” It’s short for “Antonio Francesco Weiss,” the former Lazard banker and Treasury Department official — and an adviser to Keurig.

The recap

Mr. Weiss was one of Lazard’s biggest deal makers, eventually becoming the firm’s global head of investment banking. He worked on InBev’s takeover of Anheuser Busch and Reynolds American’s takeover of Lorillard. (He also sold D.E. Master Blenders to JAB, the investment firm that later bought Keurig.)

But Mr. Weiss left Lazard to become a counselor at the Treasury Department under the Obama administration, taking on issues like Puerto Rico’s debt crisis and new lending marketplaces.

Since then

He’s become a senior fellow at the Mossavar-Rahmani Center for Business and Government at Harvard’s Kennedy School, and a director at the Volcker Alliance.

He has considered getting back into investment banking, and has been courted by many a bank. And he might yet start his own shop.

Who’s afraid of an I.P.O.?

Companies want to go public. But recent news suggests that many want to avoid the initial public offering process.

• Exhibit A: Keurig’s $18.7 billion deal with Dr Pepper Snapple Group, which would let JAB take the coffee maker public.

• Exhibit B: Dell is contemplating a reverse merger with VMware, according to CNBC. (That’s one of several options, we’ve been told.)

• Exhibit C: Spotify.

Of course, there will still be I.P.O.s.: Uber, Dropbox and Airbnb are all working toward offerings. But if some companies can avoid the process, it appears they will.


Carlo Allegri/Reuters

The deals flyaround

• Blackstone is in advanced talks to buy about 55 percent of Thomson Reuters’ Financial and Risk business, valuing the unit at about $20 billion, including debt, according to unnamed sources. (Reuters, NYT)

• Qualcomm is under growing pressure to negotiate with NXP shareholders, who have become frustrated at its reluctance to discuss raising its bid. (Bloomberg)

• The Japanese chip maker Renesas Electronics is in talks to buy Maxim Integrated for close to $20 billion, according to unnamed sources. (CNBC)

• Polychain Capital, the hedge fund investing in blockchain assets that’s backed by Sequoia Capital and Andreessen Horowitz, talked to bankers about going public in Canada but decided against. (Bloomberg)

• SAP will buy Callidus Software for $2.4 billion, its biggest deal in more than three years. (Bloomberg)

• Dalian Wanda is getting a $5.4 billion investment in its property unit and has put two overseas property developments up for sale, according to unnamed sources. (Bloomberg)

• Elliott Management is in talks to take over Waterstones, the British book chain owned by the Russian billionaire Alexander Mamut since 2011. (Sky News)

Revolving door

Stephen Pitts, a senior financing banker at Deutsche Bank who is close to SoftBank, has left for Bank of America Merrill Lynch. (WSJ)

Tom Harty, Meredith’s chief operating officer, will take over as the C.E.O. of the combined Meredith and Time Inc. (WSJ)

Jim Rich will become the editor in chief of the N.Y. Daily News as Jim Kirk takes over the L.A. Times. (NYT)

• Wells Fargo named Michael DeVito as the permanent head of its mortgage division. (WSJ)

The speed read

• New Jersey’s newly elected governor, Philip D. Murphy, ordered his state to rejoin a regional carbon trading program. A growing number of Democratic state governors are considering taxing or pricing carbon dioxide emissions. (NYT)

• Britain would be worse off outside the European Union under every scenario modeled in a British government analysis. (Buzzfeed)

• Janet Yellen will preside over her final policymaking meeting today and tomorrow, in which the Fed is expected to leave its benchmark interest rate unchanged. (NYT)

• Discussions on revamping the North American Free Trade Agreement moved from stalemate to negotiation during the sixth round of talks, which concluded on Monday. (NYT)

• To get funds for new stadiums, the N.F.L. dangles the prospect of hosting the Super Bowl. But the windfall generated by the event could be overstated. (NYT)

• People are sharing their 401(k) balances on social media. (MarketWatch)

• HNA Group told creditors its ability to repay debt will face a potential shortfall of $2.4 billion in the first quarter, according to people with knowledge of the matter. (Bloomberg)

• Elon Musk’s tunneling start-up, Boring Company, has started selling a branded flamethrower. It had taken thousands of orders worth $5 million by Monday. (Bloomberg)

• Indecision at the highest levels of government about Saudi Aramco’s planned initial public offering is causing frustration among company executives and financial advisers. (FT)

• Exxon Mobil plans to spend $50 billion on expanding its U.S. business in the next five years, saying that the tax overhaul had “enhanced” its investments. (WSJ)

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