FirstFT: AstraZeneca drafts plan to spin off China unit through Hong Kong listing

Today’s scoop is on AstraZeneca, which has become the latest western multinational to consider significant restructuring to manage geopolitical risk from US-China tensions.

The Anglo-Swedish drugmaker began discussing the idea with bankers several months ago and is among a growing number of multinational companies now considering that option, according to three people familiar with the talks.

A separation might not ultimately take place, the same people cautioned. One of the people said listing the entity in Shanghai was also possible.

The discussion shows the significant restructuring that big corporations could be forced to undertake as they adapt to growing friction between China and the US and its allies.

Under the plans AstraZeneca, which is the UK’s largest company by market value, would carve off its operations in China into a separate legal entity but would retain control of the business.

Here’s what else I’m keeping tabs on:

  • Germany: Relations between Germany and China will also be in the spotlight today when chancellor Olaf Scholz hosts the country’s premier Li Qiang. Here’s what to expect.

  • European air defence meeting: French president Emmanuel Macron will host EU defence ministers, US and Nato military officials and defence industry executives on the sidelines of the Paris Air Show, which starts today.

  • Juneteenth: US markets are closed for the federal holiday marking the emancipation of enslaved African Americans.

Five more top stories

1. Exclusive: deploys internal teams to trade tokens for profit, the latest sign of potential conflicts of interest in the digital assets industry. In most sectors, market making and proprietary trading are usually conducted by separate private companies, but the Singapore-based group, a top-10 crypto marketplace, operates both. Read the full story.

2. SVB Financial Group has reached a deal to sell its investment banking division to a group led by some of its own top bankers, including Jeffrey Leerink and hedge fund the Baupost Group. The unit, known as SVB Securities, was put up for sale following Silicon Valley Bank’s failure in March. Read more about the deal.

3. BlackRock and JPMorgan Chase are helping Ukraine set up a reconstruction bank to steer public seed capital into rebuilding projects that can attract hundreds of billions of dollars in private investment. The project remains in the planning stages and is not expected to launch fully until the end of hostilities with Russia.

4. Interview: US and European efforts to subsidise domestic renewable energy industries are tantamount to western “protectionism” and will hold back developing countries’ climate ambitions, India’s power minister told the Financial Times.

5. Pixar’s latest film Elemental posted the worst opening weekend results in the studio’s 28-year history. The gross takings of $30mn were below already-modest expectations and signal that the film may not recoup its estimated $200mn budget. Read more on Pixar’s latest disappointment and what it means for owner Disney.

The Big Read

Montage image showing Xi Jinping, an aircraft, a satellite
© FT Montage/Getty Images/Reuters/Bloomberg

Xi Jinping has swiftly advanced a new group of political leaders with a shared background: deep experience in China’s military-industrial complex. Their rise to the top echelons of power is part of the president’s efforts to reinvigorate the country’s long-running project of “military-civil fusion”, which seeks to harness new technologies from the private sector for the benefit of the country’s rapidly modernising military.

We’re also reading . . . 

  • Rana Foroohar: A speech by US trade representative Katherine Tai last week made clear the story being told around free trade in America is changing profoundly.

  • Cancer research: Increasing numbers of younger people in the developed world are being diagnosed with cancer and scientists are not sure why.

  • AI and recruitment: A new personal interview coach is part of a wave of chatbots powered by generative AI helping to rebalance the power dynamic towards applicants and away from recruiters. This is part of an FT series exploring AI’s impact on our working lives. Read more

Chart of the day

Assets invested in global exchange traded funds have hit a record of $10.32tn off the back of rallying stock markets and resilient inflows, exceeding a peak at the end of 2021 before Russia’s invasion of Ukraine and a global surge in inflation.

Take a break from the news

The best books of the year so far on the environment and business kick off a summer series of reviews by the FT’s writers and critics. The full list will appear here.

© Simon Pemberton

Additional contributions by Tee Zhuo and Benjamin Wilhelm