Good Thursday morning.
The huge ‘ifs’ about Google in China
Yesterday, the Intercept reported that Google was planning a new search tool there. The Information quickly followed with reports of a news-aggregation app.But people with knowledge of Google’s work warned Li Yuan and Daisuke Wakabayashi of the NYT that it’s far from a done deal. The company often tests services that it never offers publicly. And talks with the Chinese government, one added, weren’t going well.
The political case for it happening:
It would let the Chinese government give President Trump a political victory on tech, perhaps helping trade negotiations.
The political case against: Human rights activists and some Google employees are already objecting. And more powerful voices could join them, notes Pete Sweeney of Breakingviews: “Google’s putative move would test the tolerance of U.S. legislators, who fret companies are handing over competitive secrets in exchange for market access.”
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Jamie Condliffe and Amie Tsang in London.
Senators Mark Warner and Richard Burr at a Senate Intelligence Committee hearing. Erin Schaff for The New York Times
Fixing election meddling won’t be easy
Facebook disclosed details of more suspicious activity on Tuesday, potentially aimed at the midterm election. It looks like what the Russians did in 2016, says Kevin Roose of the NYT, but significantly smarter: “a maturing adversary, adapting and evolving to better disguise itself, while also better imitating real activists.” Facebook may be moving faster this time, but it has a fight on its hands.
Meanwhile, in the Senate:
At the Intelligence Committee hearing into foreign influence campaigns yesterday, lawmakers and independent analysts agreed that the nation hasn’t done enough to protect itself. But, as Axios points out, they really don’t agree on what to do about it.
The new deal breaker: a ‘Weinstein clause’
Companies hoping to sell are increasingly asked to vouch for the behavior of their executives, Bloomberg’s Nabila Ahmed reports.In the wake of #MeToo, advisers are adding clauses to merger agreements that protect buyers if inappropriate behavior is revealed later. Sometimes, the buyer might even have the right to claw money back, with sellers having to put as much as 10 percent of what they receive in escrow just in case.An example from this week: Brookfield’s agreement to buy Forest City Realty Trust stated that no allegations of sexual harassment had been made against any employees at senior vice president level or above in the last five years.Senator John Cornyn sponsored a bill to give the United States more power to investigate — and potentially block — foreign transactions. Al Drago/Getty Images
America’s foreign investment clampdown
The Committee on Foreign Investment in the United States is getting more power. Legislation expanding its remit passed the Senate 87-10 on Wednesday, and it’s not the kind of idea President Trump would veto.Currently Cfius can only block mergers and acquisitions. Alexandra Yoon-Hendricks of the NYT explains how that will change:Under the bill, joint ventures, minority stakes, and real estate transactions near military bases or other sensitive national security facilities all could be investigated — and potentially squashed — by Cfius. Cfius will also be able to expand the kinds of risks it can consider — not just national security but also the United States’ competitive edge in emerging industries.The committee will review transactions from dozens of other countries deemed to be of “special concern” — but China’s likely to be the biggest target.
Carl Icahn takes on Cigna
Mr. Icahn thinks Cigna’s $54 billion bid for the pharmacy benefit manager Express Scripts is too expensive. He’s also concerned about Amazon’s growing clout in the industry, and the risk of the Trump administration’s plans to lower drug prices.And that matters, because he has amassed “a sizable stake” in Cigna, anonymous sources told the WSJ. Here are Cara Lombardo and Dana Mattioli on how it might play out:An influential activist like Mr. Icahn coming out against the deal could galvanize the opposition and increase the risk it will fall through. However, only Cigna shares accumulated by July 10 can be voted for or against the deal, meaning Mr. Icahn won’t be able to convince other hedge funds to jump in and oppose it.
Revolving doorAlex Stamos, Facebook’s departing chief security officer, will join Stanford University as an adjunct professor. (NYT)
Anand Chandrasekher, a former Intel and Qualcomm executive, and Cristiano Amon, the current Qualcomm president, have reportedly joined the list of potentials to become Intel’s next C.E.O. (Information)
Adam Tan, the chief executive of HNA Group, is now also its chairman. (Reuters)