Google and Lufthansa: new strategic deals | Calamatta Cuschieri

The Dow Jones Industrial Average registered its fifth straight decline Monday, but stocks broadly managed to finish above session lows as gains in energy and technology shares helped to limit declines partly inspired by fears over trade tensions between the U.S. and China.

Markets remain fixated on the escalating trade spat between the U.S. and China. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports.

Google rebuilds its business in China

The Tech giant Google announced Monday it will invest more than half a billion dollars in China's second-largest e-commerce player, JD.com. Under the deal, JD said it "plans to make a selection of high-quality products available for sale through Google Shopping in multiple regions."

The partnership would open a channel for JD.com to sell to consumers outside China, especially at a time when trade tensions between Beijing and Washington are high.

The two companies also hope to combine Google's technology with JD.com's expertise in managing supply chains for products.

"This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world," JD's chief strategy officer, Jianwen Liao, said in a statement Monday. Like Alibaba, JD has already sought to expand its reach across Southeast Asia.

Google has struck other partnerships in an effort to compete with Amazon in e-commerce. Last year, it teamed up with Walmart to enable people to order the retail giant's products through Google Assistant.

The Chinese e-commerce company competes aggressively with Jack Ma's Alibaba in China's massive e-commerce market. Both companies have invested significantly in technology, retail and logistics to win over consumers.

In addition, JD.com have been testing out drone delivery services to reach China's rural consumers while keeping the logistics cost relatively low.

The e-commerce player also has the backing of another major Alibaba rival — Chinese tech giant Tencent, which is involved in business areas including social networks, digital payments and gaming. It also operates China’s largest social messaging platform, WeChat.

JD. Com’s partnership with Tencent allows the e-commerce company to sell directly to consumers through the WeChat app.

Google has recently been ramping up its investments in China and elsewhere in Asia. Earlier this year, it led a $120 million investment into Chinese sports streaming company Chushou and invested an undisclosed amount of money in Indonesian ride-hailing company Go Jek.

Norwegian shares up to 10% as Lufthansa shows takeover interest

Shares in Norwegian Air rose 10 per cent after the chief executive Spohr of rival Lufthansa said his company was interested in buying the Scandinavian low-cost carrier.

Lufthansa has been in contact with Norwegian and whether an agreement is reached will depend on the price on offer and the strategic value the purchase would add for the German carrier, the CEO said in an interview.

Since IAG announced it had bought a stake in April, Norwegian Air has said it has received enquiries from several parties regarding acquisitions, transactions and other forms of cooperation.

Norwegian Air was not immediately available for comment. After the failures of Air Berlin and Monarch last year, airline executives have predicted more consolidation this year in Europe, especially as rising oil prices make life tougher for carriers with weaker finances.

Spohr told earlier this month that Lufthansa would grab more takeover opportunities if they arose and that carriers were all in contact with each other. After taking over parts of Air Berlin last year and acquiring the remaining stake in Brussels Airlines to expand its Eurowings brand, Lufthansa has also eyed Alitalia, though the sale process is being held up by political turmoil.

Lufthansa had previously been interested in Scandinavian carrier SAS, but two years ago said it had decided not to invest.

IAG's CEO has said that he will not engage in a bidding war for Norwegian, repeating to shareholders last week that Norwegian was not a deal the group had to do.

Disclaimer: This article was issued by Linda De Luca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.