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Texas Instruments CEO signals alignment with Elliott’s proposals

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Haviv Ilan, President and chief executive officer of Texas Instruments.

Courtesy: Texas Instruments

Texas Instruments CEO Haviv Ilan signaled on Thursday that the semiconductor giant would be open to a “constructive dialogue” with activist investor Elliott, and pointed to fresh financial metrics that aligned with the hedge fund’s proposals from earlier this week.

“We definitely look forward to engaging in a constructive dialogue with Elliott,” Ilan said at AllianceBernstein’s Strategic Decisions conference, marking his first public remarks since the activist revealed a $2.5 billion position in the company.

Elliott in a Tuesday letter first reported by CNBC said that it had “tremendous respect” for TI, but that the company had struggled compared to its peers to deliver shareholder returns. To solve that, Elliott said the company should adopt a “dynamic capacity-management strategy,” set a free cash flow target of $9 per share by 2026, above what investors currently expect, and align its capital expenditures to its revenue.

In his comments on Thursday, Ilan suggested the company would be willing to go beyond that $9 ask, pointing to Texas Instruments’ FCF trendline, which showed the company reaching $12 per share in 2026 and $13.3 by 2027.

“The trendline is there,” Ilan said. “This is what guides us.”

The CEO also said capital allocation beyond 2026 would be determined “based on where revenue is.” That could be from 0% to 10%, Ilan added.

Texas Instruments has spent heavily on chip fabrication plants, or fabs, as it seeks to maintain its dominant position in the analog semiconductor market. That has come through capex but also via M&A — in 2021, TI acquired a 300-mm fab in Utah for $900 million from Micron Technologies.

Elliott described TI’s overall business positively, noting its long history of sound strategy.

But that growth in capex has come at a significant cost to free cash flow per share, a self-declared key metric for TI, Elliott noted. By Elliott’s analysis, FCF per share fell from $6.40 in 2022 to $1.47 per share in 2023. Moreover, Elliott questioned whether TI was growing its capacity at a “magnitude and pace” that was appropriate relative to expected demand, observing that the 2026 revenue TI planned to achieve from the expanded capacity was more than 50% higher than what analysts thought the company could get.

Analog semiconductors have long been TI’s bread and butter. Analog semiconductors measure relatively straightforward data — temperature level or an electrical current, for example — compared to the more technologically advanced digital semiconductors that power computers. But it remains a giant business, accounting for $13 billion or 74% of TI’s revenue in 2023.



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Hurricane Beryl hits Texas after going into record books as earliest category five storm

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Hurricane Beryl became the earliest hurricane on record to develop into a category five storm, as warming oceans fuelled destruction across the Caribbean and Mexico’s Yucatán peninsula, before it reached Texas on Monday as a category one event.

Beryl was expected to bring winds of 80mph to parts of the Texas coast on Monday, with flash flooding expected along the Gulf coast and eastern Texas, the US National Hurricane Center said.

The hurricane left a trail of devastation as it moved north west across the past week, after beginning last week with maximum sustained wind speeds of about 160mph at its peak.

It reached north-east of the Mexican coastal resort of Tulum with maximum winds near 110mph on Friday, bringing strong winds, dangerous storm surge and heavy rain. After weakening as it travelled through the Caribbean it then gained strength again as it approached the Gulf coast.

The Hurricane Center said Beryl was expected to weaken to a tropical storm as it moved inland in Texas on Monday and then further slow into a tropical depression by Tuesday.

The storm centre was tracking towards Houston, and forecast to bring heavy rain and potential flooding, with 2mn homes and businesses without power by mid-morning on Monday, according to website poweroutage.us.

Beryl first made landfall last Monday on Carriacou, an island that is part of Grenada, as well as hitting St Vincent and the Grenadines, causing widespread damage and several deaths, before battering Jamaica’s southern coast and sweeping past the Cayman Islands.

Simon Stiell, the head of the UN’s climate change arm who is from Carriacou, said his homeland had been “hammered by Hurricane Beryl”.

“It’s clear that the climate crisis is pushing disasters to record-breaking new levels of destruction,” he said, urging countries to set more ambitious plans to tackle global warming.

“This is not a tomorrow problem. This is happening right now in every economy, including the world’s biggest — disasters on a scale that used to be the stuff of science fiction are becoming meteorological facts, and the climate crisis is the chief culprit.”

Scatter plot of Atlantic storms that have made landfall between 1983 and 2004, showing that Hurricane Beryl is the earliest category 5 Atlantic storm in decades, according to data from the U.S. National Oceanic and Atmospheric Administration. 82% of storms were between August and November.

The Alliance of Small Island States, a group of about 40 low-lying countries threatened by rising seas across the Caribbean, Pacific, Africa, Indian Ocean and South China Sea, said the hurricane highlighted the urgent need for finance to help them deal with the effects of climate change.

While the “full extent of the losses and damages are yet to be ascertained, lives have been lost, homes have been ground to nothing, shelter, security, memories, history — all gone”, said Aosis chair Fatumanava-o-Upolu III Dr Pa’olelei Luteru.

Beryl is the second named Atlantic storm this season, following Alberto in June.

In May, the US’s National Oceanic and Atmospheric Administration warned that there was an 85 per cent higher chance of an above average hurricane season in the Atlantic this year.

The agency said it expected 17 to 25 named storms bearing winds of 39mph or higher this season. Between eight and 13 of those storms were expected to become hurricanes with wind speeds of 74mph.

Noaa said the rise in storms was linked to a “confluence of factors” that favoured tropical storm formation, including record-breaking ocean temperatures, the expected shift to the naturally occurring La Niña weather phenomenon across the Pacific and reduced Atlantic trade winds that allowed hurricanes to grow in strength without the disruption of strong wind shear.

“Human-caused climate change is warming our ocean globally and in the Atlantic basin and melting ice on land, leading to sea level rise, which increases the risk of storm surge,” Noaa warned.

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here



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Asda scraps physically exhausting 4-day workweek, revealing critical factor in its failure

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Asda is scrapping plans to introduce a four-day week as complaints from exhausted staff highlighted a vital misstep in successfully implementing shortened working patterns.

The supermarket chain launched a trial to see employees work their 44-hour week over four days instead of five for the same pay. That translated into 11-hour shift patterns for labor-intensive work.

Inevitably, the idea of fulfilling the same weekly hours in a shorter timespan had adverse consequences for Asda employees. Staff described the shifts as “physically demanding,” while the early starts and late finishes left those depending on public transport in a bind.

Parents who work at Asda also faced issues coordinating childcare and school pick-ups and drop-offs under the 11-hour shifts.

The group decided not to continue with the condensed four-day workweek, but is trialing a flexible 39-hour week over five days.

“We will continue to test different flexible working patterns to assess how these can benefit our colleagues and our business,” a spokesperson for Asda told Fortune.

Asda isn’t the only company that has faced fitness issues from staff after trying to introduce a condensed working pattern. 

The insurance company Domestic & General introduced a similar condensed working week but also faced complaints from staff who were left psychologically exhausted.

“Half the team absolutely loved it, half of the team didn’t like it at all—it makes for a longer day, it’s a bit more intense,” Crummack told The Telegraph. “For them, spreading the work across five was easier to manage psychologically,” 

Last year, Crummack told Bloomberg that companies implementing a four-day week tend to lose “flexibility” and inevitably force workers to pick up extra work on the fifth day anyway.

How to successfully bring in a 4-day week

Asda’s and D&G’s announcements came just days before South Cambridgeshire council hailed the resounding success of its four-day week trial.

The council’s 450 employees carried out the biggest-ever public sector trial of a four-day workweek.

Among the benefits was a 39% reduction in staff turnover, which helped save the council £371,500 ($476,000), thanks to lower staff agency costs, The Guardian reported.

At the same time, the council said it processed 15% more major planning applications, while household planning applications were completed a week and a half earlier, indicating a huge productivity boost.

“We know we cannot compete on salary alone and have needed to find bold new ways of tackling our recruitment and retention issues,” John Williams, the lead South Cambridgeshire council member for resources, told The Guardian.

Four-day week trials have increased in recent years, with varying results showing success isn’t guaranteed.

The most successful trials tend to see employees shorten their hours for the same pay, as with South Cambridgeshire Council. While increasing retention rates, several studies 

A four-day week trial saw more than 60 companies and nearly 3,000 employees in the U.K. experiment with the 100:80:100 model, where staffers received 100% of their pay for 80% of their time while delivering 100% productivity. 

A year after the trial’s completion, Autonomy found that 89% of companies were still implementing a four-day week after employees saw burnout drop significantly and employers enjoyed a fall in attrition.

However, the latest results from Asda and D&G suggest that the benefits of an extra day off are canceled out if employers try to make their employees work the same number of hours in fewer days.

While U.K. companies and public organizations experiment with increasing their employees’ leisure time, Greece is taking the opposite approach in search of productivity gains. 

The country has relaxed labor laws in some industries, allowing companies to hire workers who work 48-hour weeks.



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Danish brewer Carlsberg to buy soft drinks maker Britvic

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A can of Carlsberg AS pilsner and a Britvic Plc apple drink arranged in London, UK, on Friday, June 21, 2024. 

Hollie Adams | Bloomberg | Getty Images

LONDON — Soft drinks maker Britvic has agreed to a sweetened takeover bid of £3.28 billion ($4.2 billion) from Carlsberg, the companies said Monday.

The deal agreed offered 1,290 pence per share for Britvic, with a small dividend that gives shareholders 1,315 pence per share.

Britvic in June refused an improved cash takeover bid from Carlsberg offering 1,250 pence per share of the British soft drinks maker. It said at the time that the proposal “significantly undervalues Britvic, and its current and future prospects.” Carlsberg’s previous June 6 offer price of 1,200 pence per Britvic share was also declined.

Ian Durant, the non-executive chair of Britvic, said the proposed deal “creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors.” He also namechecked Carlsberg’s agreement with PepsiCo which, he said, provides the “combined group with a strong platform for continued success.”

Carlsberg CEO Jacob Aarup-Andersen said in the same statement that the deal combines “Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and markets in Western Europe.”

PepsiCo is key to the deal, as Britvic bottles and distributes PepsiCo brands in the U.K. and Ireland. Carlsberg and PepsiCo earlier this year agreed to waive a “change of control clause” in the bottling contract.



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