Broadcom-VMware deal; SEC and ESG; Potash market turmoil

Welcome to Next, a weekly newsletter highlighting some of our unique news and research on how technology is reshaping the future of industries across global markets. As part of our expanded cross-sector tech coverage, we will curate some of our best insights and features on topics such as artificial intelligence, internet of things, cybersecurity, 5G, smart cities, autonomous vehicles, clean energy, telehealth and financial technology.

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Top News

Broadcom's deal to acquire VMware will allow the chipmaker to diversify its core business of producing and selling semiconductors by aggressively moving into the lucrative enterprise software space. In the cash-and-stock deal, which values VMware at $61 billion, Broadcom would almost triple the current size of its software business, making it the fifth-largest software provider in the world, according to S&P Capital IQ. The enterprise software business also typically reports higher margins and more stable recurring revenue than Broadcom's historic semiconductor business, analysts noted.

The U.S. Securities and Exchange Commission has started to hold publicly traded companies accountable for their environmental, social and governance promises while still taking comments on its plan to require climate risk disclosures. The agency took the rare step on May 23 of charging BNY Mellon Investment Adviser Inc. with making "misleading statements" to investors about conducting ESG reviews for certain mutual funds labeled "sustainable." The SEC concluded that the funds did not consistently undergo such reviews and fined the firm $1.5 million.

Potash giants outside Russia and Belarus have yet to rush out major mine expansions to fill near-term supply gaps, even after months of sanctions and war have upended fertilizer markets. The decision to expand operations might seem like an obvious choice given that Belarus and Russia, which together account for about 37% of the global potash market, now face difficulties in selling and shipping bulk fertilizers.

Chart of the Week

Cybersecurity M&A shows little sign of fatigue

Macroeconomic concerns have caused many technology investors to hit the brakes, but cybersecurity M&A has shown little sign of slowing down.

Tech, Media and Telecom

Broadcom pursues software's stability with $61B VMware deal

Broadcom Inc.'s deal to acquire VMware Inc. will allow the chipmaker to diversify its core business of producing and selling semiconductors by aggressively moving into the lucrative enterprise software space.

Plan to open source Twitter algorithm raises transparency, revenue questions

Elon Musk's plan to open source Twitter Inc.'s algorithm may not do much to increase transparency, but it could prove a lucrative business opportunity if enough people can understand it.

Upfronts: The CW sets revamped fall lineup, awaits possible sale

While The CW (US) concluded the upfront presentations in New York this week, much attention remains focused on what could lie ahead for the young-adult skewing network.

Fintech

Fintech M&A deal tracker: Building for the long term amid market turbulence

The financial technology sector had fewer sizable deals year to date compared to 2021, as companies and investors navigate stock market turbulence and macroeconomic uncertainties, though the pace of transactions overall in the space remained steady.

Metals and Mining

US lithium imports up 69% YOY in Q1 as automakers build out EV battery capacity

The U.S. imported 13,560 tonnes of processed and refined lithium materials in the first quarter, 69% more than in the same quarter in 2021 and 21.9% more than in the previous quarter, according to S&P Global Market Intelligence data.

Potash miners holding off major expansions despite market turmoil

Potash giants outside Russia and Belarus have yet to rush out major mine expansions to fill near-term supply gaps, even after months of sanctions and war have upended fertilizer markets.

Energy

SEC gets serious about ESG accountability as climate risk rule looms

The U.S. Securities and Exchange Commission has started to hold publicly traded companies accountable for their environmental, social and governance promises, while still taking comments on its plan to require climate risk disclosures.

Top Research

Banks, fintechs need new revenue sources in ASEAN's $3 trillion cashless future

Southeast Asia is rapidly replacing cash, but banks and financial technology companies aiding the transformation are not reaping much revenue from it. In our view, companies issuing cards and wallets must chart a new path to boost revenues.

Assessing wind speeds, potential performance across Atlantic offshore portfolio

With 28 GW in planned offshore wind, 10 states across the U.S. East Coast are capitalizing on robust wind conditions along the nation's northernmost Atlantic shore, where average wind speeds hover at about 9 meters per second, pursuing optimal performance as the U.S. target for CO2 emission reduction by 2030 increasingly looms large.

IM May 2022 — Exploration index retreats from 10-year high

S&P Global Market Intelligence's Pipeline Activity Index, or PAI, retreated from a 10-year high in April, falling to 142 from 148 in March, as decreases in significant financings and drill results were offset by an increase in initial resources.

US utility renewable energy capex remains on upswing; 2022 forecast tops $19B

Utility renewable capital expenditure plans are holding steady despite recent supply chain challenges and an ongoing U.S. Commerce Department investigation into whether certain solar manufacturers are circumventing tariffs on Chinese imports.

From Kagan, a media research group within S&P Global Market Intelligence:

Sports and SVOD: Perfect fit or costly fumble?

The lifestyles of Americans are intrinsically linked to their behavior, creating opportunities as well as constraints on digital entertainment-related products and services.

From 451 Research, a part of S&P Global Market Intelligence:

Cloud permeates nearly every facet of data platforms technology

For some time, cloud adoption and migration for supporting data platform technologies have been common themes in our research and a core component of enterprise modernization efforts. Enterprise appetite for all things cloud shows no signs of letting up, according to results from the latest 451 Research enterprise end-user survey on data platforms and analytics.

451 Research Datacenter KnowledgeBase

Using the 451 Research Datacenter KnowledgeBase dataset, now available via Xpressfeed™ and Snowflake, you can assess market and region energy current and future demand from data centers.

Learn more on the S&P Global Marketplace

Want to hear more?

Listen to the latest episode of "Media Talk," an S&P Global Market Intelligence podcast. In this episode, PointsBet USA CEO Johnny Aitken and senior reporter Mike Reynolds discuss the evolution of sports betting to become a mainstream entertainment platform. The nascent industry's rise and the host of sportsbook operators chasing the action are leading to increased levels of engagement and viewing with sports telecasts.

Listen to the latest episode of "Next in Tech," a weekly podcast featuring 451 Research and other areas of S&P Global Market Intelligence. Can cars make the transition to being a subscription service? Consumers see value in vehicle-specific services but have grown accustomed to using personal devices for functions like navigation and entertainment. Returning guests Mark Fontecchio and Johan Vermij join host Eric Hanselman to sort out what works in this transition and what's possible.