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Business

Kohl’s CEO Michelle Gass Resigns to Join Levi Strauss

November 8, 2022 Admin Leave a comment

Kohl’s Corp.

KSS 7.80%

Chief Executive

Michelle Gass

is leaving the department-store chain early next month to join

Levi Strauss

LEVI -2.12%

& Co. with plans to have her take over as the jeans maker’s CEO.

At Kohl’s, Ms. Gass has been under attack from activist investors for sales declines and a steep drop in the company’s stock price. In September, activist investor Ancora Holdings Inc., urged the company to replace Ms. Gass and its chairman. Kohl’s shares, down nearly 40% on the year, jumped 8% in early Tuesday trading.

Ms. Gass will leave Kohl’s Dec. 2 and join Levi Jan. 2, where she will serve as president with oversight of Levi’s brand and global digital and commercial operations. The 54-year-old will succeed Levi’s CEO

Chip Bergh

within 18 months, the company said. Mr. Bergh, who is 65 years old, has run Levi Strauss since 2011.

Kohl’s appointed

Tom Kingsbury

to serve as interim CEO until a permanent successor is named. Mr. Kingsbury is a former

Burlington Stores Inc.

CEO who joined Kohl’s board in 2021 as part of a settlement with activists. In a statement, Ancora said it was the right time to find new leadership and it was pleased that Mr. Kingsbury was the interim CEO.

Kohl’s also released preliminary results for the quarter ended Oct. 29. The company said that same-store sales decreased 6.9% compared with a year earlier. Net sales fell 7.2%. The company earned 82 cents a share compared with $1.65 a share.

It plans to report full results on Nov. 17.

Kohl’s, with roughly 1,100 stores, has struggled to attract shoppers amid rising competition from discounters, fast-fashion chains and online competitors. Earlier this year, Kohl’s scrapped plans to sell itself to the owner of Vitamin Shoppe—in a debt-funded deal initially worth $8 billion but later reduced. The company’s market capitalization has fallen to around $3 billion.

Ms. Gass wasn’t schooled in the art of selling clothes. She studied chemical engineering at Worcester Polytechnic Institute and received a master’s in business administration from the University of Washington. She then spent six years honing her marketing skills at

Procter & Gamble Co.

before joining

Starbucks Corp.

in 1996.

When she departed the coffee chain after nearly 17 years, founder

Howard Schultz

credited her with helping develop such products as the Frappuccino.

Ms. Gass joined Kohl’s in 2013 as chief customer officer with responsibility for marketing and the e-commerce business. In 2015, her role expanded to chief merchandising officer, and in 2018 she took over as CEO and joined the board.

Ms. Gass had some early success at the helm of Kohl’s, telling her team that they needed to think differently and shouldn’t be afraid to try new ideas. She formed a partnership with

Amazon.com Inc.

that allowed shoppers to use Kohl’s stores to return goods bought at the online retailer. Last year, she wooed Sephora away from JCPenney, where it had operated shops for more than a decade.

She overhauled the merchandise, dropping poorly performing brands such as Dana Buchman, and bringing in new ones, including Tommy Hilfiger, Eddie Bauer and Cole Haan. She expanded the selection of activewear from brands such as

Nike Inc.,

Adidas AG and

Under Armour Inc.

Ms. Gass also simplified discounts and pricing and is refurbishing stores. The company is on track to repurchase $1.3 billion in stock in the current fiscal year.

Yet, the moves haven’t improved Kohl’s business enough to satisfy some shareholders. While sales initially increased, they had started to decline even before the pandemic forced retailers to temporarily shut stores and kept consumers homebound. The company has faced two years with activist investors calling for board changes.

—Dean Seal and Lauren Thomas contributed to this article.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

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Business

TuSimple Fires CEO Xiaodi Hou Amid Federal Probes

October 31, 2022 Admin Leave a comment

TuSimple Holdings Inc.,

TSP -46.16%

a self-driving trucking company, said Monday it had fired its chief executive and co-founder,

Xiaodi Hou.

The San Diego-based company said in a news release and securities filing that its board of directors on Sunday had ousted Mr. Hou, who was also the board chairman and chief technology officer.

Mr. Hou was fired in connection with a continuing investigation by members of the board, the release said. That review “led the board to conclude that a change of Chief Executive Officer was necessary,” the company said in the release.

The securities filing said that the board’s investigation found that TuSimple this year shared confidential information with Hydron Inc., a trucking startup with operations mostly in China and funded by Chinese investors. The filing also said that TuSimple’s decision to share the confidential information hadn’t been disclosed to the board before TuSimple entered into a business deal with Hydron.

TuSimple said it didn’t know whether Hydron shared, or publicly disclosed, the confidential information, the securities filing said.

Messrs. Hou and Chen didn’t immediately respond to a request for comment.

Mr. Hou’s termination was announced the day after The Wall Street Journal reported TuSimple and its leadership, principally Mr. Hou, faced investigations by the Federal Bureau of Investigation, Securities and Exchange Commission and Committee on Foreign Investment in the U.S., known as Cfius, into whether the company improperly financed and transferred technology to a Chinese startup, according to people with knowledge of the matter.

TuSimple’s stock plunged more than 44% Monday. Shares in the company are down more than 90% for the year.

Investigators at the FBI and SEC are looking at whether Mr. Hou breached fiduciary duties and securities laws by failing to properly disclose TuSimple’s relationship with Hydron, the China-backed startup founded in 2021 by TuSimple co-founder Mo Chen that says it is developing autonomous hydrogen-powered trucks, the Journal reported. Federal investigators are also probing whether TuSimple shared with Hydron intellectual property developed in the U.S. and whether that action defrauded TuSimple investors by sending valuable technology to an overseas adversary.

The Journal also has reported that the board in July began investigating similar issues, including whether TuSimple incubated Hydron in China without informing regulators, the TuSimple board or its shareholders, said other people familiar with the matter. A June business presentation from Hydron viewed by the Journal named TuSimple as Hydron’s first customer, and said TuSimple would purchase from Hydron several hundred hydrogen-powered trucks equipped with self-driving technology. A TuSimple spokesman said the company has considered an agreement to buy freight trucks from Hydron but isn’t a Hydron customer.

TuSimple’s securities filing on Monday said that TuSimple employees worked for Hydron and were paid, earning less than $300,000. The board wasn’t aware of this nor had members approve it, the filing said. Mr. Chen, who founded and leads Hydron, is TuSimple’s largest shareholder, owning about 11.8% of the company, according to FactSet.

Mr. Hou’s dismissal follows months of upheaval at the company, including the departures of its chief financial officer and chief legal officer and a sharp drop in its stock price. Much of the turmoil began when Mr. Hou took over as CEO in March, said former employees.

In April, one of TuSimple’s autonomous semi trucks crashed on an Arizona freeway. The accident revealed safety and security problems at TuSimple that former employees said leadership had dismissed, the Journal reported in August.

The company said

Ersin Yumer,

TuSimple’s executive vice president of operations, will serve as interim CEO while the board searches for Mr. Hou’s successor. Mr. Yumer previously worked on autonomous-vehicle technology at

Aurora Innovation Inc.,

Uber Technologies Inc.

and Argo AI, the autonomous-driving venture partly owned by

Ford Motor Co.

and

Volkswagen AG

that was shut down recently. Independent board director

Brad Buss,

the former chief financial officer at SolarCity Corp. and Cypress Semiconductor Corp., will be chairman, TuSimple said.

TuSimple said it would release its third-quarter earnings on Monday after the market closes. The earnings release was previously scheduled for Tuesday. The company, ahead of the results, said it remained on track to meet the full-year guidance disclosed in August, including ending the year with a cash balance of about $950 million.

Write to Heather Somerville at heather.somerville@wsj.com and Kate O’Keeffe at kathryn.okeeffe@wsj.com

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Business

Melvin Capital to Close Funds, Return Cash to Investors

May 18, 2022 Admin Leave a comment

Melvin Capital plans to close its funds and return the cash to its investors, capping a stunning reversal for a firm that lost big on the surge in meme stocks last year and on wagers on growth stocks this year.

In a letter to investors that was reviewed by The Wall Street Journal,

Gabe Plotkin,

Melvin’s founder, wrote that he reached his decision after conferring with Melvin’s board of directors during a monthslong process of reassessing his business.

“The past 17 months has been an incredibly trying time for the firm and you, our investors,” he wrote. “I have given everything I could, but more recently that has not been enough to deliver the returns you should expect. I now recognize that I need to step away from managing external capital.”

Asset bubbles are easy enough to define, but not so simple to identify. WSJ’s Gunjan Banerji explains what bubbles are exactly, how they form and what happens when they burst. Illustration: Jacob Reynolds for The Wall Street Journal

Melvin had been, until last year, one of the top-performing hedge funds—its track record of about 30% a year after fees before 2021 was among the best on Wall Street. It was especially known for its prowess in shorting, or betting against, stocks. In 2015, gains from Melvin’s shorts made up two-thirds of the fund’s 67% returns before fees. Mr. Plotkin bought a minority stake in the National Basketball Association’s Charlotte Hornets, plus a $44 million oceanfront mansion in Miami Beach.

But Melvin’s short positions blew up in January 2021 when individual investors on online forums such as Reddit’s WallStreetBets banded together to push up prices of shares, like those of

GameStop Corp.

, that Melvin was betting against. At the worst point that month, Melvin, which managed $12.5 billion at the start of last year, was hemorrhaging more than $1 billion a day.

While Melvin had made up some of those losses by the end of the year, its focus on fast-growing companies dealt it further setbacks this year as investors soured on such stocks in the face of rising interest rates. Stock pickers also have blamed losses this year on macroeconomic factors like inflation and the war in Ukraine that have hit the market, instead of companies’ own fundamentals. Melvin’s losses widened.

Melvin this year through April had lost 23%, on top of a 39.3% loss in 2021—a huge hole investors expected could take years to make up if Mr. Plotkin didn’t shut down in the interim. Since its start, it has averaged an 11.9% return.

Still, several investors on Wednesday said they were surprised by the decision.

Melvin’s executives as recently as last week had been asking clients for their thoughts on what new fee arrangements seemed fair to them and to Melvin, people familiar with the firm said. Mr. Plotkin in April tried to do away with Melvin’s so-called high-water mark, a standard industry arrangement in which hedge funds don’t collect performance fees until their clients are made whole from prior investment losses. The proposal was part of a broader restructuring effort meant in part to retain and motivate his team, but it met with resistance.

Some investors were so incensed by the proposal they said they planned to redeem all their money at the first opportunity. Mr. Plotkin withdrew his plan days later and apologized to investors, saying he would consult with all of Melvin’s clients as the firm worked to figure out a new path forward.

Investors had been sharing various proposals they thought would be fair, including one by which Mr. Plotkin would keep the current terms until the end of the year and then implement a modified high-water mark that would have let Melvin collect lower performance fees, people familiar with the firm said.

Mr. Plotkin wrote in the letter, “I have worked tirelessly for 20 years to try to be the best I could be and to build and lead an exceptional team of professionals…Being a steward of your capital requires an unrelenting focus. I am proud of what our team has accomplished since 2007.”

He wrote he expected to return nearly all of his clients’ money by late July. Firmwide, Melvin managed $7.8 billion as of April.

Write to Juliet Chung at juliet.chung@wsj.com

Appeared in the May 19, 2022, print edition as ‘Melvin To Close Funds, Pay Back Investors.’

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Business

Credit Suisse’s António Horta-Osório Lost Board Support Over Covid-19 Rules Breach

January 17, 2022 Admin Leave a comment

He came to fix

Credit Suisse Group AG’s

broken culture. Then he became part of the problem.

António Horta-Osório

was hoping for a slap on the wrist Sunday from the

Credit Suisse

CS 0.38%

board for breaking coronavirus quarantine rules on trips to events, according to people familiar with his departure. Instead, he had to leave his job as the bank’s chairman for not upholding the high standards he set when joining Credit Suisse eight months ago.

Mr. Horta-Osório had to leave after most members of the board refused to back him at a meeting that ran late into the Zurich evening, ending weeks of attempts by the bank to contain its latest crisis. A bank probe into Mr. Horta-Osório’s travel found he had breached quarantine rules in England and Switzerland since starting at Credit Suisse, including to attend the Wimbledon tennis final in July.

The Portugal-born banker also used private aircraft hired by Credit Suisse to combine personal travel and work trips that made some on the board uncomfortable, according to people familiar with the matter.

Credit Suisse found Chairman António Horta-Osório had breached quarantine rules in England and Switzerland.

Photo:

Chris J. Ratcliffe/Bloomberg News

A spokesman for Mr. Horta-Osório said the jet use was “in line with that of his predecessor in the role and actually similar to other senior colleagues in the bank. It was also never used without a business-related reason and this has been confirmed by an internal audit.”

Some members of the board were concerned Mr. Horta-Osório was no longer credible with employees or customers to fix what had come to be seen as a broken culture at the bank around risk taking, the people familiar with the matter said.

The sudden departure adds to a nightmarish stretch for the bank. In February 2020, Chief Executive

Tidjane Thiam

was ousted by the bank’s board for failing to contain the reputational fallout from a scandal that involved some staff being followed by private investigators. Then last year it was hit by twin crises, with the collapse of clients Greensill Capital and Archegos Capital Management.

Axel Lehmann,

Mr. Horta-Osório’s successor as chairman, who was appointed on Sunday, has been vetted by Switzerland’s financial regulator, having joined Credit Suisse’s board in October after working at rival

UBS Group AG

for more than a decade.

Mr. Lehmann is described by people who have worked with him as an archetypal Swiss professional, with a pleasant demeanor and tough interior. An attribute he brings to the role is a high-functioning relationship with Swiss regulators and other power brokers in the country, some of the people said.

Mr. Horta-Osório’s departure makes him one of the biggest casualties of coronavirus rule breaches. Two Canadian executives resigned from their posts last year after traveling to get vaccinated. Separately, the head of a Canadian pension fund resigned after The Wall Street Journal reported he traveled to the Middle East to get an early vaccine dose.

In December, Mr. Horta-Osório apologized to board members—and publicly—for leaving Switzerland when he was supposed to be in quarantine after a trip to London. He said it was inadvertent. He also apologized to board members for using private aircraft hired by Credit Suisse to stop off for a vacation in the Maldives on the way back from a work trip, people familiar with the trip said. His stance was that the travel complied with company rules, according to some of the people.

The deterioration in some on the board’s trust escalated after Reuters reported in late December on Mr. Horta-Osório’s Wimbledon trip and quarantine breach, according to some of the people. In the new year, the board’s audit committee reviewed a report into his travel and the quarantine breaches, and Credit Suisse started preparing for Mr. Horta-Osório’s possible departure, according to some of the people familiar with the matter.

Mr. Horta-Osório attended Wimbledon’s tennis finals believing a waiver from England’s quarantine rules had been arranged for him by Credit Suisse, his spokesman said. Mr. Horta-Osorio attended the tournament with members of his family and a bank adviser after Credit Suisse clients canceled, he said.

The timing of the missteps struck a nerve with many Credit Suisse employees, and the order-minded Swiss public. Swiss media compared Mr. Horta-Osório’s conduct to that of British Prime Minister

Boris Johnson

and tennis star Novak Djokovic, who fanned anger this year for appearing to be unfettered from national coronavirus restrictions.

Credit Suisse is an elite banking brand abroad, but at home in Switzerland has household and business customers of all sizes as the country’s No. 2 bank by assets. Having the top person failing to comply with Swiss rules was seen as an unacceptable situation, according to some of the people familiar with the matter.

One of the people familiar with the matter said Mr. Horta-Osório attended Sunday’s meeting hoping to be fully supported by the board, which includes recent appointments he made. The chairman resigned when it became apparent he didn’t have enough support.

Mr. Horta-Osório was supposed to save Credit Suisse from being scandal-prone. He received a British knighthood for his last job turning around the U.K.’s

Lloyds Banking Group PLC,

adding to civil awards in Spain, Brazil and Portugal. People who have worked with him said he is demanding, exacting and takes his reputation seriously.

He agreed in late 2020 to join Credit Suisse as its chairman, a prestigious role in Switzerland for an institution that dates to 1856. The idea was it would be his main job alongside several other board mandates, to ease into a less-stressful existence than running Lloyds, according to people familiar with his planning.

Mr. Horta-Osório’s tenure at Lloyds wasn’t without drama. Eight months into that job, in 2011, he took a two-month hiatus to check into a rehabilitation clinic suffering from exhaustion. Then, in 2016, he apologized to Lloyds staff after the Sun newspaper published photographs of Mr. Horta-Osório, who is married with three children, with another woman during a work trip to Singapore. He said he regretted the adverse publicity and damage to Lloyds’s reputation. He said he paid for any personal expenses on the trip.

A few weeks before his April 30 start date, Credit Suisse incurred a loss of more than $5 billion when Archegos, a family investment firm led by

Bill Hwang,

defaulted on large stock positions.

Mr. Horta-Osório sought to reset the risk button, shedding the bulk of Credit Suisse’s unit servicing hedge funds and centralizing oversight at its main units. He exhorted employees to be more personally responsible and accountable for their actions, and, according to people familiar with the matter, put Chief Executive

Thomas Gottstein

and other top executives on notice to hit the top of their game or leave.

Write to Margot Patrick at margot.patrick@wsj.com and Emily Glazer at Emily.Glazer@wsj.com

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Business

Credit Suisse Chairman to Leave After Breaking Covid Travel Rules

January 17, 2022 Admin Leave a comment

Credit Suisse Group AG

CS 0.38%

Chairman

António Horta-Osório

is leaving the global bank following a board investigation into his travel and personal conduct, according to people familiar with the bank.

Credit Suisse said late Sunday that Mr. Horta-Osório had resigned following an investigation commissioned by the board. The people said the investigation examined his conduct, including travel that breached Covid-related government rules and his personal use of corporate aircraft. He joined the Credit Suisse board less than a year ago.

Credit Suisse said board member

Axel Lehmann

was appointed to take over the chairman role, effective immediately. Mr. Lehmann, a former executive at UBS Group AG, joined the Credit Suisse board in late 2021 and is chair of its risk committee.

Spokespeople for Credit Suisse didn’t respond to requests for comment. Mr. Horta-Osório couldn’t be reached late Sunday, and a lawyer for him didn’t respond.

“I regret that a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally,” Mr. Horta-Osório said in a Credit Suisse news release. “I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time.”

Mr. Horta-Osório’s departure hits Credit Suisse at a vulnerable time. He was appointed to help clean up the Swiss bank’s problems. Credit Suisse is still digging out of turmoil after it lost $5.5 billion from the implosion of hedge fund Archegos Capital Management and entangled itself with the now-insolvent finance firm Greensill Capital.

Credit Suisse shares slipped around 1.6% early Monday. The stock has been one of the worst performing among major banks globally over the past year, and failed to recover ground after the Greensill and Archegos disasters.

Mr. Horta-Osório got caught up in his own troubles in recent weeks, breaking quarantine rules by flying from London to Zurich on Nov. 28. The trip came a day after Switzerland imposed a 10-day quarantine on arrivals from the U.K. and several other countries because of the Omicron surge. He said at the time that the breach was unintentional and that it was reported to health authorities and Swiss financial regulator Finma. He apologized and said it wouldn’t happen again.

After the quarantine breach, Credit Suisse said compliance with laws and guidelines was a priority for the bank and the chairman. A Finma spokesman said at the time it was in touch with Credit Suisse on the matter.

Reuters reported in December that the bank was investigating Mr. Horta-Osório’s travel and that he attended the Wimbledon tennis finals in the U.K. in July, when the country’s Covid-19 rules required him to be in quarantine. Swiss press separately reported the chairman used corporate aircraft in the fall to travel for a vacation in the Maldives. At the time, Credit Suisse said it had rules around private-jet use for the chairman and other executives.

The Portuguese native developed a reputation as one of Europe’s most highly regarded bankers after turning around

Lloyds Banking Group

PLC, where he was CEO for a decade. At Credit Suisse, he had said he would re-evaluate the bank’s risk taking; review its culture, pay and incentives; and focus on personal responsibility and accountability of staff.

“We need to foster a culture that reinforces the importance of risk management,” Mr. Horta-Osório said of Credit Suisse soon after becoming chairman in April 2021.

Credit Suisse will officially propose Mr. Lehmann as chairman at its shareholder meeting on April 29. “We have set the right course with the new strategy and will continue to embed a stronger risk culture across the firm,” Mr. Lehmann said in the news release.

Speakers at the WSJ CEO Council Summit weigh to what extent the government should be able to require Covid-19 vaccinations.

Write to Emily Glazer at emily.glazer@wsj.com and Margot Patrick at margot.patrick@wsj.com

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FBI Tracks Threats Against Teachers, School-Board Members

November 16, 2021 Admin Leave a comment

WASHINGTON—The Federal Bureau of Investigation has set up a process to track threats against school-board members and teachers, moving to implement a Justice Department directive that some law-enforcement officials and Republican lawmakers say could improperly target parents protesting local education policies.

The heads of the FBI’s criminal and counterterrorism divisions instructed agents in an Oct. 20 memo to flag all assessments and investigations into potentially criminal threats, harassment and intimidation of educators with a “threat tag,” which the officials said would allow them to evaluate the scope of the problem.

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Business

Exxon Debates Abandoning Some of Its Biggest Oil and Gas Projects

October 20, 2021 Admin Leave a comment

Exxon Mobil Corp.’s

XOM 0.28%

remade board of directors is debating whether to continue with several major oil and gas projects as the company reconsiders its investment strategy in a fast-changing energy landscape, according to people familiar with the matter.

Members of the board—which includes three directors successfully nominated by an activist investor in May and two other new members—have expressed concerns about certain projects, including a $30 billion liquefied natural gas development in Mozambique and another multibillion-dollar gas project in Vietnam, the people said.

Oil and gas prices are at multiyear highs, and the world is experiencing a shortage of fossil fuels as economies emerge from the pandemic. But it takes years for such energy megaprojects to produce additional supplies, and more years after that for the investments to pay off.

Exxon board members are weighing the fate of future projects as the company is facing pressure from investors to restrain fossil-fuel investment to limit carbon emissions and return more cash to shareholders. Environmentalists and some government officials are also pressuring the company to produce less oil and gas.

The discussions are taking place as part of a review of the oil company’s five-year spending plan, on which the board is set to vote at the end of this month, the people said. It isn’t clear whether the board will make a final call on the Mozambique or Vietnam projects during the current review, according to the people.

Both projects face potential political obstacles, and some Exxon board members have expressed concerns about whether they would return the billions in upfront investment they would require, some of the people said. The board meetings have been cordial, the people said.

Exxon said it doesn’t discuss internal board deliberations. “Any depiction of the board’s discussions as being less than constructive in tone or substance is wrong,” said Exxon spokesman Casey Norton.

As part of the review, Exxon is analyzing the expected carbon emissions from each project and how they would affect the company’s ability to meet pledges to reduce emissions, people familiar with the matter said. The annual projected emissions from the Mozambique and Vietnam projects were among the highest in Exxon’s planned pipeline of oil and gas projects, according to a pre-pandemic internal analysis by Exxon, which was reviewed by The Wall Street Journal.

A Swiss startup has created a giant vacuum cleaner to capture carbon dioxide from the air, helping companies offset their emissions. WSJ visits the facility to see how it traps the gas for sale to clients like Coca-Cola, which uses it in fizzy drinks. Composite: Clément Bürge

Mr. Norton said the analysis of projected carbon emissions the Journal reviewed was several years old and didn’t include the impact of Exxon’s most recent emission reduction plans and other post-Covid-19 changes.

The discussions over the projects represent a new dynamic for Exxon’s board, said people familiar with the matter.

Engine No. 1, the hedge fund that led a campaign that replaced three Exxon board members earlier this year, argued Exxon was investing in low-return projects and lacked a coherent strategy to chart a transition to lower-carbon fuels amid growing concerns about climate change.

The activist was successful in part because it was able to win support from some of the company’s largest investors, including

BlackRock Inc.

and Vanguard Group. The asset managers said one of the reasons they supported the Engine candidates was that Exxon’s board lacked energy expertise and independence.

Gregory Goff, participating in a 2017 conference, is among Exxon directors to question a large Mozambique project, according to people familiar with the matter.

Photo:

F. Carter Smith/Bloomberg News

Gregory Goff,

one of the Engine No. 1 nominees, is among the directors to raise doubts about the Mozambique project, people familiar with the matter said. Mr. Goff, the former chief executive of Andeavor, which was one the largest U.S. refiners before being purchased by

Marathon Petroleum Corp.

, has said that Exxon should consider more closely the risks presented by the project to assess whether it justifies investing, the people said.

The Mozambique project, called Rovuma, would tap vast reserves of natural gas off the coast of the southern African country, then chill them to a liquid state at an onshore plant to be exported around the world. It is one of the largest projects in Exxon’s portfolio, and its proximity to India could give Exxon an opportunity to export gas to a fast-growing market.

But Mozambique lacks infrastructure and is fighting an Islamic State-linked insurgency that has claimed more than 3,000 lives.

TotalEnergies

SE halted construction of a $20 billion gas project there in March after violence erupted near its construction site. Exxon spent $2.8 billion to acquire a stake in the Rovuma project but has delayed a final investment decision for several years. Exxon hasn’t disclosed an exact estimate of the project’s cost; Mozambique has estimated it at $27 billion to $33 billion.

In Vietnam, Exxon and its partners discovered a large gas field in 2011 in waters 50 miles off the coast but have yet to develop it. Gas from the field, known as Ca Voi Xanh or blue whale, would be sent through a pipeline to planned onshore power plants. Vietnamese officials have said the project would generate $20 billion in government revenue. The field is near contested waters claimed by China in the South China Sea, and analysts say China is actively disrupting Vietnam’s offshore oil-and-gas industry, adding geopolitical complications to the project.

Abandoning the projects would represent another setback to plans by Exxon Chief Executive

Darren Woods

to boost spending to increase production. Less than four years ago, Mr. Woods said the company would invest $230 billion to pump an additional one million barrels of oil and gas a day by 2025. Rovuma, in particular, was central to that strategy. The company has already pulled back parts of that strategy after the pandemic decimated demand for oil and gas last year, prompting it to undergo a belt tightening.

Exxon’s fortunes have improved this year along with rising oil and gas prices. Analysts expect Exxon to report more than $6 billion in quarterly profit later this month, after a loss of $680 million during the same period last year. The company has said it would give priority to using cash to pay down debt and fund dividends.

Exxon is planning to declare in coming weeks that it will increase its investment in a low-carbon unit it announced in February by billions of dollars, according to people familiar with the matter. It initially said it would invest $3 billion in the unit through 2025 to commercialize carbon capture and storage, hydrogen, biofuels and other technologies. Most of those businesses aren’t profitable, say analysts, and need significant public-policy support and technological advances to become so.

Exxon is also considering a pledge to reduce and offset the carbon emissions from its operations to zero by 2050, the Journal has reported. Mr. Woods previously called such net zero commitments a “beauty competition.”

Fossil-Fuel Challenges

WSJ coverage of the changing industry, selected by the editors

Write to Christopher M. Matthews at christopher.matthews@wsj.com and Emily Glazer at emily.glazer@wsj.com

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Business

Canadian Pacific Plans New, Higher Bid for Kansas City Southern

August 9, 2021 Admin Leave a comment

Canadian Pacific Railway Ltd. is planning to make a new, increased offer for Kansas City Southern , according to people familiar with the matter, reigniting a takeover battle with Canadian National Railway Co. for the coveted U.S. railroad.

Canadian Pacific’s board of directors met Monday to authorize a bid that values Kansas City Southern near $300 a share, the people said, or about $27 billion. There is no guarantee Canadian Pacific will follow through with the plan; if it does, it is expected to do so soon.

Kansas City Southern is the smallest of the nation’s major freight railroads. The company plays a big role in U.S.-Mexico trade, with a network stretching across both countries and contributing to its desirability as an acquisition target. Railroad takeovers are rare as regulators tend to view them warily, but Kansas City Southern is seen as one of the last operators of size that is potentially available for purchase. Its allure has only grown as the U.S. economy recovers from the slowdown triggered by the coronavirus pandemic.

Canadian Pacific had clinched a cash-and-stock deal with Kansas City Southern valued at around $275 a share, or $25 billion. Kansas City Southern later agreed to a sale to Canadian National instead after CN offered about $30 billion (then worth around $320 a share) and Canadian Pacific declined to raise its offer.

Kansas City Southern shares closed Monday at $269.60 apiece and rose 6.5% in after-hours trading after The Wall Street Journal reported on Canadian Pacific’s plans.

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Tag Archives: Board of Directors

TuSimple Fires CEO Xiaodi Hou Amid Federal Probes

Melvin Capital to Close Funds, Return Cash to Investors

Credit Suisse’s António Horta-Osório Lost Board Support Over Covid-19 Rules Breach

Credit Suisse found Chairman António Horta-Osório had breached quarantine rules in England and Switzerland.

FBI Tracks Threats Against Teachers, School-Board Members

Canadian Pacific Plans New, Higher Bid for Kansas City Southern

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Credit Suisse found Chairman António Horta-Osório had breached quarantine rules in England and Switzerland.

Gregory Goff, participating in a 2017 conference, is among Exxon directors to question a large Mozambique project, according to people familiar with the matter.

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