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DealBook Briefing: Merger Binge Could Lead to a Hangover

Walt Disney’s $71.3 billion bid for most of 21st Century Fox is one of several blockbuster deals announced this year.Credit...Lucy Nicholson/Reuters

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More than $2.5 trillion in deals were announced during the first half of the year, putting M.&.A. in 2018 on pace to surpass $5 trillion. That would be the largest yearly total on record.

DealBook’s Stephen Grocer has some insights on those numbers, including:

• Many of the biggest deals, particularly those in the media business, are bids to fend off competition from tech companies.

• Cross-border deals totaled $1 trillion, despite trade tensions — though it could be too early for that rancor to have an effect.

• The largest portion of deals are takeovers of American companies.

There’s also a warning: Other recent peaks in merger activity have been followed by a recession. Potential trade wars, regulatory uncertainty and rising interest rates could mean this boom will end the same way.

More M.&A. news: Deal makers’s paydays should be more closely tied to whether the transactions they put together work out in the long run, the FT’s John Gapper argues.

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Credit...Saul Loeb/Agence France-Presse — Getty Images

President Trump has repeatedly asserted that his trade spat is intended to stop China from becoming a powerful technological powerhouse that would rival the U.S. But Li Yuan of the NYT points out that a Chinese vision of tech dominance is likely to happen because it is being embraced throughout the nation:

Beijing’s vision of Made in China 2025 — the ambitious state-driven plan to retool China’s industries to compete in areas like automation, microchips and self-driving cars — is not being pushed just by the Communist Party’s top leaders. Instead, the drive is also coming from the bottom up: from the businesses and cities across China that know they must modernize or perish.

Mr. Trump plans to move ahead, and is scheduled to impose tariffs on $34 billion worth of Chinese products as of 12:01 a.m. Eastern on Friday. Beijing has said that it would not impose retaliatory tariffs until Washington had acted, asserting that the U.S. is the one “opening fire” in the trade war.

Elsewhere in trade: Global trade growth is starting to slow. ZTE has resumed some business in America. The American chip maker Micron is hurting after a court in China blocked it from selling some products there. Trump voters may be the biggest losers from new auto tariffs. U.S. tariffs could be a “useful” test of the European economy.

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Wang Jian, center.Credit...Krista Schlueter for The New York Times

Wang Jian, a co-founder of HNA Group and one of China’s richest men, died yesterday from an accidental fall in France. It’s bad timing for the Chinese company, which is trying to revive its fortunes after a debt-heavy spending spree.

Mr. Wang turned a regional Chinese airline into a huge conglomerate, striking multibillion-dollar deals for stakes in Hilton Hotels and Deutsche Bank. But that frenzy left HNA with $90 billion in debt, forcing it to sell dozens of assets amid pressure from Beijing regulators.

Mr. Wang’s death makes HNA’s current goal of simplifying its complex corporate ownership more difficult. He owned a 15 percent stake in the conglomerate, helped create the complex web of ownership, and was the point person for many of the company’s business dealings.

After the financial crisis, stress-tests of the banking system have become a useful check on the industry’s appetite for risk. But Bloomberg Opinion’s Mark Gilbert argues that other financial institutions that have become big lenders should also face tighter scrutiny:

The last financial crisis was notable for its depth, as the swift deterioration in the value of the assets investment banks held on their swollen balance sheets destroyed their equity. The next could be distinguished by its breadth, now that pension funds and other non-bank institutions have stepped in to fill many of the funding gaps left by the banking industry’s enforced retreat.

The European Securities and Markets Authority is set to propose tests that would measure investment funds’ ability to weather sudden changes in liquidity. But the U.S. Treasury Department has said that stress tests for mutual funds are not required. Finding out which side is right could be a painful lesson.

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David Einhorn of Greenlight CapitalCredit...Brendan Mcdermid/Reuters

The hedge fund mogul has always been famously aloof, stubborn about his investments, and a big fan of expensive nights out on the town. None of that bothered clients, until his firm, Greenlight Capital, hit a long rough patch.

The WSJ looks at how Greenlight, whose assets have shrunk more than half since 2014, to $5.5 billion, has drawn criticism from investors. The value of an investment in its main fund is down 11.3 percent from the end of 2014 through last year, while the S.&P. 500 was up 38.3 percent during that time.

Some investors have already left, their patience having worn thin. But others will have to wait, since they can withdraw money only once a year, after having committed for three years. For many, the only real hope is that Mr. Einhorn rediscovers his investing mojo.

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Demos ParnerosCredit...Joshua Bright for The New York Times

Barnes & Noble fired its C.E.O., Demos Parneros, for violating unspecified company policies. (NYT)

Diane Bryant, the chief operating officer of Google’s cloud unit, has left the company after less than a year. (CNBC)

Tatiana Martins, the federal prosecutor who supervised the investigation into Michael Cohen, has left the government to join the law firm Davis Polk & Wardwell. (NYT)

Deals

• Carl Icahn, an investor in Dell’s tracking stock, reportedly will not push Dell to improve its offer to buy out those shares. (WSJ)

• Tim Armstrong is said to be interested in spinning out or buying Oath, the digital media business that includes AOL and Yahoo, that is part of Verizon. (The Information)

• Uber is said to be in talks to combine its Middle Eastern operations with Careem, a rival based in Dubai. (Bloomberg)

Politics and policy

• The health insurance market created by the Affordable Care Act is thriving, despite efforts to kill it. (NYT)

• Drug makers have ignored President Trump’s call for lower medicine prices. (Politico)

• Jaguar Land Rover, Britain’s biggest carmaker, said that it may have to close British factories if there’s a hard Brexit. (FT)

Tech

• A boom in A.I. research means that Silicon Valley giants have taken their talent hunt to Cambridge, England. (NYT)

• American antitrust regulators have the ability to check some of Big Tech’s ambitions. (DealBook)

• Many tech workers are questioning government contracts at their employers. But employees at Twitter, President Trump’s favorite platform, are conspicuously silent. (NYT)

Best of the rest

• How New York State’s attorney general could make President Trump’s tax returns public. (NYT Opinion)

• Americans are quitting their jobs more often. (WSJ)

• Higher testosterone levels have been linked to a higher preference for luxury goods in men. (Verge)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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