Eugene Scalia: Big Law’s new superstar #NewsMarket

Some consulting bribes to start: BCG has admitted it paid millions of dollars in bribes to win business in Angola, and agreed to give up more than $14mn in profits from contracts it won with the country’s economy ministry and central bank.

And hotly watched earnings results: Nvidia’s revenue more than doubled in the past quarter, continuing the US chipmaker’s run of blockbuster growth and surpassing consensus estimates. The stock fell as much as 8 per cent in after-market trading in New York despite the strong results.

In today’s newsletter:

• Corporate America’s new favourite lawyer

• Berkshire Hathaway tops $1tn

• 7-Eleven weighs how to block a hostile takeover

Scalia redux: The new heavyweight in Big Law

There are a lot of policies that blue-chip US companies are keen to fight nowadays.

The Biden administration has worked relentlessly to beef up regulations and curb what it sees as over-reach by corporate America. That was crystallised into the proposed non-compete ban and the Securities and Exchange Commission’s private funds rule and climate disclosure regulations.

That’s where Eugene Scalia comes in. The Gibson Dunn lawyer is having a moment defending the US’s biggest industry groups and companies at a time when the government has tried to increase oversight.

It’s not a coincidence, either. He’s the second child of late Supreme Court Justice Antonin Scaliaand has in turn taken up his father’s intellectual mantle as a critic of powerful government agencies.

He took his father’s legal ethos and ran with it — building a lucrative legal practice around the philosophy.

Some of his biggest clients include Walmart, Boeing, MetLife and a suite of powerful business groups including the US Chamber of Commercethe Managed Funds Association and the Business Roundtable.

To SEC chair Gary Gensler and US Federal Trade Commission head Lina Khan’s consternation, Scalia’s been on a winning streak.

He’s taken advantage of pro-business judges, successfully filing challenges to the private funds rule and non-compete ban.

And Scalia’s also leaned into the fact that he knows the inner-workings of the federal government. He’s had two stints at the labour department — most recently as secretary under Donald Trump.

While clients sing his praises — describing him as a “phenomenal counsellor” and a “really nice guy” — his aggressive tactics defending some of the country’s most powerful have also made him a fair share of enemies.

“Scalia is going to make $1bn from representing industries,” said a Washington lawyer at a rival white-shoe law firm. “It’s oil and gas, tobacco, it’s alcohol, firearms . . . Everyone is looking for a lawyer to fight against the government.”

Berkshire Hathaway joins the $1tn club

Warren Buffett told a documentary crew in 2017 that his daily breakfast order at McDonald’s often came down to just how prosperous he was feeling.

If markets were up and his portfolio was doing well, he might opt for a bacon, egg and cheese sandwich. At $3.17, it was his most expensive option. Tomorrow, if Buffett rolls up to the Golden Arches, DD suspects he will be splurging.

His sprawling conglomerate Berkshire Hathaway became the first publicly traded US company outside of the tech sector to be valued above $1tn, joining a club that has long been dominated by the likes of Amazon and Microsoft.

Investors have sent Berkshire’s shares up nearly 30 per cent this year, buying in even as Buffett himself has opted to shed his stock holdings, including half of his stake in Apple. That has pushed the group’s cash pile to a record $277bn. Buffett this year said he preferred the yield on short-term Treasuries than what he could find in stocks.

Buffett has transformed the conglomerate over the past six decades into a financial force that brushes up against nearly every corner of the US economy.

The business now not only includes a $285bn stock portfolio, but Duracell batteries, the Geico insurer, ice cream purveyor Dairy Queen and paint maker Benjamin Moorealong with dozens of other companies.

Berkshire’s valuation has made serious gains just this year, with its market cap climbing by more than $200bn. Since 1965, when Buffett took over the company, he has followed a remarkably similar strategy.

“The first [rule] is don’t lose money,” said Jeff Muscatelloa research analyst at Berkshire investor Douglass Winthrop. “The second is don’t forget rule number one and let the laws of compounding work over an incredibly long period of time.

7-Eleven’s owner scrambles to protect itself

In Japan, the convenience store chain 7-Eleven is beloved. Populated on nearly every corner of the country’s cities, it can even feel like a necessity.

So it might not come as a surprise that its Japanese owner, Seven & i Holdingsis considering ways to protect itself from a foreign bidder after Canadian group Food Late Night made an unsolicited offer for the company earlier this month.

But while 7-Eleven is a hallmark of Japanese life, the protected status would involve applying for the same status as companies in the nuclear and semiconductor sectors — not quite the same as a retailer where you buy Kirin beer or Meiji treats.

The tactic would involve changing the government’s designation of the group to “core” from “non-core” status under Japan’s Foreign Exchange and Foreign Trade Act. Two people close to the discussions said it was just one of several options being discussed.

It’s a high bar. 7-Eleven would have to convince the government that its stores were critical infrastructure in the case of a natural disaster — and that it would be impeded in some way by foreign ownership.

Seven & i has put together a special committee to examine the offer, which if successful, would be the biggest Japanese takeover by a foreign buyer. Seven & i has a market capitalisation of more than $38bn.

If 7-Eleven is able to convince the government to upgrade its status to “core”, Couche-Tard — or any potential foreign buyer — would face an additional hurdle of having to be vetted by the finance ministry.

Job moves

• Barclays has hired Martin Douglass as the head of financial sponsors M&A in New York. He most recently worked at Morgan Stanley as a managing director for M&A.

• Goldman Sachs has hired Tyler Miller as a partner in natural resources investment banking and global co-head of power, utilities and infrastructure, according to an internal memo. He most recently worked for Citigroup in a similar role.

Smart reads

Spending spree Tether is on a dealmaking binge. But the German investor who’s helping to facilitate its investments has had mixed results, The Wall Street Journal reveals.

Copper hunt After failing to acquire Anglo American, the mining giant BHP has been on the hunt to build up its copper exposure. That’s proving tricky, Lex writes.

Call centre capital While the world frets about when AI will start to replace white-collar jobs, the Philippines’ outsourcing sector is already enduring this new reality, Bloomberg reports.

News round-up

Goldman Sachs wins cut to capital requirements in stress test challenge (FT)

Two Sigma founders step down as co-CEOs after years of acrimony (FT)

Telegram CEO charged in France over alleged criminal activity on messaging app (FT)

EU investigating Telegram over user numbers (FT)

Thames Water hits back at regulator with call for further bill rise (FT)

Indian watchdog approves $8.5bn Disney-Reliance entertainment merger (FT)

Super Micro slides on 10-K delay following Hindenburg report (Bloomberg)

‘Obscenely greedy’ oil executives handed Swiss jail terms for role in 1MDB fraud (FT)

City whistleblower sacked after raising China spy concerns wins £560,000 (FT)