Italy wants to have its panettone and eat it too. The Pirelli family sold a controlling stake in the eponymous company to China’s Sinochem in 2015, but now PM Giorgia Meloni is stripping Sinochem of many of the rights that typically come with ownership, such as choosing a CEO and setting strategy. Lawyers in Beijing are still reviewing the decision but don’t be surprised if Sinochem tirami-sue.

The lowdown

• 🛞 The Italian government strips China’s Sinochem of its influence over Pirelli despite its controlling stake.

• 🏦 SVB agrees to sell its investment banking division.

• 💊 AstraZeneca to split off its China business due to geopolitical tensions.

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Wage-price spiral

The wage-price spiral is an economic theory describing a vicious cycle caused by a change in either wages or prices, which leads to a corresponding change in the other. Here's how it works:

• To begin, let's say workers demand higher wages due to increasing cost of living or a strong labor market.

• In response, employers decide to meet these demands for increased wages.

• To maintain profit margins, employers increase the prices of the goods or services they offer.

• This leads to an overall increase in the cost of living, effectively causing inflation.

• The inflation causes workers to demand higher wages again, leading back to step 1.

• This creates a cycle where wage increases lead to price increases, which in turn lead to more wage increases, hence the term "wage-price spiral".

Is this what is happening now and are we doomed? ($).

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HarperCollins emerges as bidder for book publisher Simon & Schuster

Book publisher Simon & Schuster attempted to merge with Penguin Random House in a deal worth $2.18 billion in November 2020 but was ultimately blocked ($) by a US court ruling. Less than three years later, Simon & Schuster are again looking to sell.

HarperCollins has emerged as a bidder ($). In the US market for print books, Penguin holds 21%, HarperCollins holds 11% and Simon & Schuster holds 6%. It is therefore possible that antitrust regulators could see the merger in a positive light in this case given it would not concentrate more power in the industry leader.

PE firm KKR is also in the running. Presumably the firm will be hoping that regulators see further consolidation in the publishing industry as a con which would improve the likelihood of a KKR bid succeeding.

The content we're consuming today

• FT: Junior auditors: give them a pay rise ($).

• Odd Lots podcast: Steve Eisman on Banks, AI and His Next Big Bet.

• The Economist: Is the global housing slump over? ($).

Off-balance sheet items

• Black Mirror has returned to Netflix (aka “Streamberry”) for a sixth season. Here is the nightmarish trailer.

The bottom line