Is Abu Dhabi’s deal machine sputtering?

One scoop to start: CVC is stepping up succession planning ahead of its next big fundraising, with the private equity group’s dealmaker Peter Rutland emerging as a frontrunner to eventually replace chief executive Rob Lucas.

And a big event: There’s less than a month to go until the FT’s private capital summit, where we’ll be joined by Ares co-president Blair Jacobson, Wayve CEO Alex Kendall, Helsing co-founder Gundbert Scherf and CDPQ managing director Sharon White. The event is invite-only, but DD readers can apply to attend here.

In today’s newsletter:

• Adnoc’s M&A entanglements

• Nestlé chair ousts CEO then resigns

Adnoc struggles to bag its mega-deal

Abu Dhabi’s state oil company Adnoc made waves a couple of years back when it assembled an A-team of dealmakers and announced plans to pursue $50bn in M&A. Yet its latest big setback raises questions over its ability to deliver the goods.

On Wednesday, Adnoc abandoned a $19bn bid for Australian energy group Santos, adding to a string of highly publicised takeover attempts that have hit brick walls or got stuck in quagmire.

The bid was announced in June with great fanfare and it would have been the largest takeover of an Australian company — a big win for XRG, the overseas investment arm of Adnoc.

But after a tortuous lobbying campaign by XRG and domestic backlash over an Australian company moving into foreign ownership, Adnoc walked away.

Recriminations have started flying.

One person close to the process denied politics had been a problem. Instead, they said Santos had insisted XRG and its partners, including Carlyle, should pay any capital gains tax arising from the deal.

They added that Santos hadn’t told XRG about a long-running methane leak at a liquefied natural gas plant, meaning the consortium of buyers “found out through the media”.

Yet a look at XRG’s own record does leave you wondering whether the group’s dealmaking efforts are living up to their billing.

On paper, XRG has a stellar crew: its investment team is headed up by Klaus Froehlich, previously head of Middle East investment banking at Morgan Stanley. Its board is stacked with big names: Blackstone president Jon Gray, Egyptian fertiliser magnate Nassef Sawiris and ex-BP boss Bernard Looney.

The project is part of a plan by Adnoc chief executive Sultan al-Jaber to transform what was once a traditional Gulf state oil and gas producer into a global plastics and energy giant.

One banker, speaking when XRG launched in 2023, described the group as “supercharged”.

But aside from the large sums it’s spending, XRG has been notable to date for the length of time it’s taken to close deals.

Take its agreement to create a $60bn plastics company by merging Adnoc’s petrochemical assets with those of Austria’s OMV, which was sealed in March. News of talks first emerged in July 2023, nearly two years earlier.

Similarly, Adnoc agreed a €15bn takeover of German chemicals group Covestro in December last year, but it’s only now near closing the deal, following an EU probe. Again, it first started deal talks in 2023.

XRG had been looking at Australia’s Santos for more than a year, yet its due diligence process failed to bring up the methane leak and other roadblocks.

Advisers can’t be expected to see around corners, but so far there’s been a pattern of eye-catching numbers being thrown around followed by lengthy delays.

Dr Sultan, as he is called, won’t be pleased.

Nestlé’s boardroom turmoil

Nestlé chair Paul Bulcke fired his chief executive Laurent Freixe at the start of September. Now he’s fallen on his own sword.

On Tuesday Nestlé said Bulcke was stepping down, just weeks after he dismissed Freixe for failing to disclose a romantic relationship with a subordinate.

With Freixe gone, the spotlight was on Bulcke, a Belgian who joined the consumer goods group nearly five decades ago.

Investors questioned his handling of an investigation into Freixe’s affair, as well as his sacking of two chief executives in just over a year. Speaking to the FT’s Madeleine Speed last week, they called for him to step down.

Freixe was investigated after complaints were raised through the company’s whistleblowing channel alleging favouritism by the then-chief. An initial internal investigation found no wrongdoing. A second investigation, this time with external counsel, uncovered conflicts of interest.

J Stern’s Christopher Rossbach told the FT last week that it was “deeply concerning” that it took a second investigation to uncover the affair. Executives at the company have characterised Freixe’s fling as an “open secret”.

“If it turns out that the chair knew more than he admitted, it will become clear that the company is suffering from weak governance and poor oversight,” said Kai Lehmann, an analyst at Nestlé shareholder Flossbach von Storch.

Bulcke, who was due to step down from the board in April, will be replaced by Pablo Isla, Nestlé’s lead independent director, next month.

Isla was previously CEO and chair of Spanish fast fashion behemoth Inditex and he’s been a member of Nestlé’s board since 2018.

Freixe’s replacement as Nestlé’s CEO is Philipp Navratil, previously head of the company’s Nespresso business.

With fresh faces steering the ship, investors are hopeful of a revival of Nestlé’s fortunes. Its share price has been steadily sliding, down 40 per cent since 2022, and underperforming peers.

As for Bulcke, he’s not quite disappeared from view: he’ll stay on at Nestlé as honorary chair.

Job moves

• Gucci has named Francesca Bellettini as its fourth chief executive in two years. Stefano Cantino will leave the company after less than a year in the role.

• Ben & Jerry’s co-founder Jerry Greenfield has quit the ice cream brand after parent company Unilever put a stop to its social activism.

• Warburg Pincus has appointed ex-EY UK chair Steve Varley as a senior adviser.

• Corinthia Global Management has hired Craig Shirey as a managing director in New York. He was previously a partner at Ares Management.

• Cooley has named Sean Brownridge as chair of its activism defence practice. He joins from Schulte.

Smart reads

PE’s reckoning DD’s Antoine Gara went on the Unhedged podcast to discuss private equity’s deal pipeline problems and the novel solutions the industry has found to solve them. Listen in.

Secret plans The wealthy residents of a once-opulent New York hotel claim US commerce secretary Howard Lutnick was part of a plot to sell off the building, The New York Times reports.

Token mania Charlie Kirk’s death last week prompted an outpouring of grief among conservatives. For some crypto bros, it was a chance to make new memecoins, Bloomberg writes.

News round-up

China bans tech companies from buying Nvidia’s AI chips (FT)

SEC allows public companies to block investors from class-action lawsuits (FT)

Novo Nordisk’s new boss wins cautious backing after sweeping cuts (FT)

Deutsche Bank’s asset manager kicks off sale of data centre business (FT)

US tech groups answer Starmer’s call for AI infrastructure spending (FT)

RedBird IMI scraps plans for ITV Studios bid (FT)

Security company Verisure plans to raise €3.1bn in Swedish IPO (FT)

Qatar sovereign fund invests $500mn in Canada’s Ivanhoe Mines (FT)

Democrats hit out at plan to curb investor lawsuits against US companies (FT)

China lifts exit ban on Wells Fargo banker (FT)