TCL#58: Cross-Border Capital in a Fragmented World

Rare Earths

-Noveon Magnetics, a Texas-based rare-earth magnet manufacturer, has secured $215 million in Series C funding. This funding aims to bolster domestic production of critical electronic components. The investment was primarily led by One Investment Management with a $200 million contribution. Noveon, founded in 2014, began delivering magnets in the last two years. The company sources its rare earths from Australia and collaborates with a European refiner for processing. It has partnered with General Motors and LG Electronics for recycling and manufacturing initiatives. Currently, the annual production is over 2,000 tons, intending to meet about 5% of U.S. demand.

-The US government is investing $1.6 billion in USA Rare Earth. This investment would grant the US government a 10% stake in the company. USA Rare Earth is developing a major mine in Sierra Blanca, Texas, containing 15 of the 17 rare earth elements crucial for modern technology. The company also plans to establish a magnet production facility in Stillwater, Oklahoma.

Oil & Gas

-TotalEnergies reported a nearly 5% increase in fourth-quarter oil and gas production compared to the previous year. Full-year 2025 production rose by close to 4%, exceeding the company's guidance of over 3%. Energy companies are facing a challenging outlook due to weakening prices. The average Brent crude price for TotalEnergies decreased to $63.7 a barrel from $69.1 a barrel in the third quarter. Despite falling oil prices, the company saw an increase in refining margins from $63 a ton to $85.7 a ton, which helped to mitigate the financial impact. Liquefied natural gas (LNG) production was boosted by the completion of maintenance at the Ichthys plant in Australia. The company has unveiled a dual strategy of increasing oil and gas production while investing significantly in electricity generation.

-Mitsubishi Corporation, the Japanese trading house, is acquiring Aethon's shale gas assets in Texas and Louisiana for $5.2 billion, marking its largest acquisition to date. The acquired natural gas is currently sold in the Southern US market. Mitsubishi is exploring exporting LNG from this production to Asia and Europe. Aethon's shale gas assets produce approximately 2.1 billion cubic feet of natural gas daily which is equivalent to about 15 million tons of LNG annually.

Fusion Energy

General Fusion, a Canadian fusion energy company, is set to go public in the US through a SPAC deal valued at approximately $1 billion with Spring Valley Acquisition Corp. III. (SVAC). This move comes after the company struggled to raise funds last year, and received a $22 million lifeline investment. The capital raised will be used to complete its demonstration reactor, Lawson Machine 26 (LM26). LM26 utilizes a magnetized target fusion approach, compressing plasma with steam-driven pistons and liquid lithium, aiming to avoid the high costs of lasers or superconducting magnets. The company plans to construct its first-of-a-kind power plant by the mid-2030s.

Semiconductors

Micron Technology plans to acquire a Taiwanese chip-making facility from Powerchip Semiconductor Manufacturing Corp. (PSMC) for $1.8 billion. The deal is expected to be finalized in the second quarter, subject to regulatory approvals. The acquisition includes the plant located in Miaoli County, Taiwan, and includes a 300,000 square foot cleanroom. The facility will be equipped to produce DRAM chips, with output expected in the second half of 2027.

Pharma

-GSK has entered into an agreement to acquire RAPT Therapeutics, a clinical-stage biopharmaceutical company in South San Francisco, for approximately $2.2 billion. This acquisition aims to strengthen GSK's allergy and immunology pipeline, particularly with RAPT's experimental drug, ozureprubart, which is being developed to treat food allergies. The clinical trial data for ozureprubart is expected in 2027. The acquisition is anticipated to be finalized in the first quarter of 2026.

-Johnson & Johnson reported its fourth quarter and full year 2025 results, with increased revenue and profit for the latest quarter, driven by higher sales of cancer and autoimmune drugs. This growth offset the sales decline from the loss of patent protection for the drug Stelara. J&J's net earnings rose 20.8% in the fourth quarter to $5.12 billion from a year earlier. Sales of Darzalex, a multiple myeloma treatment, increased by nearly 27%, whereas sales of autoimmune drug Tremfya increased by around 68%. Despite a recent deal with the current US administration to cut drug prices, which will cost J&J hundreds of millions in annual sales, J&J forecasts sales growth of over 6% for 2026.