Just as investors seemed to break through entrenched boards’ barricades, Coca-Cola owners - shockingly led by Warren Buffett - turned to jelly. A failure to challenge the transfer of vast wealth to 6,400 Coke soda jerks shows the agency problem still plagues Corporate America.
The U.S. communications watchdog will allow charges for carrying content faster but keep the internet open to all. That means data hogs like Netflix pay extra and others still get access. It’s a way to protect consumers while bowing to the need for more broadband investment.
Some of the brain trust behind the hyper-acquisition strategy is leaving the board just as the pharmaceutical company embarks on its biggest deal. Buying Allergan would swell Valeant to $75 bln with debt of eight times EBITDA. Finding meaningful targets will be much harder.
Deals for Publicis and Lafarge belie the sneers that France is closed to outsiders. If GE really wants to buy all of Alstom, it needs to be sensitive to local politics. Save some top roles for the French side. Maybe even rename the enlarged, “Paris-based” group Alstom-Electric.
Zimmer’s $13 bln deal for rival Biomet promises savings. But the medical device maker is giving too much away to its target’s private equity owners for that to justify a 15 pct, or $2.3 bln, pop in its market value. This time, enthusiastic share buyers are betting on growth.
The carmaker had a decent Q1 aside from a $1.3 bln hit from its ignition switch-related fiasco. CEO Mary Barra even managed to keep earnings in the black – just. GM can afford more recall costs. The challenge is they’ll come with other drags, perhaps including slower U.S. sales.
Shares in the Paris-based engineer jumped 14 pct on reports it has received a bid. Alstom vaguely denied the story. But mere talk about a sale to the U.S. conglomerate will embarrass the French government just as its business-friendly reforms are proving a hard sell domestically.