Baxter’s $4 bln deal is curious deja vu 4 Dec 2012 The U.S. drugs company is buying dialysis specialist Gambro. Strategically and financially the Swedish target looks a decent fit, for instance soaking up some offshore cash. But Baxter largely exited the segment in 2005, and its record of errors ups the risk of getting back in.
Boris Johnson intervention reduces Brexit chances 4 Dec 2012 London’s mayor says he will campaign to keep Britain in the EU provided it can negotiate a pared-down relationship based on the single market. Although Johnson is overestimating the UK’s negotiating strength, he is one of the few people who could sell Europe to sceptical Britons.
IMF yields to reality on capital controls 4 Dec 2012 The traditional defender of liberal economics has endorsed some limits on cross-border money flows. That makes sense. In theory, total capital freedom is desirable. But in the unbalanced real world, it looks less a source of prosperity and more like a recipe for disruption.
Juncker won’t be missed as head of Eurogroup 4 Dec 2012 The departing head of the euro zone’s group of finance ministers rarely played an active role in the defence of the stricken currency. But institutional shortcomings account for most of his weakness. It’s no wonder that few people are rushing to succeed him.
Pharma lands one-two punch on government finances 4 Dec 2012 A U.S. court has ruled a drug salesman was exercising his right to free speech by promoting a drug for non-approved uses. That’s worrying. And if upheld by the Supreme Court, companies will pay fewer multi-billion dollar fines and useless healthcare spending will increase.
Olam’s “Get Shorty” gambit is short-term fix 4 Dec 2012 The commodities trader’s $1.2 bln bond-and-share issue, underwritten by major investor Temasek, eases funding concerns and squeezes short-sellers like critic Muddy Waters. But twisting shareholders’ arms to take part does little to ease the broader concerns about Olam’s business.
Abramovich peace mission rewards all at Norilsk 4 Dec 2012 The oligarch is to buy 7.3 pct of the Russian nickel miner. The deal resolves a spat between shareholders Interros and Oleg Derispaka by giving the former management say and the latter dividend security. But Abramovich won’t have broked peace for nothing.
ThyssenKrupp boxed in by dilapidated governance 4 Dec 2012 The steelmaker has survived an orgy of mismanagement that would have annihilated most companies. New management is trying hard to turn things around. Unfortunately, its room to manoeuvre is limited by a controlling foundation, which has too much power and not enough sense.
SEC learns true cost of China accounting goodwill 4 Dec 2012 The U.S. regulator’s attack on China’s uncooperative auditors is fair, but enforcing it could lead to a chaotic wave of de-listings from American markets. The time to protest about China’s heavy-handed state meddling was a decade ago. Now the cost of doing so is high.
Wall Street deal-making has lesson for Washington 3 Dec 2012 U.S. budget talks have become the equivalent of an ugly merger proxy battle, with leaks and messaging trumping substance. While investment bankers are often too eager to push for a deal, they also know one important thing: negotiating in public usually only makes things harder.
Greek banking governance is a gamble 3 Dec 2012 The euro zone and IMF are putting nearly 50 billion euros into the country’s banks. But they don’t want to take control of the lenders themselves or let Greek politicians meddle in the industry. So they’ve concocted a scheme which may leave too much power with existing owners.
Logic won’t topple London from euro perch 3 Dec 2012 The French central bank governor wants euro trading to be done in the euro zone, not in offshore London. The argument is sound. But Christian Noyer should know that finance doesn’t work that way. After all, he is pushing Paris as an offshore currency market - and good luck to him.
UK bank steroids are working for the wrong reason 3 Dec 2012 Net lending by domestic banks rose only a bit in Q3. That’s a disappointment given the Bank of England is offering super-cheap funding to boost lending to the real economy. But the central bank support is probably having a benign side-effect - the softening of painful deleveraging.
Mexico’s new president cools energy reform hopes 3 Dec 2012 A day after taking office Enrique Peña Nieto signed a pact with three political parties, committing them to reforms. That’s good, but the deal limits liberalization of the energy sector. Pemex asset sales, for example, are off the table. The needed overhaul looks a long way off.
SandRidge CEO sets bar even lower for oil patch 3 Dec 2012 Tom Ward isn’t the first energy boss to live large at shareholders’ expense. But his record at $3 bln SandRidge would make TV’s J.R. Ewing blush. Aside from lavish pay since the company went public, the CEO has upgraded to a fleet of jets. Angry owners are right to want him out.
Hugo Dixon: Bersani may not be bad for Italy 3 Dec 2012 Investors want Mario Monti to stay as PM after the election, which will probably be in March. But they are more likely to get Pier Luigi Bersani, leader of the left-wing Democratic Party. There are risks, but such an outcome may not be as bad as it looks.
UK bank capital probe puts heat on RBS 3 Dec 2012 The Bank of England has publicly questioned whether domestic lenders are adequately provisioned against future losses. Making definitive judgments about who this affects isn’t easy. But RBS’s 66 bln pound commercial property book is one place to start asking questions.
CWC extracts royal premium from Batelco 3 Dec 2012 Bahrain’s top telco will pay $1 bln, or roughly one third more than the market expected, for the UK firm’s Monaco and Island unit. The deal will transform both buyer and seller but the rich price stretches the business logic for Batelco’s big international leap.