French M&A: a guide for foreign buyers 24 Apr 2014 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.
GE/Alstom deal rumours test French reform drive 24 Apr 2014 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.
AstraZeneca can avoid self-medicating with M&A 24 Apr 2014 Reported interest from Pfizer puts pressure on Astra CEO Pascal Soriot. He could bulk up by buying a rival like Actelion or Shire. Or he could find a merger partner. But as Q1 results show, Astra is refilling its pipeline and investors recognise this. Plan A is working.
Apple needs more iPhone, less iCahn 23 Apr 2014 Once again, financial developments overshadowed technological ones in the tech giant’s Q2 results. A stock split, a dividend hike and a bigger buyback provoked a pop in the shares. Rather than Carl Icahn’s favorite subjects, CEO Tim Cook could use new products to talk about.
Buffett loses his voice – and maybe some sway 23 Apr 2014 The Omaha billionaire said he didn’t vote against Coca-Cola’s controversial pay plan even though he disagreed with it, for fear of sending a wrong signal about the CEO. That’s an odd message to convey. It doesn’t mean Coke shouldn’t hear what its largest owner is saying, though.
Valeant will need even more fancy legal footwork 23 Apr 2014 The pharmaceuticals company and hedge fund boss Bill Ackman built their Allergan stake by deftly tiptoeing around disclosure and insider trading rules. But a poison pill, antitrust issues and other pitfalls remain for the many law firms in the deal to navigate.
Apple and Google spats threaten the silicon goose 23 Apr 2014 America’s high-tech epicenter thrives on shared ideas and expertise. The smartphone rivals stifle both by squabbling over patents and poached workers. Silicon Valley shows no signs of slowing down, but the behemoths’ penchant for protecting their empires could inhibit innovation.
Gold miners ominously prospect for M&A treasure 23 Apr 2014 The Newmont and Barrick talks came amid a bidding war for the Canadian Osisko. That’s one deal short of a trend. A 30 pct drop in the bullion price means those with higher-valued shares may spy a chance to nab production on the cheap. The logic behind such digging has holes.
Edward Hadas: Inheritance can be less unequal 23 Apr 2014 Family is a big part of destiny, even when opportunities are supposed to be equal. Since children tend to take after their parents, the elite tend to be self-perpetuating, and poor kids will tend to become poor adults. Still, there are ways to soften the injustices of birth.
Coca-Cola deserves protest vote one way or another 22 Apr 2014 Several shareholders object to the $180 bln drinks giant’s equity pay plan. Some want the chairman and CEO jobs split. Nearly a quarter dissed top executives’ comp last year. With the stock underperforming, it’s no wonder investors are grouchy ahead of Wednesday’s annual meeting.
Regulatory dithering can cost the economy dearly 22 Apr 2014 The U.S. government’s continued deferral on the Keystone pipeline decision is a case in point. One year’s economic benefit from the project may be $1.8 bln; if the answer is no, the energy system can be optimized another way. Win or lose, regulators need to make up their minds.
Texas cracker spat hides Petrobras waste at home 22 Apr 2014 The state-run energy giant paid too much in buying a U.S. refinery for $1.2 bln in 2006, when President Rousseff chaired the board. But at $20 bln, a plant in Brazil is costing far more than similar facilities abroad. It’s a cash drain Petrobras and its investors can ill afford.
Fed and gridlock to thank for U.S. deficit decline 22 Apr 2014 Since five years ago, the expected ratio of government debt to GDP in 2019 has fallen from 81.7 pct to 72.5 pct. That’s a handy reduction. The Fed’s low interest rates have made a difference. But politicians can’t take much credit, having mainly just thwarted each other’s plans.
Car mega-recalls put economies of scale to test 22 Apr 2014 GM, Toyota and VW recently found problems in 16 mln cars between them. Industry recalls are rising thanks to shorter development times and more sharing of parts and production across models. The financial benefits outweigh the risks – as long as carmakers pounce on errors early.
Valeant can boost its $47 bln bid for Allergan 22 Apr 2014 The pharma M&A machine, working with hedgie Bill Ackman, thinks it can cut $2.7 bln of costs from the Botox maker. At Valeant’s single-digit tax rate, that’s worth nearly $25 bln. And that’s just the start of potential benefits. The deal would add up with a much bigger premium.
GSK and Novartis treat each other’s problems 22 Apr 2014 The pharma giants are swapping assets worth up to $23 bln and merging others to focus on their respective strengths. Investors are cheering synergies, capital discipline and strategic focus. It’s a way to transform both businesses while avoiding the perils of a mega-merger.
Manchester United’s crisis has silver lining 22 Apr 2014 The English soccer club fired David Moyes, hapless successor to star manager Alex Ferguson, after one awful season. But the drama has an upside. Turmoil at the top of the game sustains fan and sponsor interest. As one of football’s biggest brands, United should benefit.
Dawn raid makes comeback via activist drone strike 22 Apr 2014 Agitators usually take a stake in a company and then try to make something happen. Bill Ackman has instead teamed up with Valeant Pharmaceuticals to grab a 9.7 pct interest in $40 bln-plus Allergan, with a hostile takeover ready for deployment. It’s a potent battlefield tactic.
Pfizer stock poses best argument against mega-deal 21 Apr 2014 Sure, buying $84 bln AstraZeneca would yield tons of savings, and put cash trapped overseas to work. But big pharma deals often create more harm than good. Pfizer’s deal binge last decade led to poor investment returns. Subsequent slimming down has caused it to nearly double.
Barrick’s empire building deserves skeptical eye 21 Apr 2014 The Canadian giant is reportedly considering a $33 bln deal with Newmont. Barrick’s outgoing chairman said “hubris” drove past deals. Ex-Goldmanite John Thornton, who takes the chair next month, faces a big hurdle in convincing shareholders this won’t be another value-destroyer.