Astra’s $4.1 bln divorce from BMS JV looks happy 19 Dec 2013 The pharma group is taking full control of its diabetes venture with Bristol-Myers Squibb. It’s a logical and fairly priced move enabling each firm to focus on core strategies. The assets may not be great, but Astra’s fightback against its fundamental challenges is gaining ground.
Translation tech will put a new accent on growth 19 Dec 2013 The mythical “universal speech translator” is close to being realised. Even if a truly perfect device remains years away, anything that erodes language barriers could boost global trade, tourism and investment. One day, watch out for wearable devices that also read body language.
Obama chooses economics over China diplomacy 19 Dec 2013 New Beijing ambassador Max Baucus has little international experience, and is at the end of his career. Economically, he’s a sound choice, and has been vocal on China’s undervalued currency. But in terms of optics, Japan, with rock-star diplomat Caroline Kennedy, looks favoured.
Fed finally lets data guide policy 18 Dec 2013 With U.S. unemployment down to 7 pct – a previously floated trigger – and other data solid, the central bank at last knocked $10 bln off its monthly bond purchases. This limits the Fed’s balance sheet and sets it on a course for normality – as long as it remains committed.
Can General Electric keep the activists at bay? 18 Dec 2013 If the gates at Apple, Microsoft and P&G can be rattled, complacency just isn’t an option for a $270 bln conglomerate. While GE’s strategy looks more coherent than ever, it still has soft targets for uppity investors: its finance arm and long-standing leader Jeff Immelt.
JPMorgan hits U.S. back in its weak spot 18 Dec 2013 There’s a lot of bluster in the bank’s $1 bln-plus lawsuit against the FDIC’s WaMu receivership. But JPMorgan has a good case that the watchdog has engaged in some Scrooge-like antics. And if anyone needs a morale-boosting victory, it’s Chief Executive Jamie Dimon.
Ford slows down into the middle lane 18 Dec 2013 The Detroit automaker’s profit warning sent the stock down 7 pct. The reasons make sense – expensive new U.S. product launches and economic weakness in Europe and Latin America. But the timing is odd. Ford is still looking strong, but it takes a bit of shine off CEO Alan Mulally.
100 years of Fed competence led to cursed workload 17 Dec 2013 After humble beginnings, lawmakers heaped more and more responsibility on the U.S. central bank. Though it hasn’t always been perfect, its increasing power came from screwing up least. But some worry those many mandates may become too much to manage – if they aren’t already.
Boeing needs to push hard to keep defying gravity 17 Dec 2013 A big dividend hike and fresh buybacks show the jet maker in high spirits after its shares nearly doubled this year. Investors should keep their feet on the ground. Despite strong deliveries, aerospace remains a cyclical business. And there are structural clouds on the horizon.
Australia nudges dairy saga toward a finish 17 Dec 2013 Saputo has raised its offer for cheesemaker Warrnambool to A$537 million, at a regulator’s prompting. It could prove higher than a rival bid by Murray Goulburn, and looks more deliverable. Barring a knockout counterbid, investors would do well to take Saputo’s cash.
Globalisation’s demise is greatly exaggerated 17 Dec 2013 Sceptics warn an iron law of economics has been broken. A long-standing link between global GDP growth and world trade appears to have weakened since the 2008 crisis. But a closer look shows the recession that followed can explain most of the trade slowdown.
KKR spends $2.6 bln on high-yield savings account 17 Dec 2013 The private equity firm is buying KKR Financial, its separately listed, mostly credit-oriented investment fund. The deal will boost cash flow and dividends. But it also brings KKR ready-made capital that will earn a far better return than on money parked in a bank.
Shale energy deficit will hit Europe hard 17 Dec 2013 American companies have a big advantage over European counterparts: abundant, cheap gas. Fracking is more difficult in Europe and requires a step-change in public perception. Cheaper energy could provide the old continent with the fillip it needs. But it’s a pipedream.
McClendon IPO plan is echo of bad old Chesapeake 16 Dec 2013 He lost his job as CEO of the energy firm over spending and conflicts. A new $2 bln venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite McClendon’s knack for buying oil and gas properties, investor skepticism is in order.
Fed needs 100-year inspection and tune-up 16 Dec 2013 A U.S. federal commission led to the central bank’s creation in 1913. Its structure and mandate have evolved, and since 2008 novel activities have enlarged its balance sheet to $4 trln. A fresh commission reviewing the past century and the Fed mandate would renew its legitimacy.
AIG settles for connecting flights to exit ILFC 16 Dec 2013 The insurer is getting $5.4 bln for its aircraft-leasing arm - just 75 pct of book value. AIG gets two-fifths of the price in rival AerCap’s stock, and is providing a $1 bln line of credit. CEO Bob Benmosche hasn’t found the cleanest deal, but it is a glide path to independence.
Silver Lake takes a second juicy bite of Avago 16 Dec 2013 The U.S. private equity firm quintupled its money on the initial carve-out of the chip company from HP. Now it’s back, underwriting Avago’s $6.6 bln purchase of rival LSI. The market’s warm embrace of the deal means Silver Lake’s $1 bln convertible loan is already in the money.
U.S. and China will set global growth pace in 2014 16 Dec 2013 America produces a quarter of world GDP, China less than a tenth. But between them they will generate almost half the growth in global output next year. With Europe in the doldrums, Japan recovering and emerging markets subdued, the planet heavily depends on its twin engines.
Coca-Cola shakeup should help it preserve the fizz 13 Dec 2013 A reorganization of the $175 bln beverage giant’s North America unit could herald a separation of the bottling business it bought in 2010. Cost-cutting may be on tap, too. That would keep investors sweet on Coke as rival Pepsi nurses strategic plans and contends with an activist.
Animal health carve-ups to come two by two 13 Dec 2013 The business is pharma’s secret cash cow: R&D costs are lower, scrutiny’s gentler and growth faster than human care. Shareholder pressure is forcing firms from Novartis to Merck to explore sales, JVs or IPOs. The risk of seller’s remorse means buyers may have to pay top dollar.