Pensions not steel are Tata’s big UK headache 31 Mar 2016 The Indian group’s British plants have issues, but could be rendered profitable. The bigger challenge is funding shortfalls in its pension scheme for 130,000 members. If a new acquirer could find a workaround and new investment, British steelmaking could still work.
Wanda trades places in $4 bln property buyout 31 Mar 2016 Chinese tycoon Wang Jianlin may delist his flagship property firm from Hong Kong less than 16 months after its IPO. It’s a bad time for a company exposed to China’s smaller cities to be in the public eye. Wang may nurse big plans, but minority investors have only a bit part.
Politics, not finance, is key question for Anbang 31 Mar 2016 The ambitious Chinese group could probably buy U.S. hotelier Starwood for $14 bln without breaching limits on insurers’ overseas assets. Raising the necessary funding would be doable, too. The real issue is whether Anbang can keep China’s government onside.
India cotton seed spat sows bigger trouble 31 Mar 2016 The government’s move to cap the fees Monsanto can charge for licensing its technology for genetically modified seeds looks short-sighted. It rekindles old fears about India’s cavalier attitude to intellectual property and gives big foreign firms another reason to stay away.
Sharp take-under oddly denotes Japanese success 30 Mar 2016 Foxconn has clinched control of the ailing Japanese display maker for a reduced $3.5 bln. Fixing Sharp will be a tough task for the Taiwanese giant led by Terry Gou. But this historic, if somewhat ugly and complicated deal, is Exhibit A that Japan Inc is capable of reform.
Sports turns into pricey contest for Chinese tech 30 Mar 2016 Entertainment group LeSports has raised $1.2 bln to take on giants like Alibaba and Tencent. With the tech sector flush with cash, and sports in favour politically, another costly battle for market dominance looms. Unproven business models raise the stakes further.
Tata Steel is wise to play to its home advantage 30 Mar 2016 The Indian steelmaker may sell all of its UK business. Weak local demand and a flood of cheap Chinese imports make Tata’s European arm much less attractive than its domestic operations. M&A at home may also prove more profitable than the ill-fated 2007 takeover of Corus.
British steel is sad lesson in why price wars fail 29 Mar 2016 The Port Talbot plant probably can’t survive in a world flooded with cheap Chinese steel. Yet it has hung on stubbornly long. Across markets like iron, oil and steel, the idea that price wars drive high-cost suppliers to the wall is proving more complicated than once thought.
China’s credit hose leaves many firms parched 29 Mar 2016 Though banks doled out $540 billion of new loans in January and February, companies are saving cash by delaying paying bills. Surveys show the credit drought is worst for small businesses. Extra liquidity is not reaching the parts of the economy that create the most jobs.
Starwood can easily answer the $4.64 question 28 Mar 2016 That’s how much more per share a new cash bid from China’s Anbang is worth over an agreed deal with Marriott. The $14 bln offer is 6 pct sweeter but also comes with financing and regulatory uncertainties. Given the heavy interest from rival hoteliers, Starwood can afford the risk.
Dell’s Perot sale augurs poorly for EMC deal 28 Mar 2016 The computer company is offloading its consulting arm to Japan’s NTT Data for $3 bln, a quarter less than it paid in 2009. Proceeds from what had been Dell’s biggest acquisition are to help it buy EMC for some $60 bln. The outcome, however, is hardly a good ad for its M&A nous.
Yum’s China growth goals face market reality check 24 Mar 2016 The U.S. fast-food giant may sell up to 20 pct of its Chinese unit to private investors before spinning it off. On current trends the stake could fetch $2.4 bln, Breakingviews calculations suggest. To do better, Yum’s more ambitious targets will have to survive China’s slowdown.
Myth of central bank omnipotence is hard to kill 24 Mar 2016 A few weeks ago global policymakers were supposedly out of ammo. Now a weakening dollar and recovering markets have prompted gossip they were secretly in cahoots. A better explanation is that central bankers have recognised that trying to boss investors around is futile work.
Chancellor: Lessons from the Mississippi Bubble 23 Mar 2016 This year marks the 300th anniversary of the start of John Law’s ambitious, and ultimately failed, economic experiment. Much like today’s central bankers, Law thought printing banknotes and forcing interest rates lower would solve all of France’s problems. He was so very wrong.
Gas faces a lost decade as customers dry up 23 Mar 2016 Australia’s Woodside has scrapped a costly $30 billion liquid natural gas project after struggling to find customers. A global oversupply and weakening market in Asia meant the project was no longer bankable. It could take a decade before giant LNG projects again make sense.
China’s phony bad loan fix sends wrong signal 23 Mar 2016 Regulators may let big lenders like Bank of China hold fewer provisions against dodgy credits. That will boost reported earnings but weaken balance sheets just as financial strains are growing. The willingness to bend the rules is another reason to avoid Chinese bank shares.
Online boom carries windfall to Chinese couriers 23 Mar 2016 Alibaba-backed delivery company YTO has unveiled a $2.7 bln backdoor listing in Shanghai. China’s e-commerce boom means demand for logistics has soared. Though higher wage costs are squeezing margins, growth will continue. Besides, the valuation doesn’t look excessive.
Selldown at IMAX China is off-script but smart 23 Mar 2016 The big-screen movie company faced a deluge of potential stock sales in April as a “lock-up” following last year’s flotation expired. Letting two backers pare back early, in return for committing to hold the rest of their shares for longer, is unusual but avoids a sudden selloff.
Bang & Olufsen buyout hinges on China bass boost 22 Mar 2016 The Danish electronics maker is in bid talks with Chinese luxury distributor Sparkle Roll. Both companies’ business models are under pressure. At B&O’s inflated $447 mln price it would be hard to make a deal stack up – unless sales can be massively increased in China.
Goldman’s $3 bln 1MDB bond had plenty of red flags 22 Mar 2016 Awkward details keep emerging about the bank’s lucrative bond issues for the disgraced Malaysian sovereign fund. Now it turns out Goldman wired proceeds into a private bank. That should have set off alarm bells. The saga has become even more damaging for the investment bank.