Australia

Copper caught in crossfire of trade war

4 October 2018

Escalating tensions between Washington and Beijing have helped drag down the red metal by some 14 pct since June. The price is now well below levels required to inspire mining giants to invest in new supply, even though existing pits are ageing fast and green demand is on a tear.

BHP can hide behind Unilever dual-listing mutiny

2 October 2018

Some big shareholders oppose the Dove soap maker’s plan to switch to one, Dutch, headquarters. Pushy investor Elliott has been calling for a similar corporate overhaul at the world’s largest miner. There are differences, but the campaign for simplicity just got more complicated.

Barrick and Randgold wisely explore M&A riches

24 September 2018

The $12 bln Canadian miner led by former Goldman banker John Thornton is set to unite with its African-focused rival. A deal this big would shake up a sector long cowed by past mistakes. Given weaker prices, falling output and a geographic fit between the two, the idea has logic.

Aussie office bid war offers easy investor exit

19 September 2018

U.S. private equity giant Blackstone is fighting with a Canadian pension fund over $3 bln of Australian commercial property. The market has boomed but Investa, the target, has underperformed of late. The ensuing rally gives shareholders a chance to relocate at a nice premium.

Australia’s $11 bln telco deal dials up high hopes

30 August 2018

TPG Telecom and the Vodafone Hutchison joint venture are coming together. The merger reduces chances of a price war and the market is implying hefty synergies can be achieved. It should ease Vodafone’s exit and even rival Telstra may come out ahead.

Australian politicians play with economic fire

24 August 2018

Malcolm Turnbull has been forced out, ushering in the country's sixth prime minister in a decade. Political turmoil contrasts with 27 years of unbroken growth. But reforms are hard to implement and voters are disgruntled. The economy’s immunity to upheaval in Canberra is waning.

Australia’s Huawei ban undercuts “Made in China”

23 August 2018

Security and political concerns prompted Canberra to block the telecom titan from backing the country’s 5G network. It’s a setback for Huawei, but also for Beijing. The world-beating national champions it wants to cultivate are increasingly seen as dangerous arms of the state.

Santos doubles down on independence with Quadrant

23 August 2018

Fresh from rejecting a $10.8 bln takeover bid, the Australian energy group is buying its Perth peer for $2.2 bln. The move tests a newly healed balance sheet, but investors value Santos equally as predator and prey. It’s a big bet on Quadrant’s new discoveries and the oil price.

Australian telco M&A logic trumps messy governance

22 August 2018

Vodafone and Hutchison’s mobile joint venture may combine with the A$7 bln TPG. Mergers of equals are hard enough without three parties, and the embattled broadband group looks like an unequal match. The benefits of less competition mean both sides have reason to hold their nose.

Healthscope’s property trick is takeover poison

22 August 2018

Having rejected two acquisition bids, the struggling Australian health group will put A$1 bln of hospitals into a trust in which it will sell 49 pct - then rent the facilities back. The cash will be useful, but operating costs and risk will rise, deterring more generous suitors.

Copper-bottomed BHP can now dig into bigger issues

21 August 2018

The $125 bln miner has tidied its portfolio and, as the latest results show, repaired its balance sheet and generated ample cash for shareholders. That gives the board and CEO Andrew Mackenzie room to consider important strategic questions about sticking with oil, gas and potash.

Cautious miners leave room for new swashbucklers

17 August 2018

Heavyweights like BHP have retreated from promising projects in tough spots. Even daring Glencore is fretting about Congo. The result is a long list of untapped resources and few buyers outside China. An intrepid fresh player could step in - if it can access private capital.

Australia’s bruised CBA shows signs of resilience

8 August 2018

The country's largest bank has endured public scrutiny, fines and executive departures. But a near-5 pct drop in full-year earnings, the first decline in almost a decade, belies a more encouraging picture for businesses like home loans. New boss Matt Comyn has tools to rebuild.

Ola’s UK ride poses a new threat to Uber

7 August 2018

India’s top taxi-app firm is expanding into Britain, months after it sped into Australia. It's the $7 bln group's second intrusion into one of Uber’s global strongholds. With both startups backed by SoftBank, success would raise the pressure on Masayoshi Son to engineer a deal.

BP takes worthwhile gamble with shale deal

27 July 2018

The $10.5 bln that the oil major is paying for BHP’s U.S. shale assets is a full price and allows the miner to finally extricate itself from an expensive mistake. But BP is plugging a strategic gap and can easily cut costs. That makes the price appear more reasonable.

Yum China deserves more than a cheap takeout

27 July 2018

Hillhouse is reportedly in talks to buy the KFC operator. It looks opportunistic given Yum’s knockdown valuation. If successful, the Beijing investment outfit gets a China consumption play with Western-style governance, and its tech savvy could supersize the $14 bln company.

Australian media mega-merger price looks generous

27 July 2018

Newspaper publisher Fairfax Media agreed to a $1.6 billion buyout bid from broadcaster Nine Entertainment. Consolidation in the country’s media industry was inevitable given recent liberalisations. But Nine shareholders have reason to be displeased by the premium offered.

Aussie tycoon hammers home overboarding message

20 July 2018

James Packer resigned from a whopping 22 more directorships after he quit the Crown Resorts board for mental health reasons. Campaigns against such overstretched executives are on the rise, as evidence suggests returns can suffer. Companies would be wise to demand greater focus.

Simplicity fixes only some bank woes Down Under

27 June 2018

A back-to-core banking push by Australia’s top lenders aims to address both public anger over poor advice and unimpressive wealth management returns. CBA is the latest to outline spinoff plans. Such splits may deflect regulatory heat. It is less clear how they help with growth.

Aussie ad deal offers signs of a frothy M&A market

21 June 2018

France’s JCDecaux is bidding $800 mln for APN Outdoor, disrupting the target’s own dealmaking. Australia is an appealing market and this could be a smart deal for the suitor. But the flurry of activity, and the exuberant reaction of JCDecaux shares, sends a worrying message.