Blackstone sells China some unlikely trophy assets 2 Jun 2017 The buyout firm is cashing in on an appetite for logistics by selling Logicor to CIC for 12.3 bln euros. A European e-commerce boom and shortage of property is driving up valuations and rents. Prime warehouses now have better yields than a luxury store in London’s Mayfair.
Hadas: Climate not real loser from Trump tantrum 2 Jun 2017 The decision to quit the Paris climate-change accord won’t have a big effect on either global warming or the fight against it. What is truly dangerous is the U.S. president’s frontal attack on the still underdeveloped system of global governance. A vigorous defence is now vital.
Mark Carney’s inflation fight hits close to home 2 Jun 2017 Bank of England support staff are threatening to strike over a sub-inflation pay rise. Across the UK economy, rising prices are squeezing incomes. This hits the least well-off the hardest. But it would be hard for the BoE governor to undermine his efforts to keep prices in check.
Linde-Praxair back Big Gas, investors don’t yet 2 Jun 2017 Both gas-makers’ boards have approved their $74 bln transatlantic merger. Even Linde’s sceptical worker representatives backed down. Yet shareholders aren’t pricing in the benefits of the tie-up. They may be partly right, but at least neither side is putting cash on the table.
Buyout mega-funds: bigger and hopefully boring 2 Jun 2017 Large buyout war chests are back, as seen by CVC and KKR’s multibillion-dollar pools. Mega-funds promise respectable returns, but with less risk than smaller peers. Or at least, they have done lately. With cash to splash and valuations high, the challenge is to remain unracy.
Deere deal is paved with good intentions 1 Jun 2017 The $40 bln U.S. farm-equipment maker is diversifying further into road building, paying $5.2 bln for Germany's Wirtgen. It's a big deal and overseas, but Deere's pitch on strategy and price sound reasonable. It will need to work out better than Caterpillar's Bucyrus bet, though.
Cox: Sgt. Pepper also taught the board to play 1 Jun 2017 It was 50 years ago that the Beatles spawned a music boom. The industry has changed, but the album's messages still resonate, even in the business world. As Warren Buffett or Steve Jobs might attest, if we work together, experiment and fix holes, things get better all the time.
Akzo is emblem for new “fortress Europe” 1 Jun 2017 The Dutch maker of Dulux paint thwarted a generous 25 bln euro takeover attempt from U.S. rival PPG without putting forward a convincing financial defence. As European governments reach for more power to fend off unwanted mergers, Akzo has shown how shareholders can lose out.
Barclays faces unfamiliar issue: excess capital 1 Jun 2017 The UK lender is offloading all but 15 pct of its African unit for $2.9 bln after strong demand from investors. The sale should lift its capital ratio above 13 pct. After a year of retrenchment CEO Jes Staley can begin to think about how the slimmed-down bank can reward shareholders.
Publicis pay hike shows where real power lies 1 Jun 2017 Long-time boss Maurice Lévy will receive 2.8 mln euros as chairman – more than he was paid as CEO. After 30 years in charge of the advertising group he has much to teach his successor. But his presence on the board inhibits fresh thinking at a firm that has struggled for growth.
Spanish bank mess could make or break CoCos 1 Jun 2017 Banco Popular’s contingent capital bonds have collapsed in price, for fear they will be converted into equity. If they do so without causing chaos, it would show that CoCos are a viable instrument in a real-world bank rescue. A failure to trigger would confirm the opposite.
Finnish-German utility would make odd couple 1 Jun 2017 Shares in Uniper jumped on a report that Finland’s Fortum is considering buying E.ON’s 47 pct stake in the 6.3 bln euro power group. Yet Uniper’s big carbon footprint would tarnish the Finns’ clean energy strategy, and its lackluster earnings make the financial logic a stretch.
Politics align for Malaysia bank merger 1 Jun 2017 Efforts to squish together the country's banks have repeatedly failed. Now RHB could buy AmBank, creating a $9 bln group. After the 1MDB fund scandal, big shareholders may be keener to do a deal. A rising oil price helps too. The trick will be to keep the structure simple.
Trump climate exit has bright silver lining 31 May 2017 U.S. support for anti-warming measures will be missed, if its withdrawal from the Paris accord is confirmed. But states, cities and businesses remain on board. And for nearly 200 other countries, including top polluter China, progress may be smoother free of D.C. foot-dragging.
Barclays has honourable Africa retreat in sight 31 May 2017 The UK lender is offloading a $2 bln stake in its Johannesburg-listed unit as part of its exit from the continent. Political turmoil in South Africa may have interfered with a sale. But a supportive local fund and the robust rand have allowed Barclays to effect an elegant escape.
Euro zone “safe” bonds would be anything but 31 May 2017 The European Commission has suggested creating low-risk securities by pooling sovereign bonds. The idea is to reduce banks’ exposure to governments. But risks would still be interconnected. Without a common tax base and joint liability, no pan-euro zone debt can be truly secure.
Hadas: Ending the hyperbole over pension savings 31 May 2017 The World Economic Forum wants all workers to put more aside for retirement. That may be conventional wisdom, but it is economic nonsense. For a nation, current savings cannot reduce the burdens of future pensions: if anything such reliance risks worsening the social challenge.
Activist adds teeth to Ericsson’s turnaround 31 May 2017 Cevian has taken a 5 pct stake in the Swedish telecoms-kit maker. Boss Borje Ekholm’s strategy of slimming down and boosting margins is sound, but lacks credibility as he was on the board when things turned sour. It can’t hurt to have a big investor breathing down his neck.
AIB’s IPO must balance politics and pragmatism 31 May 2017 Ireland plans to float 25 pct of the nationalised bank. A good result for the government would be a valuation similar to UK lender Lloyds. Similarities include low costs and strong market share. But AIB also has some things Lloyds doesn’t, like a bad loan ratio of 14 percent.
Car debt adds horns to UK’s Brexit vulnerability 31 May 2017 Britons’ non-mortgage debt has been growing at a 10 pct annual clip, of which half the growth is car financing. The risk for that lies not with banks or borrowers but car companies. If they pull back, a post-Brexit Britain could end up with less consumption – and less employment.