Finland

Pricey Finland pulp deal offers paper-thin returns

2 July 2021

Shares in 5 bln euro Finnish engineer Valmet fell after it agreed an all-share takeover of valve maker Neles. Although both operate in paper, the modest cost savings on offer suggest CEO Pasi Laine may struggle to generate decent returns. Investors are right to be sceptical.

Akzo’s Finnish paint splurge is no Rembrandt

18 January 2021

The European chemicals group bid $1.7 bln for Helsinki-based Tikkurila, trumping an offer from PPG. It comes just three years after the firm led by Thierry Vanlancker fended off a takeover by its U.S. rival. Whoever wins this fight will struggle to gloss over the hefty price tag.

Nokia makes a meal of its Huawei free lunch

29 October 2020

The $19 bln telecom giant’s shares slumped after it slashed operating margins. New boss Pekka Lundmark is right to beef up investment to improve its 5G offering as China’s Huawei battles U.S. hostility. But right now Nokia is losing out on new business rather than snapping it up.

Rare creature spotted in Finland: merger of equals

1 October 2020

Industrial groups Konecranes and Cargotec are crunching together. Shareholders of each will own half of the new 4 bln euro entity, equally feast on 100 mln euros in annual cost savings, and split the board evenly. Jointly picking the CEO makes for an unusually balanced alliance.

Nordic industrial M&A gets all passive-aggressive

29 September 2020

Finnish paper group Valmet has proposed a share-based merger with valve maker Neles but not yet informed its target of any terms. That’s a bit cheeky given the latter already has a decent $2 bln cash bid from Swedish engineer Alfa Laval. Valmet needs to show its hand or go away.

Sampo takes pricey UK joyride with Hastings deal

5 August 2020

The Finnish group has made a $2.2 billion offer for the London-listed motor insurer. A 42% premium looks chunky given few cost savings on offer. CEO Torbjorn Magnusson needs to boost revenue in the cut-throat British market and swerve a likely increase in claims to avoid a crash.

Alfa Laval’s $2 bln Finnish deal assumes a lot

13 July 2020

The Swedish industrial group’s cash offer for valve maker Neles raises its exposure to carbon-heavy markets. In the absence of as-yet-unquantified synergies, the return on investment looks paltry at less than 4%. Alfa investors who hailed the purchase are taking a lot on trust.

Nokia CEO’s to-do list starts with spring clean

2 March 2020

The Finnish telecom-kit maker’s new boss Pekka Lundmark needs to hit the ground running. Improving the 19 bln euro firm’s profitability is the first step. That will help him navigate choppy waters between Washington and Beijing, and prepare for the next wave of software-based 5G.

Kone may hold trump card in Thyssenkrupp endgame

13 February 2020

The Finnish lift maker could waive a requirement for its 17 bln euro German elevator bid to hinge on the upshot of antitrust probes. Kone’s plan can fly if it sells any forced disposals to partner CVC. Either way, Thyssenkrupp will find it harder to reject its premium offer.

Uncle Sam’s 5G telecom fantasy is M&A nightmare

7 February 2020

Attorney General William Barr thinks the U.S. could buy Nokia or Ericsson to counter China’s Huawei. But making private firms do the state’s bidding is not how America works. Wrapping suppliers in the flag would also destroy value. Selling shareholders would be the only winners.

Nokia misses yawning Huawei open goal

24 October 2019

The phone-kit maker’s shares dropped by a fifth as it slashed profit forecasts and cancelled its dividend. Increased competition for 5G networks suggests its Chinese rival is cutting prices. But if Nokia can’t cash in on Donald Trump’s anti-China push, the future looks grim.

New Nordea CEO bets on predictable mediocrity

24 October 2019

A 1.3 bln euro charge for defunct IT systems and cost-cutting dragged the $30 bln Nordic lender to a third-quarter loss. New CEO Frank Vang-Jensen’s modest 10% return on equity target is hardly inspiring compared to more profitable rivals in the region. At least it’s achievable.

Some Uniper investors now more equal than others

8 October 2019

Finland’s Fortum is buying the 20.5% of the German utility held by activists Knight Vinke and Elliott for 2.3 bln euros. Pushing its own holding above 70% gives Fortum effective control. But it makes second-class citizens of Uniper shareholders that don’t get the same deal.

New Nordea boss faces déjà vu cost-cutting test

5 September 2019

The $25 billion Nordic bank is changing gears, replacing its CEO earlier than expected with Frank Vang-Jensen, who successfully slashed expenses at Swedish rival Handelsbanken. To meet its new financial targets and keep activist Cevian happy, Nordea will need the same treatment.

Lowball Nordic IT sale gives Apax a better exit

18 June 2019

The buyout firm accepted a lowly 1.3 bln euro cash-and-shares offer for Norwegian computer services firm Evry from Finnish rival Tieto. The measly 15% premium is less than half the value created by cost savings. Still, a 20% stake in the combined group should be easier to sell.

Huawei’s EU friends will stay on the line for now

30 May 2019

BT and Vodafone paused sales of some of the Chinese group’s phones after America put it on a blacklist. Yet Huawei equipment still pervades European telecom networks. Ripping it out now would be costly and disruptive. Better to wait and see whether the U.S. pressure persists.

Nordic $3.2 bln telco deal makes little sense

9 April 2019

Norway’s Telenor is buying a majority stake in Finland’s DNA and will offer to buy the rest for a total price tag of 2.8 bln euros. The financial returns of this odd move into a mature market will be so slim that CEO Sigve Brekke may do better by handing more cash to investors.

Nokia valuation lacks Huawei boost

31 January 2019

Like Sweden’s Ericsson, the Finnish telecom-kit maker will gain if the Chinese rival is shut out of more markets. Yet Nokia’s valuation is lower than for much of last year and CEO Rajeev Suri expects a so-so 2019. A European ban on Huawei would change that.

Cevian, Nordea dangle truce in bank activism feud

21 December 2018

Lenders and shareholder activists rarely gel. But the Nordic bank welcomed the Swedish fund’s 2.3 pct stake. Cevian’s proposals for cost cuts are less radical than, say, a breakup, but could push Nordea’s return on equity to 14 pct. Its surplus capital could be a sweetener.

Anta deal enters arena of extreme financial sports

13 December 2018

Instead of a straightforward acquisition, the Chinese company structured a $5.2 bln LBO of Finland’s Amer. Partners like Lululemon’s founder may help accelerate sales of workout apparel and Salomon skis, but hefty debt also implies a risky race for private equity-style returns.