GE scores a Pyrrhic victory in France 20 Jun 2014 The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.
GE remains the best bet for Alstom’s board 20 Jun 2014 Rival bids from GE and Siemens for Alstom’s energy business have converged in terms of cash, complexity, political acceptability, and Alstom’s future structure. This is not conventional M&A, so the outcome is unpredictable. But GE’s bid remains simpler, and richer in cash.
Paris forces GE into over-engineered Alstom bid 19 Jun 2014 Take 3: out goes a simple $16 bln cash deal with some job promises. In comes a string of joint ventures to satisfy France’s taste for alliances and industrial champions. This looks less shareholder-friendly but more deliverable, and pulls GE further ahead of rival bidder Siemens.
Shire’s independence harder to defend than Astra’s 18 Jun 2014 The UK-listed, Dublin-based pharma group is again in the grip of bid speculation after a frenzy of M&A in the sector. Astra may have repelled Pfizer, but the circumstances are very different. At least Shire has the outside chance of using an auction to get a bidder to pay up.
Siemens offers Alstom a real alternative 17 Jun 2014 The German group and Mitsubishi Heavy proposed to buy some of the French company’s energy assets. Compared to GE’s friendly 11.4 bln euro bid, there’s less cash, less industrial sense, and more complexity. So this is still a Plan B. But it’s credible and politically astute.
BNP’s chief operating officer retires. Next? 12 Jun 2014 The French bank’s long-serving COO is leaving earlier than planned. New York regulators are said to have wanted this as part of a multibillion-dollar settlement for sanctions violations. BNP doesn’t draw a link. The question of who takes responsibility for the mess remains open.
Siemens needs more than Mitsubishi to win Alstom 11 Jun 2014 The German engineer has teamed up with Japan’s Mitsubishi Heavy Industries in its potential bid for Alstom. A joint approach lowers antitrust risk and cash outflows for Siemens. But trumping GE’s rival $15.4 bln proposal and job commitments will still be difficult.
BNP’s dollar clearing capability is non-negotiable 6 Jun 2014 The French bank’s impending penalty for alleged U.S. sanctions-breaking could include a temporary ban on clearing payments through New York. Such business appears to be less than 5 pct of revenue. But its value to BNP Paribas’ wider operations and growth strategy is far greater.
France in risky defence of BNP Paribas 3 Jun 2014 Paris broke its silence on the French bank’s U.S. judicial woes by calling a mooted $10 billion fine “unreasonable.” The fear is that the lender’s operations might suffer as well. The concerns are understandable. But it may not be wise to side too closely with BNP.
BNP Paribas fine farce requires swift resolution 30 May 2014 The French bank’s shares sank 6 pct after a media report that penalties for sanctions breaches could top $10 bln. Doubts about the intentions of the U.S. authorities may be creating a false market in BNP shares. Worse, the delay raises the prospect of possible EU retaliation.
GE’s new Alstom bid makes Siemens a distant second 28 May 2014 The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.
Piketty spreadsheets set bad Excel example 27 May 2014 Authors who submit data to scrutiny deserve applause. The Financial Times’ critique of the French economist’s work shows it’s also risky. In a broad study, errors are almost inevitable. But Piketty could have helped himself – and the dismal science – with better Excel etiquette.
Jumbo fine could help BNP out of U.S. morass 22 May 2014 The French bank’s penalty for alleged sanctions violations could reportedly entail short-term curbs on its U.S. business, with unpredictable consequences. If a bigger upfront fine offers the chance to avoid that outcome, BNP should go for it – even if dividends suffer.
Orange talk shows Bouygues’ pull on French state 16 May 2014 The former monopoly could buy the telecoms arm of the French construction company. Bouygues is also crucial to Alstom’s fate. Martin Bouygues failed to bag mobile operator SFR. But he’s been remarkably adept at using that defeat to get the French government onside.
Shareholder spring still cloudy in Paris 16 May 2014 French cable maker Nexans finally split its chairman and CEO roles, giving in to demands of minority investors. But the current boss they wanted to sack will remain chair. The French state, a large shareholder, missed a chance to promote good governance.
U.S. mega-fines threaten BNP more than Credit Suisse 15 May 2014 The French bank faces a $3 bln penalty for allegedly violating U.S. sanctions, while its Swiss peer could be fined $2 bln for claims it helped Americans evade tax. CS would wind up with a lower capital ratio. But BNP’s expansionist strategy would be more extensively derailed.
France plays to type with unneeded takeover decree 15 May 2014 The extension of the French government’s powers to oppose unwanted takeovers by foreign firms simply codifies current practices, but it won’t enhance the country’s reputation as a place to do business. With growth stalling, Paris has more important economic challenges.
Deal failure intensifies Publicis’ succession woes 9 May 2014 The end of the merger between the French advertising company and its U.S. rival Omnicom leaves Publicis without a plan for replacing 72-year-old CEO Maurice Levy. That is a long-standing issue that the board repeatedly failed to address. It has just taken on a new urgency.
Big Ad merger sorely misjudged its audience 9 May 2014 The failed $35 bln tie-up of Publicis and Omnicom was a triumph of financial logic that failed to account for human behaviour. Merging two rivals of near-identical size looked elegant on paper. But that doesn’t mean much if clients, employees and regulators don’t buy the concept.
Alstom chase is distraction from Siemens revamp 7 May 2014 The German engineering giant’s long-awaited new strategy sensibly focuses on improving efficiency and cutting slack. A possible Alstom deal comes at a bad time, even though the French rival would be a good industrial fit. Siemens management has enough to deal with in-house.