Sweden

EQT’s $2.8 bln pharma bet relies on sales booster

14 December 2020

The Swedish buyout firm is buying manufacturer Recipharm, which handles outsourced production for drug giants like Moderna. Given the target’s already heavy borrowings, delivering a decent return for EQT’s investors will depend on ramping up revenue growth.

Buy-now-pay-later exposes regulation blind spot

8 December 2020

Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.

Norway’s offices are prize in $3.4 bln bidding war

26 November 2020

Sweden’s Castellum launched an offer for Entra days after the Oslo-based group rebuffed a bid from real estate rival SBB. Reliable government tenants and a relatively stable economy are alluring in a sector ravaged by the pandemic. But the bidders will struggle to create value.

KPN adds Dutch fibre to Europe telco buyout buffet

12 October 2020

Private equity firm EQT is sizing up the Dutch phone operator, according to Bloomberg. Worth 16 bln euros including debt, it’s a major meal even before the government weighs in. Smaller operators in Europe’s bombed-out telecoms sector may make simpler and tastier treats.

Economics Nobel lauds auction half-truths

12 October 2020

Paul Milgrom and Robert Wilson won the prize for advancing bidding theory. Their fans see rigour and the backbone of Google’s pricing. But sceptics wonder if their formal models are any more effective than rules of thumb in radio spectrum sales or bring long-term social gains.

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.

Klarna’s new $11 bln valuation looks a stretch

15 September 2020

The Swedish buy-now-pay-later startup’s new funding round means it has doubled its worth in a year. That looks reasonable relative to rival Afterpay’s market valuation. It looks less so once you use multiples that better reflect competition and regulatory risks.

Sweden’s $2 bln oat milk startup has watery moat

16 July 2020

Oatly, which makes the dairy substitute loved by hipsters and baristas, raised capital from Blackstone and celebrities including Oprah Winfrey. Sales reached $200 mln in 2019 and are expected to double again this year. But its lead could sour as bigger groups like Danone wade in.

Europe’s private-equity share premium is temporary

16 July 2020

Sweden’s EQT and Swiss Partners Group fetch price-earnings multiples way above KKR, Blackstone, Carlyle and Apollo. That’s justified by faster growth and a higher proportion of management fees, which are more predictable than carry. As the newer funds mature, that will erode.

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.

Sweden chips away at fintech star’s foundations

13 July 2020

A new law by the Nordic state requires Klarna to reduce the prominence of so-called “buy now, pay later” options on e-commerce platforms. It could check a key growth area for the domestic financial group. That might be a problem if other governments decide to clip its wings too.

Scandi airline rescue is formation-flying lesson

30 June 2020

Sweden and Denmark are taking an equal share of the knotty $1.5 bln rescue of regional carrier SAS. If equity and debt holders agree, it’s an exception to the rule that national priorities impede cross-border bailouts. Air France-KLM’s fractious state owners should take note.

The Exchange: Pehr Gyllenhammar

23 June 2020

Long-time Volvo CEO Pehr Gyllenhammar was pushing radical environmental and social changes at the carmaker long before they became fashionable. One of Sweden’s most admired businessmen argues why CEOs should be paid less and how it felt to become a father again at 81.

Gilead solidifies pharma pandemic insurance premia

9 June 2020

The $100 bln company has an approved Covid-19 drug that the U.S. government is distributing. That helps replace maturing HIV and dwindling hep C meds, and made Gilead a takeover target. The ability to cure what ails the entire economy buffs the sector’s strong defensive nature.

Swedish virus outcomes will be hard to copy

12 May 2020

The only Western state not to enforce a lockdown has a higher death rate than Nordic peers but lower than Britain or Italy. Its economy will emerge less scarred. But that’s also because of generous welfare and the fiscal room it’s using to compensate companies for lost sales.

Corona Capital: Extended Stay, Victoria’s Secret

22 April 2020

Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.

Corona Capital: Pemex, Bond liquidity

20 April 2020

Concise views on the pandemic’s corporate and financial fallout: Pemex becomes world’s chunkiest fallen angel, and bond liquidity gets a needed boost.

EU banks get scary bad-debt warning from Sweden

8 April 2020

Swedbank’s first-quarter impairments jumped tenfold from a year earlier because of Covid-19. That’s despite a relaxed Swedish attitude to lockdowns and lenders’ accounting wiggle room. A similar spike across Europe would wipe out most profits for 2020, and bigger hits may come.

Geely picks odd timing for Volvo IPO reboot

10 February 2020

After abandoning a $30 bln flotation of the Swedish carmaker in 2018, its Chinese owner wants to combine it with its Hong Kong unit, and list in Sweden. A merger might create savings. Yet any benefit will be overshadowed by a tough domestic market and the coronavirus fallout.

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.