Roche tries to recapture the Genentech magic 12 Jan 2015 The Swiss drugs giant is paying about $1 bln for up to 56 pct of cancer testing firm Foundation Medicine. The structure echoes its success taking control of Genentech in 1990 and leaving it independent. A whopping 109 pct premium reflects Roche’s mistake of low-balling Illumina.
Swiss give positive lesson in negative rate policy 18 Dec 2014 A safe-haven currency can invite economic trouble. The Swiss central bank is up to the challenge. It started with market intervention and has now introduced a negative overnight rate. The Swiss realise that money is more of a policy tool than a store of value.
Saint-Gobain’s deal cunning could backfire 8 Dec 2014 The French materials group is seizing control of Swiss peer Sika by paying $2.8 bln for a minority family stake which has majority voting rights. Sika’s board is laudably indignant. And Saint-Gobain’s tactics have a hidden cost of upsetting other investors and the target’s staff.
Richemont and Net-a-Porter are better as separates 3 Dec 2014 The Swiss luxury group is reportedly mulling a sale or IPO of its online subsidiary. That makes sense. The e-retailer fits awkwardly in the Cartier owner’s portfolio. A more tech savvy owner would suit Net and let Richemont focus on the high-margin luxury business it knows best.
Betting against Swiss currency cap is high stakes 27 Nov 2014 Traders are testing the central bank’s franc ceiling and using options to bet the currency will break through. The wager is inspired by euro weakness and a looming referendum on whether the SNB should buy more gold. This is one monetary authority the market is unwise to take on.
Private equity shows signs of pre-crisis brio 25 Nov 2014 Canada’s Onex has bought Swiss packager SIG for up to $4.7 bln in a secondary buyout. It’s one of Europe’s biggest LBOs in five years and deploys pre-crisis levels of leverage. Private equity restlessness and a shortage of big targets created the conditions for a landmark deal.
Credit Suisse’s future is mid-table drabness 23 Oct 2014 The Swiss group’s investment bank trumped Wall Street in Q3. But it’s no longer a top-tier player in any standalone business line, and questions linger over its ability to maintain strong fixed income returns if rates rise. Muted expectations should apply to other divisions too.
ABB switches into rehabilitation mode 22 Oct 2014 After a series of nasty surprises, the Swiss engineering giant’s recovery is charging up. ABB has made progress in fixing its stricken power systems unit, while strong orders highlight operational strengths. But slipping profitability and a wobbly macro outlook remain concerns.
Rolls-Royce enters new era of uncertainty 17 Oct 2014 A profit warning has sent the UK engineer’s shares down 8 pct. Russian sanctions and the weak world economy are hurting. Cost cuts and new medium-term guidance show Rolls is trying to soften the blow. But investors may discount the company’s forecasting powers.
Nestle needs to step up pace of change 16 Oct 2014 The Swiss food group has missed its 5 pct sales target, again. Its relatively high share price rating is vulnerable. Nestle has a plausible strategy to expand in more promising lines of business. To retain investors’ faith, it may have to find its future more quickly.
Glencore Rio takeover would be harder than Xstrata 7 Oct 2014 Ivan Glasenberg’s miner-trader is stalking $90 billion iron giant Rio Tinto. Though there’s some logic to a deal, Glencore will be loath to pay much of a premium, and the clash of cultures would be extreme. Rio is also in a better position to resist than rival Xstrata in 2012.
ABB’s $4 bln buyback camouflages still-tough future 9 Sep 2014 The Swiss engineer pleased investors by promising to buy back shares equivalent to 7.5 pct of its market cap. But it also cut growth and margin targets. There’s an organisational rejig too. Even after the reset, ABB will have to work hard to meet its goals.
U.S. bankers should add Ros Stephenson to contacts 2 Sep 2014 In her new role at UBS, the ex-Barclays investment banking chairman will need to replenish the depleted ranks of dealmakers. It’ll be one of the few shops on Wall Street hiring with any gusto. Stephenson probably won’t accept all calls, though, and her pitch may have limited appeal.
Falling euro squeezes Swiss, Swedish central banks 29 Aug 2014 A lower currency helps the ECB fight disinflation. It’s a curse for Swiss and Swedish central banks, which are running out of traditional ways to stop an unwanted appreciation in their currencies. They may end up having to follow the euro zone into less charted policy waters.
Credit Suisse cost cuts mask uneven performance 22 Jul 2014 The Swiss bank’s fixed income arm offset private bank weakness in the second quarter – the opposite of the first. Credit Suisse’s cost savings helped it shrug off a big U.S. fine, and exiting commodities makes sense. But at some point top-line strength needs to replace tinkering.
Life’s like a box of chocolates for Lindt owners 14 Jul 2014 Investors in the Swiss confectioner didn’t know they were going to get Russell Stover, the $1 bln-plus U.S. firm whose gift box starred in Forrest Gump. They still don’t know exactly what Lindt paid. Cost savings will be slim. This is about selling more chocs in middle America.
Nestle’s skincare buy-in has opportunistic streak 28 May 2014 The Swiss company, best known as a chocolatier, is paying Canada’s Valeant $1.4 bln for the marketing rights to a clutch of beauty treatments. It is Nestle’s first big move in the sector after February’s deal with L’Oreal. There are wrinkles. But they are worth wearing.
Dull industrials could make shiny tax-arb targets 22 May 2014 Juiced up on drug deals that promise big tax savings, like Pfizer’s bid for Astra, bankers are pitching copycat transactions before Congress gets wise. Tyco, Ingersoll-Rand and Pentair went abroad during a previous exodus and may tempt acquirers seeking inversions of their own.
Credit Suisse misses chance to show accountability 20 May 2014 Brady Dougan says he did not consider resigning over the bank’s guilty plea for tax evasion. He may not have been involved in the wrongdoing, but as CEO he stands for the firm. A top-level departure would demonstrate Credit Suisse’s ethical standards, and shame other bank bosses.
Long arm of U.S. law doesn’t extend to cyberspace 20 May 2014 Credit Suisse’s guilty plea and $2.5 billion fine for helping tax dodgers shows Uncle Sam’s hold over finance is strong even beyond its borders. Yet hacking accusations against Chinese military personnel have produced only defiance. It’s a sign of the limits to U.S. legal power.