Swiss generics buyout requires flawless treatment 3 Feb 2022 Blackstone and Carlyle are eyeing Novartis’ Sandoz unit, worth perhaps $25 bln. The reported valuation looks punchy given the misfiring off-patent pill producer’s limited scope to grow. The slightest hiccup could leave private equity buyers swallowing a meagre return.
UBS’ Morgan Stanley impression could use more work 1 Feb 2022 CEO Ralph Hamers’ job is to get a valuation closer to the U.S. group’s 2.5 times tangible book value multiple, compared with his $68 billion bank’s 1.2. New buybacks help, but the missing ingredient is growth. Investors are understandably sceptical that Hamers can change that.
Credit Suisse shock holds warning for new strategy 25 Jan 2022 The $20 bln bank, whose Chair António Horta-Osório just quit after nine months, took more legal charges and expects a slowdown in trading and wealth management. Investors can look past old litigation. But sluggish revenue raises doubts over how it can grow while slashing risk.
Viewsroom: Credit Suisse chair, Unilever’s GSK bid 20 Jan 2022 As António Horta-Osório quits the Swiss lender after less than a year, Liam Proud explains what happened and offers career advice. And Unilever’s 50 bln pound offer for the pharma giant’s consumer unit puts both CEOs on the spot, say Aimee Donnellan and Dasha Afanasieva.
How António Horta-Osório can bounce back (again) 18 Jan 2022 The tennis-loving Credit Suisse chair resigned after flouting quarantine rules. He’s survived a past personal scandal and is one of a small number of Europeans with a strong track record of running a big bank. Breakingviews imagines some advice from an optimistic headhunter.
New Credit Suisse chair has grim streak to break 17 Jan 2022 António Horta-Osório has resigned from the Swiss bank after flouting Covid-19 rules. It’s less than a year since he arrived to steady the lender following CEO Tidjane Thiam’s ousting. Incoming Chair Axel Lehmann, formerly of UBS, has to hope his reputation is more durable.
The Exchange: Zurich CEO takes on 2022’s big risks 13 Jan 2022 Failure to reduce carbon emissions is top of mind for Mario Greco, who has run the 65 bln Swiss francs insurer for the past six years. But other hazards, like loss of social cohesion and geopolitics, are also on the horizon, he tells Rob Cox in a Breakingviews Predictions chat.
European banks’ league-table loss is investor win 10 Jan 2022 Dealmakers at Credit Suisse, Barclays, UBS and others are losing market share in their home region. Fighting back is costly and futile given the advantages of U.S. behemoths like JPMorgan. Better to slim down and focus on key niches, as Deutsche Bank has with bond underwriting.
Davos delay will stoke gabfest demand 20 Dec 2021 January’s Swiss conflab is off, for the second year running. In 2021, Zoom calls and rival events like COP26 raised the risk Davos could lose its relevance. In 2022, enough bankers were looking forward to the slopes to imply that a summer event will still get takers.
Switzerland has rich-world foreign reserve problem 15 Dec 2021 After years of intervening to curb franc strength, the central bank has amassed $1 trillion in foreign currency investments. A group of academics suggests converting this into a sovereign wealth fund but that would bring its own worries. Wisely investing so much money isn’t easy.
Kidney transplant endangers healthy CSL 14 Dec 2021 The Australian flu-vaccine maker will buy Swiss nephrology specialist Vifor for about $12 bln in cash. It’s paying a 60% premium for a weaker peer and doesn’t expect much in the way of cost savings. The mid-pandemic diversification hardly justifies this elective M&A procedure.
Nestlé’s $10 bln L’Oréal sale is a messy trim 8 Dec 2021 The food giant sold a 3% stake in the French cosmetics group, hanging onto 20%. It’s been a strong performer, but a full exit would make more sense for Nestlé’s shareholders. CEO Mark Schneider’s timidity may reflect a dearth of reasonably priced companies to spend the money on.
CSL’s Swiss drug punt looks like a bad trip 2 Dec 2021 The $99 bln Aussie jab maker is in talks to buy iron-deficiency specialist Vifor for around $7 bln. CEO Paul Perreault has a track record of strong growth and winning M&A. The prospect of subpar returns and a looming patent expiry suggest his golden touch is losing its lustre.
Glencore’s activist is misguided but not unhelpful 30 Nov 2021 Bluebell is pushing the $63 bln miner-trader to spin off coal. Thungela’s plans to dig up more of the mineral after its Anglo spinoff weaken the argument, and prices are at record highs. Still, if it makes Glencore quit coal quicker than its 2050 target, it’s a job well done.
UBS foreign chair ticks more boxes than Deutsche’s 21 Nov 2021 The Swiss lender picked Irishman Colm Kelleher to lead its board, while the German bank nominated Dutchman Alex Wynaendts. The former Morgan Stanley banker might bring some of the U.S. firm’s valuation magic to UBS. But M&A-hungry Deutsche could use more political heft in Berlin.
Richemont beats orderly retreat from digital fight 12 Nov 2021 Under pressure from activists, the Cartier owner plans to spin off its loss-making online arm to rival Farfetch and others. If valued in line with peer Zalando it would be worth a respectable 4.7 bln euros. A sale should help Richemont close the valuation gap with luxury rivals.
Sika has scope to focus on grander form of defence 11 Nov 2021 The $55 bln Swiss group is paying $6 bln for BASF’s old construction chemicals unit. Two years ago, bulking up helped see off hungry French rival Saint-Gobain. Now three times the size, Sika can use deals like this to position itself at the good end of a hard-to-green sector.
Richemont activism is more coaxing, less conflict 8 Nov 2021 Funds including Dan Loeb’s Third Point may push the Cartier owner to close a 20%-plus valuation discount to luxury peers. With half of the voting rights, Chairman Johann Rupert is in firm control. Unlocking value will depend on convincing him to make sensible strategic changes.
Credit Suisse bland revamp has a valuation penalty 4 Nov 2021 Chair António Horta-Osório is moving $3 bln of capital from the investment bank to wealth management. But he’s keeping most of the error-prone unit, which chews up capital and has few synergies with the rest of the bank. The clunky structure cements a share price discount to UBS.
Roche has edge on Novartis in Swiss pharma switch 4 Nov 2021 The drugs giant is buying back stock from its rival for $20 bln. It highlights the group run by Severin Schwan’s rich valuation and makes risky M&A less likely. The cash could be less helpful for Novartis, which is still in the middle of a turnaround and has a patchy deal record.