GKN turbocharges defence with $5 bln auto sale 9 Mar 2018 The besieged engineer is selling its car parts division to U.S. rival Dana for stock and cash. The price looks generous, and even allows GKN to ditch its pension liabilities. The sum of the UK group’s parts now looks well above what hostile suitor Melrose Industries can afford.
Oil can do better than “shale, stale and male” 9 Mar 2018 The energy industry has an abysmal record of hiring women – and the CERAWeek energy confab in Houston reflected rather than addressed the problem. But as oil companies move jobs from the well to the lab, hiring women is logical as well as right.
Shell investors could live with a BHP shale punt 9 Mar 2018 The Anglo-Dutch oil major may bid with Blackstone for the miner’s $10 bln U.S. shale assets, Sky says. The business would be less risky for Shell’s balance sheet than drilling for traditional oil. And private equity’s high return targets could reduce the danger of overpaying.
Viewsroom: Trump slaps tariff fear on markets 8 Mar 2018 Imposing levies on steel and aluminum has lost the president his economic adviser, ex-Goldman No. 2 Gary Cohn. That has shocked investors out of complacency. Also: Italy’s elections leave fringe parties in charge. And big deals may be back on the agenda for the mining industry.
Disney CEO’s pay is a deal too far 8 Mar 2018 The media group’s shareholders voted against plans for Bob Iger’s pay. He made $36 mln for 2017 and will benefit if a $52 bln purchase of parts of Fox goes through. Iger’s job is to make deals work, not just make them, and the board’s is to ensure his presence isn’t “imperative.”
U.S. metal tariffs may not be biggest trade worry 8 Mar 2018 The president’s steel and aluminum levies have rattled markets and nudged his economic adviser to quit. A probe into Chinese intellectual-property policy could prove more devastating, though. It commands wide support and could inflict broad trade and investment disruption.
Hassett stacks up as next Trump economics counsel 8 Mar 2018 Among those who might replace Gary Cohn, current CEA head Kevin Hassett stands out as a thoughtful conservative economist, well placed to moderate the president’s protectionist impulses. While he has aired the occasional dubious view, that might actually boost his chances.
Oil-obsessed U.S. is drilling itself into a ditch 8 Mar 2018 Shale producers are tilting the market such that international oil drillers will scramble for some time. That’s provoking creative thinking. From Aramco to BP, large international oil firms are planning credibly for a lower-carbon world. Eventually, Americans will come up short.
Cigna pays over the odds for uncertain benefit 8 Mar 2018 The insurer is paying $54 bln for pharmacy middleman Express Scripts in the latest healthcare consolidation move. Express’s business has stalled and the FDA’s campaign for drug-price transparency threatens its model. Cigna’s $13 bln premium is not a sure prescription for growth.
Gary Cohn could go from White House to blackboard 7 Mar 2018 President Trump’s departing economic adviser may fancy staying in government. Or perhaps he’ll try to return to finance. But America is awash with politicians and bankers. Becoming a teacher would be a fine display of public service. Cohn now has some valuable lessons to pass on.
Dollar is Trump’s measuring stick, and cudgel 7 Mar 2018 Stocks fell after President Donald Trump’s top economic adviser resigned, but a better gauge of his performance is the dollar. It has dropped nearly 10 pct versus major currencies since he took office. This market no-confidence vote nonetheless serves Trump’s purpose on trade.
Trump tariffs risk more than just a new trade war 7 Mar 2018 Europe will retaliate if U.S. President Donald Trump slaps tariffs on steel and aluminium imports. A transatlantic trade fight is just one danger. By invoking a little-used national security loophole, Trump is setting a precedent of how to subvert international commerce rules.
Kraft Heinz next M&A meal could be breakfast 7 Mar 2018 The $83 billion food company looks due for a deal. Mondelez is a logical target but is expensive. Hershey is growing but gives Kraft less room for error. Kellogg is cheaper and offers room to cut costs, so long as Kraft can convince insiders to sell.
Smurfit Kappa can get better mix of paper and pulp 7 Mar 2018 The Irish packaging group rejected International Paper’s approach despite a 27 pct premium. The U.S. suitor will need to offer more cash to tempt investors, but is restrained by high debt. With targets scarce at home, though, the lure of a European foothold may be worth the risk.
Rolls-Royce’s cash engine roars into life 7 Mar 2018 The UK aerospace group churned out 273 mln pounds of free cash in 2017, more than twice what analysts expected. It should do even better this year. Boss Warren East has been understandably stingy with dividends after profit warnings and a bribery scandal. Expect that to change.
Telecom Italia investors find two reasons to cheer 7 Mar 2018 Boss Amos Genish has kicked off the separation of the telco’s fixed-line network, and will slash debt. A rerating of the network could help the group’s valuation, and a step-up in free cash flow brings the prospect of long-awaited dividends. Both should please shareholders.
Cohn exit makes White House chaos markets’ problem 6 Mar 2018 The ex-Goldman Sachs banker was a buffer against anti-trade voices in President Donald Trump’s administration. Now Gary Cohn is leaving, and Trump is ramping up protectionist talk. Markets have been phlegmatic about disorder in Washington. That can no longer be taken for granted.
U.S. bank mergers creep one step closer 6 Mar 2018 The Senate looks set to raise the $50 bln level at which a bank comes in for extra regulation. Received wisdom is that doing so will set off a wave of deals for small and mid-size lenders. But amid falling taxes and rising rates, comfortable CEOs may have other ideas.
Qualcomm deal delay hints at new tech nationalism 6 Mar 2018 U.S. authorities fear the $95 bln chipmaker could lose its innovative edge if acquired by rival Broadcom. Yet objections to a foreign buyer look like a fig leaf for the real message: Qualcomm is too strategic to be taken over by a suspect suitor, regardless of its nationality.
Akorn deal could crack M&A MAC nut 6 Mar 2018 Merger escape clauses are notoriously hard to trigger. Even performance woes at drugmaker Akorn aren’t enough for Fresenius to demand a discount on an agreed $4.3 bln tie-up. If the German healthcare group can prove Akorn misled regulators, though, it is a different story.