GKN recruits stateside backup for Melrose bid 2 Mar 2018 The UK engineer fighting a 7 bln pound hostile bid may merge its car unit with U.S auto supplier Dana. Though a deal would be complex, it reinforces GKN’s case that a breakup creates value. The prospect of bringing in new management also defuses one of Melrose’s criticisms.
Airbus’s sunnier skies still contain clouds 15 Feb 2018 Shares in the aerospace giant jumped by one-tenth on Thursday following an 8 percent rise in operating profit, higher than analysts expected. But its operating margin still lags those of U.S. rival Boeing. Closing the gap could be complicated by a fresh stateside corruption probe.
GKN’s flawed defence is still good enough 14 Feb 2018 The besieged UK engineering group pledged to sell assets and boost margins. A hurried sale of its best asset is regrettable. But new chief executive Anne Stevens’ profit targets are credible and ambitious. That gives her a chance of fending off hostile bidder Melrose.
Boeing in-sourcing idea fires on two engines 8 Feb 2018 Even as it negotiates with Embraer, the $207 bln company is in talks to buy parts supplier Woodward, the WSJ reports. With a seven-year backlog of plane orders, Boeing could raise profitability by bringing more work in-house. Plus, it could throw sand in rival Airbus’s engines.
Boeing tries market route to competing with Airbus 6 Feb 2018 The $200 bln U.S. giant may buy up to 90 pct of Embraer’s commercial-aircraft business. That would give Boeing effective control while leaving sensitive military hardware in Brazilian hands. It’s a better answer to the Airbus-Bombardier threat than pushing for trade tariffs.
Boeing needs Embraer deal to fly after tariff crash 26 Jan 2018 A U.S. trade agency surprisingly rejected calls by the aerospace giant and the Trump administration to slap duties on Bombardier’s C Series jet. It shifts the regional-airplane dogfight back to the marketplace, upping the pressure on Boeing to seal a tricky merger with Embraer.
Bull market lets activists see virtue in passivity 26 Jan 2018 Bill Ackman, who lost his fight with ADP, has taken a stake in Nike but isn’t pushing for change. Dan Loeb sat back as Honeywell’s new boss ignored his advice and beat his targets anyway. Even pushy hedge funds can be tempted to simply ride the waves when a rally lifts all boats.
GKN only needs half-baked defence to beat Melrose 17 Jan 2018 The serial acquirer has launched a $10 bln hostile bid for the UK engineering group. Melrose promises to boost margins and give its target’s shareholders 57 pct of the enlarged group. However, an independent GKN could create the same value by lifting profitability half as much.
GKN breakup defence is still on drawing board 12 Jan 2018 The UK engineer grappling with an accounting scandal rejected a $9.5 bln offer from serial acquirer Melrose. Its alternative plan of splitting itself in two makes sense and could deliver more value. But investors need more proof it can fix its business, and a clearer timetable.
Boeing’s stealthy Embraer approach has big aims 2 Jan 2018 The U.S. aerospace giant is considering joint ventures with the Brazilian planemaker rather than a takeover bid. That’s smart. A lower altitude should allow it to sidestep political and financial turbulence while forging more extensive links than rivals Airbus and Bombardier.
Boeing’s tie-up with Embraer brings co-pilot risk 21 Dec 2017 The $177 bln aerospace giant is in talks to acquire the $3.7 bln Brazilian jetmaker. It makes strategic sense, given rival Airbus’s deal with Bombardier. But Embraer’s government shareholder means the deal may come with a high premium and low returns.
Audit defect throws wrench in GKN re-engineering 16 Nov 2017 CEO-designate Kevin Cummings will leave the UK car parts and aerospace group after it unearthed more accounting problems at the unit he ran. The mess reinforces the case for breaking the company into two parts. Yet the governance vacuum makes quick fixes harder.
New U.S. approach can better rein in drone dangers 19 Oct 2017 The FAA will share oversight of the vehicles with state authorities under a promising test project. Conflicting federal and local rules have caused confusion, with courts adding to the uncertainty. Combining forces can help regulators contain risks in increasingly crowded skies.
Spare GE jet is symbolic target of Flannery sweep 19 Oct 2017 Scrapping a second plane that followed former boss Immelt around, just in case, is an easy sop for shareholders. The new CEO needs them on side as he mulls possible bigger changes at the $200 bln industrial giant, such as dropping long-held earnings targets or cutting dividends.
Even a distressed sale may not revive Bombardier 16 Oct 2017 The Canadian firm is weighing a sale or new investor for its aerospace division. That’ll be a tough task as its regional jet business is shrinking and U.S. tariffs threaten its bid to compete with Boeing. Bombardier’s cash burn points to a continued decline.
Honeywell puts Dan Loeb in his place 10 Oct 2017 The conglomerate is spinning off two small, low-margin risky businesses rather than the aerospace unit the activist had targeted. It’s a smarter way for new CEO Darius Adamczyk to improve returns without much pain, especially on top of the better margins he’s already producing.
U.S. plane spat morphs into unwinnable dogfight 27 Sep 2017 The UK joined Canada in threatening to punish Boeing after the Trump administration slapped duties on Bombardier’s flagship jet. Targeting aircraft subsidies is laudable, but Washington’s tough tactics, matched by Justin Trudeau and Theresa May, could shoot down all sides in flames.
Northrop plays on global angst with $7.8 bln deal 18 Sep 2017 The drone and B2 bomber maker is going ballistic by buying missile and satellite maker Orbital. Cost savings fall short of covering the all-cash deal’s premium. But with tensions growing over North Korea’s nuclear threat, the target’s interceptor business may be set to rocket.
United Tech breathes rarefied air to bulk up 5 Sep 2017 The conglomerate is paying $30 bln including debt for Rockwell Collins. The combination makes sense but, with a weak 5 pct return on investment, UTC is paying up for aerospace scale. Elusive revenue benefits or a lucrative breakup are needed to prove the deal's potential.
United Technologies’ avionics bid looks airworthy 30 Aug 2017 The conglomerate’s potential acquisition of Rockwell Collins should deliver enough cost savings to justify paying a reported $23 billion. Greater size also promises increased negotiating heft with Boeing and Airbus. Investors have good reason to clear this deal for takeoff.