Conglomerates

Fossil-fuel slowdown spreads pain at GE and beyond

7 December 2017

The conglomerate is laying off 12,000 people in a power division that lights up 30 percent of the world. It blamed overcapacity amid a shift from coal and gas to renewables. Other divisions closely tied to fossil fuels are also ailing. GE’s woes suggest a wider shakeout ahead.

Wanda’s asset shuffle buys brief Beijing reprieve

5 December 2017

The indebted Chinese conglomerate is shuffling assets around, including a $470 million cash injection from its founder, as officials pressure firms to deleverage. The cash will help pay down $1.7 bln in offshore loans, but it will take more to escape the government penalty box.

Uber backers face head-on collision with greed

28 November 2017

SoftBank is offering to buy shares in the ride-hailing firm at a $48 bln valuation. Even with a 30 pct markdown to the last fundraising, investors could cash out and make many multiples of their money. The prospect of a $500 bln colossus, however risky, will cloud the thinking.

Toshiba’s fresh funds provide for hard reboot

20 November 2017

The ailing Japanese group is raising $5.3 bln, or nearly half its market value again, by selling new stock. That ensures it avoids delisting. Buyers must see value in Toshiba’s residual interest in memory chips, plus the potential for turnaround elsewhere.

P&G proxy fiasco is black mark on CEO David Taylor

15 November 2017

Five weeks after the Tide and Pampers maker triumphantly declared victory in keeping Nelson Peltz off its board of directors, an independent arbiter says the activist won. It's hard to conjure up a better illustration of P&G's insularity than its handling of the whole affair.

GE’s shaman exorcises ghosts of false expectations

13 November 2017

It doesn't take much imagination at work to grasp John Flannery's approach to the $178 bln conglomerate. He has halved the dividend, cut earnings guidance and questioned GE's portfolio of industrial assets. Next up is a total restructuring of GE's bloated, under-engaged board.

Indian proxy firm successfully hits a nerve

7 November 2017

ITC, the $50 bln hotels-to-tobacco group, is alleging defamation over criticism of its board. Institutional Investor Advisory Services didn't persuade shareholders to vote against the chairman's pay. The case nevertheless is a turning point for scrutinizers of Indian governance.

GE has become the ultimate industrial lightweight

23 October 2017

Earnings that even new CEO John Flannery called “horrible” put fresh pressure on a stock down over 25 pct this year. The last surviving original Dow member now has by far the lowest weighting of any share in the index. It’s an embarrassing sign of the storied firm’s troubles.

P&G’s ho-hum quarter a gut check for management

20 October 2017

The $230 bln diapers-to-soap conglomerate contorted to keep Nelson Peltz off its board. Though it modestly beat quarterly earnings expectations, its underlying issues haven’t changed. Boss David Taylor is under pressure to make headway with full accountability for any stumbles.

Spare GE jet is symbolic target of Flannery sweep

19 October 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 October 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 October 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.

GE needs Nelson Peltz’s help – and takes it

9 October 2017

The $200 bln U.S. industrial giant, now with a new CEO, still seems unable to get people excited about owning its shares. A board seat for the activist investor’s top lieutenant may help. It’s a contrast with P&G, which is resisting Peltz – potentially to shareholders’ detriment.

Cox: P&G counting on an investor electoral college

6 October 2017

There's no strong reason for the insular consumer-goods titan to deny Nelson Peltz a board seat. Hedge funds will back him, but as in U.S. elections only half the retail shares may vote. That leaves Vanguard, BlackRock and State Street to play Wisconsin, Ohio and Pennsylvania.

Siemens and Alstom put European engine on track

26 September 2017

The German firm is merging its rail unit with its French rival. It's a deal that has long made strategic sense but stumbled over turf issues. That the two countries are pulling it off after Angela Merkel’s election setback suggests fresh steam for the continent's political unity.

United Tech avionics bid may start bigger dogfight

7 August 2017

The $95 bln conglomerate is mulling an offer for Rockwell Collins, right after Boeing’s margins-sapping entry into the business. Honeywell is under pressure to sell its unit. The combination of earnings and activist pressure leaves aviation executives with some tough choices.

Brazil pork mongers find comfort in flip-flops

31 July 2017

Selling trendy sandal maker Alpargatas to wealthy banking families will help meatpacking-to-pulp firm J&F pay a huge fine for bribing politicians. The original purchase, from a company also embroiled in scandal, is being probed by authorities too. It's a Brazilian microcosm.

Free phones power Mukesh Ambani’s tech ambitions

21 July 2017

India's richest man has seriously upped the ante in the country’s mobile war. His Reliance Jio network is offering free internet-enabled handsets, potentially reaching 500 mln more people. A strong oil refining business means he can worry about recouping the investment later.

Peltz goes for the close shave at Procter & Gamble

17 July 2017

Unlike his last proxy fight at DuPont, the activist is taking a more surgical approach, lobbying for one board seat at the $223 bln razors-to-detergent conglomerate. Trian is also supporting management and not calling for a breakup. Shareholders would be daft to turn him down.

Refiner uses crude tactics in Japanese M&A tussle

4 July 2017

Idemitsu’s bosses are trying to clinch a merger with a rival, over objections from Idemitsu’s own founding family. Diluting the family through a $1.2 bln share sale is a value-destructive workaround. The move reflects corporate Japan’s disdain for investor rights.