Conglomerates

P&G’s razor burn calls for radical salve

23 January 2018

The Pampers-to-Gillette maker’s sales grew 3 pct in the second quarter. But that’s in spite of continued attrition in its grooming division. P&G is selling more blades but making less money. As activist Nelson Peltz joins the board, P&G’s razors look increasingly disposable.

GE’s legacy losses reinforce case for breakup

16 January 2018

A $6.2 bln charge relating to reinsurance - a business the company exited over a decade ago - shows the challenge of managing a conglomerate. CEO John Flannery is struggling to shrug off the past and turn to the future. At least he’s open-minded enough to consider a GE carve-up.

Telecoms IPO would be a smart step for SoftBank

15 January 2018

Floating a Japanese cash-cow subsidiary could unlock $18 bln, which boss Masayoshi Son could use for yet more bold bets on new technology. The move might help lift the unit’s performance. It could also help address the persistent discount the market applies to SoftBank shares.

HNA’s hard job: put the M&A machine into reverse

12 January 2018

The acquisitive Chinese group has been buffeted by regulatory setbacks and signs of financial stress. Now trade in two key listed units in China is halted, suggesting a corporate reshuffle could be looming. HNA will find shrinking back to health tougher than breakneck growth.

Buffett’s next act is a disappearing trick

10 January 2018

The boss of $500 bln Berkshire Hathaway has promoted two deputies in a nod to succession. Replacing a legend is nigh on impossible, so it would make sense to split the investor’s job into several. Buffett’s task now is to fade away gracefully and let his successors run the show.

Can Nelson Peltz clean up at P&G?

8 January 2018

Now that Trian Management founder Nelson Peltz is on the board of consumer-goods giant Procter & Gamble, Breakingviews has created a calculator to show how the market value of the $230 billion group could increase if revenue growth and margins improve.

Peltz may go from nice to nasty at P&G

8 January 2018

The activist, now on the $230 bln consumer-goods giant’s board, has said P&G should slash costs and steal market share. That may boost the stock by over 10 pct, Breakingviews calculates. To get much more, Peltz might suggest a deeper cut: offloading razor maker Gillette.

Guest view: Proxy fights as commonplace in 2018

5 January 2018

Though 2017 was the year of big-time contests like Trian versus P&G, get ready for more contentious and expensive battles for control of Corporate America, argues Columbia Business School's Wei Jiang. She offers four key factors that boards and investors should consider.

Wanda’s sports spinoff would help trim flab

5 January 2018

The Chinese conglomerate could float sports assets acquired in haste, including a sports marketer and a triathlon organiser, Reuters says. Fresh funds could help cover offshore debts. Streamlining might also persuade regulators to let the main property unit list onshore.

HNA may have to check out of some big deals

18 December 2017

A bond buyback meant to shore up confidence was quickly offset by a bank alleging “temporary liquidity difficulties”. HNA says this is not the case. Even so, rethinking an attachment to trophy assets such as stakes in Hilton and Deutsche Bank could help calm the market’s nerves.

Control could justify tycoon’s pricey Saigon pint

15 December 2017

A $4.6 bln bid from Charoen Sirivadhanabhakdi for 51 pct of Sabeco, maker of Bia Saigon, relies on political influence and a pliable local partner. That might help the ThaiBev owner to skirt foreign ownership rules, and wring out efficiencies to stack up a frothy valuation.

Ambani is programmed to punch through $100 bln

13 December 2017

Mukesh Ambani's Reliance Industries could be India's first mega-cap stock. His refineries are at the mercy of oil prices, but his bid to dominate Indians’ digital lives is generating excitement. A potential listing of his upstart telecoms business will add to the upward momentum.

Anti-LBO activist could benefit Toshiba investors

12 December 2017

A hedge fund says the Japanese conglomerate need no longer divest its $18 bln memory unit after raising $5 bln in equity. It has a point: the deal was a fire sale. A quick halt is unlikely, but a U-turn would be possible and desirable if the transaction doesn’t close by March.

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.