Caterpillar gets harsh M&A lesson in Japanese 25 Jul 2016 The earth-moving giant made a badly timed push into mining with the near $9 bln takeover of Bucyrus in 2011. Now Japanese rival Komatsu has snared counterpart Joy Global for less than half that. Komatsu's longer-term view gives its dealmaking more chance of unearthing treasure.
Review: Trump foretold his own grander artifice 22 Jul 2016 Despite recent misgivings by its ghostwriter, "Art of the Deal" is a useful volume to revisit as the Republican convention points to the November election. The blustery façade even in 1987 masked a dearth of substance. Potemkin showmanship was, and is, Trump's greatest skill.
Elliott shows Pulte founder how activism is done 21 Jul 2016 The pushy investor has convinced the $7 bln U.S. homebuilder to add three board members, cut investment in new land and buy back shares. Elliott's constructive engagement is in stark contrast to founder William Pulte's ham-fisted campaign against his company's soon-to-depart CEO.
Putin is slipping into Crimean economic sinkhole 14 Jun 2016 Russia’s struggle to build a bridge link to Crimea is a microcosm of President Vladimir Putin’s problem: his annexation carries high costs but is yielding meagre benefits. Public discontent risks flaring before September’s parliamentary elections and may spur a new crackdown.
Zoomlion deals fresh blow to China M&A credibility 27 May 2016 The Chinese machinery-maker has walked away from a bid for U.S. rival Terex. After other high-profile failed deals, this further dents the prospects for other mainland bidders eyeing Western targets. At least Zoomlion’s own finances will be a bit more robust.
Chernobyl is symbol of shaky EU-Ukraine ties 26 Apr 2016 Thirty years after the disaster at the nuclear power station, EU money has helped build a structure to contain further reactor fallout. But Ukraine will have to sort any future issues by itself. Efforts to bring Kiev and Brussels closer suffer from a similar risky dynamic.
Homebuilder spat highlights founder-activism risk 12 Apr 2016 The push by Pulte’s founder and largest shareholder to oust the CEO is backfiring. His case looks odd, and the board and investors support the boss. Some poor judgment on corporate governance isn’t helping Pulte’s cause either. Such fights are best left to professionals.
Buying Terex could make Zoomlion too big to fail 4 Apr 2016 As China’s construction boom has turned to bust, the machinery-maker’s profit hit a 15-year low. Sealing the $3.4 bln purchase of its U.S. rival looks designed to raise Zoomlion’s national profile and secure access to credit that may allow it to muddle through the downturn.
Zoomlion’s U.S. tilt shows power of state support 28 Jan 2016 The Chinese machinery maker’s $3.3 bln approach to rival Terex defies financial logic, but could make political sense. Beijing makes no secret of its desire to build global brands. Giving Zoomlion the green light suggests it has official backing to be one of China’s flagbearers.
Wolseley follows Glencore into equity market funk 29 Sep 2015 Shares in the 10 bln stg UK-listed building products group sank 11 pct, just one day after the miner-cum-trader’s stock fell 30 pct. Each company has its challenges, but the stock moves look exaggerated. For both, the most serious threat looks to be skittish investors.
Finns seize the moment in $6.2 bln crane deal 11 Aug 2015 Finland’s crane maker Konecranes is joining forces with U.S. peer Terex in an all-share merger. The deal stacks up strategically, but the timing is opportunistic for Konecranes. Its shares are up 23 percent in a year, while much bigger Terex has lost 40 percent.
Chicago toll road owners may avoid highway to hell 21 Jul 2015 Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.
U.S. homebuilders pour $5 bln slab of common sense 16 Jun 2015 Standard Pacific and Ryland have unveiled a purported merger of equals that actually approximates one. Investors even pushed both stocks up over 5 pct on Monday. The new group needs help from housing markets – but if it’s approved, the deal looks like a solid foundation.
Cockroaches scuttle out from Lumber Liquidators 29 Apr 2015 The flooring retailer says the U.S. government will seek criminal charges for importing illegally sourced wood, its chief financial officer is leaving and preliminary tests showed high levels of formaldehyde in its products. More nasty surprises may lurk beneath the floorboards.
Holcim scores clear victory in Lafarge deal 20 Mar 2015 The Swiss cement maker has reset deal terms with its French partner. That’s fair – the new exchange ratio keeps the tie-up a merger of equals. But Holcim has also managed to veto Lafarge’s Bruno Lafont as CEO. Lafarge’s concession suggests its shareholders are anxious for a deal.
Lafarge-Holcim merger can be rescued as takeover 16 Mar 2015 The European cement makers disagree about the financial terms and governance of their planned tie-up. A “merger of equals” has foundered yet again. To keep the deal’s benefits, the way forward would be for Lafarge to agree to be bought for a suitable premium.
Holcim can push for more in Lafarge tie-up 13 Mar 2015 The Swiss cement group is outperforming its French rival, creating cracks in their $44 bln union. A special dividend or higher exchange ratio could fix matters. That is more likely to happen than deal failure, given that both sides would suffer if it fell apart.
Armstrong flooring spin suggests breakup ceiling 23 Feb 2015 Investors typically roll out the welcome mat for corporate splits. Yet the $3 bln building materials group’s shares were nearly as flat as hardwood boards after it revealed plans to house its two units under separate roofs. Financial engineering can’t cover up every crack.
CRH’s $7.4 bln buy reveals M&A tolerance 2 Feb 2015 It’s a big bet. The Irish building group will increase leverage – even with a big equity issue – to buy surplus assets from Lafarge worth a third of its market cap. CRH got sucked into an auction too. Yet investors cheered. It’s how things work in a low-return, low-growth world.
U.S. housing demand is building 26 Dec 2014 The post-crisis rebound boosted home prices 25 pct even as sales and construction lagged. Increasing household formation, job creation and easing credit look set to give the market another leg up, despite rising interest rates and the headwind of sliding affordability.