Consumer Products and Services

Whitbread’s coffee spinoff is too slow

25 April 2018

The UK company is planning to hive off its Costa cafes less than two weeks after activist Elliott disclosed a 6 percent stake. That may lift the group’s undervalued shares and make the chain a bid target. But a 24-month timeline is too long for investors to wait for the takeaway.

Indian telecom tower M&A leaves room for more

25 April 2018

A union of Bharti Infratel and Indus Towers creates a $15 bln company with more masts than heavyweight rival American Tower. This paves the way for indebted telecoms backers, including Vodafone, to take out a special dividend or sell part of the merged group to a buyout firm.

Bookie investors misjudge odds in political casino

24 April 2018

William Hill, Paddy Power Betfair and GVC collectively lost 1 bln stg in value on reports Britain may cap betting-machine stakes and hike levies. That’s worse than feared, but not unimaginable given low UK gambling taxes. Smarter investors would have seen the writing on the wall.

Peugeot investors jump the gun on Opel turnaround

24 April 2018

The French carmaker’s shares trade at a premium to European peers despite its below-average operating margin. Investors are already counting on a turnaround at Opel, the loss-making business bought from GM last year. A German labour dispute means there’s room for disappointment.

Didi floors its way to a public listing

24 April 2018

The Chinese ride-hailing outfit may be steering toward an $80 bln IPO this year as Uber finds its way. Didi also is moving into Mexico, adding food delivery and exploring custom cars with the likes of Renault. It could be a bid to race to opening Hong Kong and Shanghai markets.

Takeda pushes its globetrotting ambitions too far

23 April 2018

The Japanese drugmaker led by a French CEO added cash to a slightly sweeter $60 bln bid for Irish rival Shire. Takeda's target is cheap, but the big premium will be hard to justify. The deal also would flood the market with shares and ratchet up debt. It's all a big stretch.

Bolloréxit sums up Vivendi’s sub-par governance

19 April 2018

Vincent Bolloré stunned investors by abruptly handing the French media group’s chairmanship to his son. The 66-year-old Vivendi shareholder may well linger, muddying accountability for group strategy. Corporate governance issues are familiar, but this is still an eye-opener.

P&G drug deal needs vitamin shot to persuade Peltz

19 April 2018

The U.S. consumer giant is paying 3.4 bln euros for the consumer arm of Germany’s Merck. For it to make sense P&G will have to crank up sales of Seven Seas vitamins while cutting out costs. Board member Nelson Peltz’s criticism of past acquisitions further raises the stakes.

Nestlé and Unilever switch focus to shopping lists

19 April 2018

The consumer giants reported strong sales growth in the first quarter; a welcome change after two years of sluggish demand. With share prices flatlining, though, a further shake-up of their brands is likely. There are growing signs of where both companies are looking to buy.

VW truck IPO may squander $20 bln opportunity

19 April 2018

The German carmaker might list its trucks and buses unit next year. The flotation could boost the group’s shares by nearly a fifth, if the market values the division more highly than the rest of it. Yet a partial listing and Volkswagen’s messy governance would limit the upside.

TSMC’s new chips hint at life after Apple

19 April 2018

Quarterly sales at the $210 bln chipmaker topped $8 bln, missing estimates. Weak iPhone sales and fizzling bitcoin prices probably weighed. Even so, TSMC is set to debut cutting-edge new semiconductors that will position it ahead of rivals as AI and autonomous cars take off.

India’s cash shortage may be charged to Modi

18 April 2018

ATMs in several states have run out of money amid a spurt in demand. Officials say there is no need to panic. Indeed, cash in circulation is back to where it was before Prime Minister Narendra Modi's bold experiment with large notes. That suggests bad planning is to blame.

Danone pasteurised debt gives novel way to go green

18 April 2018

Banks led by BNP Paribas will charge the French dairy group a lower margin on a 2 billion euro credit line if it hits social and environmental targets. Perversely, lenders would gain if Danone drags its feet. But shareholders now have a clear incentive to do the right thing.

China backlash could unravel 5G network effect

18 April 2018

Huawei's retreat and ZTE being cut off from U.S. vendors will slow telecom infrastructure development in both America and China. And given how instrumental the two companies are to 5G technology and the power of supply chains, the whole global rollout is likely to be impeded.

Starbucks’ anti-racism coffee break sets example

17 April 2018

After the arrest of two black men at a Philadelphia shop the $84 bln chain will shut some 8,000 U.S. outlets for an afternoon of racial-bias education. The swift response, perhaps costing $20 mln in lost latte sales, backs up Starbucks’ social goals and offers a lesson to others.

Tesla in pole position to win U.S.-China trade war

17 April 2018

Beijing has set deadlines to lift JV rules for foreign automakers. Ford and Daimler will be pleased, but Elon Musk's embattled $50 bln electric-car maker should benefit most. Freed to enter the biggest market without having to share technology, Tesla's risky strategy may pay off.

U.S. regulators ask if ZTE can hear them now

17 April 2018

The Commerce Department barred domestic companies from selling to the $20 bln Chinese telecoms equipment maker for years. It's a big blow given how much ZTE sources from the United States. Things could get worse depending on how fast political winds shift against it in Europe.

Widening net of China censors puts tech on notice

17 April 2018

Jokes and gay content are disappearing from the web. It's a fresh sign censors are policing beyond political discourse. For $25 bln microblog Weibo and peers, appeasing both users and regulators will get harder. It will make life tougher for China hopefuls like Facebook, too.

Coffee to go offers quick fix for Whitbread

16 April 2018

Activist Elliott controls 6 pct of the UK hotel and coffee chain and reckons a listing of its Costa brand would add 3 bln pounds of value. It’s a simple-seeming solution to Whitbread’s discount rating. Separating investor worries about the two parts of the business has merit.

Singapore ruling gives Uber deal yellow light

16 April 2018

Regulators have tapped the brakes on Southeast Asia's ride-hailing mega-merger. They won’t halt a deal with rival Grab but have limited data-sharing and driver exclusivity contracts, at least while they review. That’s an amber signal, and a sign of potholes ahead.