Defence

DJI is a more elusive U.S. target than Huawei

16 Dec 2021

Washington is putting a bigger squeeze on the Chinese drone maker by blocking American investment in the company. But unlike Huawei’s telecom gear, DJI products are widely used in the United States, including by police. Western rivals are tiny, making an outright ban tricky.

Deal crackdowns boost buyers without baggage

29 Oct 2021

U.S. merger watchdog Lina Khan is stepping up promises to thwart serial acquirers’ deal ambitions. What’s bad for the industry titans in the crosshairs, though, could be a boon for buyout barons and lawyers dreaming up novel ways to deal with the roadblocks.

Capital Calls: U.S. deal watchdog, Italian IPO

5 Oct 2021

Concise views on global finance: Blog posts from the FTC’s competition chief reveal plans to go way bigger when extracting concessions from merging companies; Italy's $5 billion security group Leonardo is taking a second run at listing its DRS unit in the United States.

Capital Calls: Biden channels Trump on China

16 Sep 2021

Concise views on global finance: After losing an Australian submarine deal, the French accused the U.S. president of acting like his predecessor. They’re right that there’s bipartisan antipathy towards Beijing in Washington. They’d better hope the similarity ends there.

Capital Calls: UK interventions, Post-virus reset

7 Sep 2021

Concise views on global finance: U.S. bidder TransDigm’s withdrawal from the $8.7 bln race for Meggitt removes a tricky decision for the government; Boris Johnson’s new proposals will address social care but not generational wealth divides.

Meggitt arm-wrestle is test for UK interventionism

3 Sep 2021

TransDigm’s 7 bln pound approach for the aerospace engineer is higher than rival Parker Hannifin’s but uses way more debt. PM Boris Johnson has been active in probing M&A that could affect jobs or national security. But intervening on leverage grounds would be a new departure.

Capital Calls: Pfizer M&A, Uber driver status

23 Aug 2021

The drugmaker has agreed to acquire Trillium Therapeutics for $2.3 billion, looking to its broader post-coronavirus strategy; a California judge has struck down a law exempting tech companies from treating drivers as full employees, complicating their push to keep costs down.

UK defence buyout tests government poker hand

16 Aug 2021

Private equity-backed Cobham is offering a 63% premium for rival Ultra Electronics. To get Britain’s approval for the 2.6 bln pound deal, it will make commitments on jobs and research. If those pledges are robust, owner Advent will have to work hard to earn a good return.

Shareholders exposed by British defence raid

23 Jul 2021

Some UK investors complain private equity buyers are stealing listed groups. A mooted 2.6 bln pound bid for Ultra Electronics by Advent-owned Cobham suggests otherwise. The buyer needs chunky cost savings to make it work. A 62% premium implies the market misjudged Ultra’s value.

Capital Calls: Sabers down for Project JEDI

10 May 2021

Concise views on global finance: The Pentagon may end the $10 billion cloud project to consolidate U.S. military data after exhausting worse options.

Capital Calls: Christine Lagarde, Bernie Madoff

14 Apr 2021

Concise views on global finance: The European Central Bank president’s quest for inflation will take a while to achieve its goal; investor gullibility will live on after the death of the Ponzi schemer in a U.S. federal prison.

Capital Calls: LVMH surges back to full health

13 Apr 2021

Concise views on global finance: The 300 billion euro luxury conglomerate’s first-quarter sales surpass pre-Covid-19 levels.

Babcock CEO’s reset comes with valuation upside

9 Apr 2021

David Lockwood may soon unveil a writedown at the 1 bln pound UK engineering group, which is also saddled with heavy debt. Those concerns obscure the relatively promising trend of UK defence spending. Lockwood’s CV offers hope of a cleanup – and significantly higher share price.

Capital Calls: Defence IPO, ViacomCBS and GameStop

24 Mar 2021

Concise views on global finance in the Covid-19 era: Italy’s Leonardo postpones the initial public offering of its U.S. unit; ViacomCBS and GameStop's rising stocks give them both a chance to raise fresh cash.

KKR finds lucrative new exit: German taxpayers

17 Dec 2020

The buyout firm is selling 25% of defence supplier Hensoldt to the government, which wants to block foreign buyers. Such trades usually incur a discount, but at $550 mln KKR is getting a rich premium. Dealing with increasingly activist states brings opportunity as well as risks.

BAE’s U.S. pivot can help defuse Saudi discount

20 Jan 2020

The $27 bln UK defence firm has bought satellite navigation and radio businesses from merger partners Raytheon and United Technologies. The $2.2 bln price looks fair. Greater sales in America, and a lesser reliance on Riyadh, should boost the Typhoon-maker’s depressed stock.

UK defence buyout is Exhibit A for cash glut

25 Jul 2019

Private-equity firm Advent and Blackstone funds are buying Cobham for 4 bln pounds, larding up to 2.5 bln pounds of leverage onto a company that has worked hard to have essentially none. It suggests both equity and debt investors have plenty of money and limited opportunities.

American M&A makes excess great again

28 Jun 2019

U.S. deals jumped 19% in the first half even as activity ebbed in Europe and Asia. Topping the list are pricey purchases by AbbVie, Bristol-Myers and Occidental, plus Raytheon’s questionable merger with United Technologies. Most buyers’ owners will regret their CEOs’ ambitions.

Viewsroom: When dealmaking gets difficult

13 Jun 2019

Raytheon and United Technologies’ planned $114 bln tie-up raises questions about strategy, cost cuts and executive overreach. It’s prompted their shares to tank and activist Bill Ackman to oppose it. And Fiat Chrysler and Renault’s mooted merger has crashed. Can they salvage it?

Saudi Arabia will feel Trump’s Iran slap too

22 Apr 2019

The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.