Divestment

Son’s largesse may finally help SoftBank investors

14 September 2020

The CEO is selling chip group Arm to Nvidia for little more than he paid in 2016. It’s a poor return for the Japanese group’s investors during a tech boom. Yet if Son decides to take SoftBank private, as news reports suggest, shareholders could cash out while valuations are high.

Italy is fumbling as striker and referee on Borsa

11 September 2020

Rome is tipping the scales for Euronext’s Milan bourse bid via its sovereign fund, frustrating other bidders. LSE will struggle to freely pick a winner in a race including Deutsche Boerse and SIX. State meddling isn’t new, but this deal may further raise Italy’s cost of capital.

Rolls-Royce self-harms by selling family silver

27 August 2020

The British jet-engine maker wants to offload its Spanish turbine-blade unit to patch up its Covid-hit balance sheet. Creditors will be as gleeful as shareholders are glum. If Rolls survives the crisis – and that’s an increasingly big if – it will be with a permanent limp.

Continental spinoff can trigger overdue auto M&A

5 August 2020

The $20 bln Frankfurt-listed mobility company wants to separate its engine division, which might be worth $4 bln. That may hasten a union with Schaeffler, in which the eponymous German family also holds a big stake. Faced with a downturn, rivals like Valeo could soon follow suit.

Tricky bidding war brews over LSE’s Italy bourse

31 July 2020

The London exchange may sell Borsa Italiana or the unit’s stake in the MTS bond trading platform to win EU approval for its $27 bln Refinitiv bid. Likely buyers Euronext and Deutsche Boerse would find themselves in a messy three-way tussle if Rome weighs in with a domestic bid.

Centrica sale stresses scale of CEO repair job

24 July 2020

Shares in the UK utility jumped 20% after it offloaded its U.S. arm to rival NRG Energy for $3.6 bln. The cash helps CEO Chris O’Shea lower debt and a pension deficit which together total 4 times estimated 2021 EBITDA. Declining earnings still make it hard to restart dividends.

Takeda feeling uncomfortable Shire side effects

13 July 2020

The Japanese drugmaker is near a deal that would get it to a $10 bln divestiture target 18 months after buying its Irish rival for $62 bln. Promised cost savings are materialising and debt slowly shrinking. Weak stock performance under boss Christophe Weber suggests he overpaid.

BP’s $5 bln chemicals sale is easy bridge to burn

29 June 2020

The UK oil major is offloading its remaining petrochemicals assets to privately held Ineos. Selling out of a growth area for an unspectacular price would usually seem like a strategic goof. But BP was a small player, and CEO Bernard Looney needs cash for his zero-carbon pivot.

AT&T game division sale is M&A in newb mode

15 June 2020

The telecom giant is mulling an auction of the unit behind Mortal Kombat. The timing is right – video game makers are ascendant – and a mooted $4 bln comes in handy to pay down debt. The harder move is figuring out what to do with other, bigger assets like DirecTV.

Nestlé water sale would flush out some old habits

11 June 2020

The food giant may offload some North American brands like Poland Spring, with sales of $3.6 bln. That’s a good start. Bottled water is a potent symbol of anti-sustainability and marketing spin. Selling less of it would help CEO Mark Schneider show he’s turning the page.

Thyssenkrupp’s ‘bad bank’ needs speedy euthanasia

19 May 2020

The ailing German conglomerate is carving out loss-making units it can either sell or shut down. Such frank self-assessment is a solid step towards recovery. But with 2020 losses set to dwarf last year’s 400 mln euros, the quicker they’re put out of their misery the better.

BT’s misery puts new gloss on old selloff idea

15 May 2020

The UK phone giant is considering offloading part of its $24 bln Openreach network unit, the FT says. CEO Philip Jansen and his predecessors resisted a split. But he urgently needs cash to boost fibre broadband, and a sale could lift BT’s shares from this week’s decade lows.

The Agnellis move from hunting to hunkering down

13 May 2020

With a planned $9 bln cash windfall from selling PartnerRe and fat dividends from merging Fiat with Peugeot, the Italian billionaire family was set just months ago for a global, diversification shopping spree. Exor is a case study in how quickly the pandemic shifts fortunes.

Imperial sale shows cigars’ soggy luxury status

27 April 2020

Tobacco group Imperial Brands sold premium stogies like Montecristo to undisclosed buyers for $1.4 bln. A low valuation of 12 times EBITDA fits with tobacco products’ niche appeal, and the uncertain virus hit. Other disposals needed to meet a 2 bln pound goal may be even harder.

Hoarding to extend sell-by date of tired brands

17 April 2020

Consumers stockpiled pantries and freezers with long-life grub, boosting dowdy products like frozen Hot Pockets. Unilever and Nestlé had been tilting towards higher-end brands. Lockdowns will force CEOs and investors to reconsider the value of what’s in their cupboards.

Prudential’s U.S. listing throws spotlight on Asia

11 March 2020

CEO Mike Wells plans to sell a slab of the UK insurer’s Jackson unit. It’s the second stage of a breakup, and partly satisfies activist Dan Loeb’s call for a full split. But any meaningful boost in the $37 bln company’s value depends on investors reassessing its Asian business.

Tesco’s Asia retreat seals humdrum UK future

9 March 2020

The retailer sold its Thai and Malaysian units for $10.6 bln. The price of 12.5 times EBITDA suggests CEO Dave Lewis prioritised a fast sale. Investors will pocket a 5 bln pound special dividend. With a clear focus on its dominant British business, Tesco will be safer but duller.

Agnellis best the French in $9 bln reinsurer sale

4 March 2020

Covea is paying a 38% premium over book value for PartnerRe. That’s more than Exor paid four years ago and the same price mooted three-plus weeks ago. Since then, rival insurers have tumbled in value. Covea’s mutual structure looks to give it incentives to misallocate capital.

Dan Loeb kicks on open door with Pru breakup plan

24 February 2020

The outspoken investor has called for $47 bln UK insurer Prudential to carve itself up. There’s plenty of value to be unlocked by separating the fast-growing Asian business from the sleepier U.S. retirement unit. An open-minded board means Loeb won’t have to shout too loudly.

Alstom’s M&A detour has lower chance of derailment

17 February 2020

The French train maker is paying $6.7 bln for Bombardier’s locomotive unit, after its preferred deal with Siemens was blocked. Bulking up can counter the threat of China’s CRRC. Success hinges on punchy synergies and a green light from the sticky antitrust signal box in Brussels.