Divestment

John Malone wins most in Europe’s telco M&A whirl

28 February 2019

The cable cowboy’s Liberty Global is selling another business, this time to Swiss group Sunrise for $6.3 bln. As in Germany, Malone gets a premium for a sub-scale operation. The benefits for the buyer from bundling mobile, TV and internet services may be competed away.

Slimmed-down TomTom is now an alluring M&A target

22 January 2019

The Dutch company is selling a van-data unit for $1 bln, or more than half the whole group’s market value. That makes its core digital-map business look cheap. With Big Tech and auto giants hoping to dominate software for cars of the future, TomTom may struggle to stay solo.

GSK takes M&A steroids for strategic ailment

19 December 2018

The UK drugmaker will mesh its consumer health unit with Pfizer’s, gear it up and spin it off. That should leave more firepower for GSK’s weaker pharmaceutical division. Both businesses should be better off, if boss Emma Walmsley can invest wisely. That’s still to be seen.

Elliott’s best bet with Bayer is a breakup

10 December 2018

Paul Singer’s fund has held a stake in the $66 bln German conglomerate for over a year. Litigation fears have pushed the stock down 40 pct in that time. Convincing Bayer to sell its drug and consumer health units could create value, but means getting Singapore’s Temasek onside.

Twin threats crumple DS Smith’s success

6 December 2018

The 4.4 bln pound UK packaging company delivered a 32 percent surge in first-half operating profit. A boom in recycling and e-commerce suggests the firm can deliver more of the same. But trade war rumblings and an oversupply of paper are weighing on its share price.

Kier banks face spectre of HBOS-style flop

5 December 2018

The engineering group’s share price is near the level at which it needs to issue stock. Further falls could leave banks with shares, a rare event since the fiasco of HBOS in 2008. Brexit and government cuts don’t help. If the sector needs any more capital, it’s an ominous sign.

GSK looks like a better seller than buyer

3 December 2018

The UK drug giant is acquiring cancer specialist Tesaro for $5.1 bln and offloading its Horlicks unit to Unilever for about the same amount. It’s a neat way for CEO Emma Walmsley to reshape GSK. But the purchase will take years to pay off – and is much riskier than hot drinks.

Altice wins most from $2 bln fibre sale

30 November 2018

Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.

Smiths Group only partly lances its strategic boil

14 November 2018

The UK engineer is to hive off its medical arm. Creating daylight between the flatlining health unit and the faster-growing security and oil services bits could make it easier to sell. But unless Smiths can give more detail this looks more like buying time than creating value.

U.S. disposal helps clear Diageo’s sales hangover

12 November 2018

The booze giant is offloading cheap-and-cheerful drinks like Popov vodka and Black Haus schnapps to rival Sazerac for $550 mln. Forswearing discount spirits, where sales are declining, should give investors a clearer view of consumers’ demand for its more expensive tipples.

Private equity could scratch Nestlé skin-care itch

6 November 2018

The KitKat maker is selling a unit specialising in psoriasis and acne treatments. Rival consumer groups may be put off by the business’s tricky mix of products and low margins. Private equity firms, already piling into the dermatology sector, would make a more logical owner.

Naspers’ Vision Fund-lite carries less baggage

5 November 2018

The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.

KKR throws autos shareholders into a spin

22 October 2018

The buyout group is paying $7.1 billion for a Fiat Chrysler-owned supplier. The double-digit earnings multiple is a coup for new FCA CEO Mike Manley. The big premium to where the industry trades needs some justifying. But regular investors may also be too gloomy about the sector.

ABB belatedly succumbs to industrial revolution

19 October 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

Europe’s IPO investors get Brexit present

4 October 2018

Companies are rushing to list while stock-market valuations are rich and before Britain crashes out of the EU. The deluge means bankers have to price offerings modestly, and investors can afford to be picky. Hairier issuers, like Aston Martin or Funding Circle, face a bumpy ride.

Fiat car-parts sale needs private equity mechanics

3 October 2018

The carmaker may spin off or sell its Magneti Marelli unit. Handing it to shareholders would let them keep any upside. But the outlook for parts makers is mixed, and valuations low. Selling to the likes of KKR makes more sense, even if CEO Mike Manley has to accept a price cut.

Saudi-Clariant chemical deal is murky concoction

18 September 2018

The Swiss group is setting up a joint venture with 25 pct shareholder Saudi Basic Industries. At the same time SABIC will contribute a new Clariant CEO and four board directors. Though the venture should make sense, the company’s governance becomes more complicated.

Naspers takes first step to shrinking Tencent gap

18 September 2018

The South African group is valued at a hefty discount to its $120 bln stake in the Chinese internet giant. Floating its African TV unit should therefore provide some relief to frustrated investors. To unlock more value, though, Naspers may need to shed its remaining operations.

Investec fund float could attract predators

14 September 2018

The Anglo-South African financial group is listing its asset management arm in London. Decent growth and increased focus should support a healthy valuation. With assets of 109 billion pounds, it may also make a choice morsel for a bigger rival.

Chinese $5 bln winter sports bid is hard to beat

11 September 2018

Fujian-based Anta has approached Finnish ski-wear maker Amer. The offer values the group at a hefty 17 times EBITDA. Anta’s need to fend off U.S. peers in its home turf suggests it will pay more than any rival. Still, the target’s share price suggests investors aren’t convinced.