Marks & Spencer does just enough to justify plan A 9 Jan 2014 Britain’s biggest clothing retailer surprised with a bad quarter in its key business, in spite of strong food and online sales. CEO Marc Bolland’s turnaround is proving a slog. But a 3.5 pct stock rally suggests investors feared the Christmas numbers would be even worse.
Flat sales at Sainsbury set high bar for Tesco 8 Jan 2014 It may appear an easy task to emulate a rival that is standing still. For UK supermarket retailers, hemmed in by intense competition, no growth is actually quite an achievement. Sainsbury’s shares trade at a discount to the inherent, if constrained, strengths being shown.
Asia is ripe for a brewers M&A brawl 6 Jan 2014 It’s a seller’s market in the last frontier for beer. The coming year may see new owners for Philippine brewer San Miguel, and South Korea’s Oriental Brewery. Carlsberg and Beijing Yanjing could make great partners too, if China’s rulers let market forces flow more freely.
Raise a glass to Graham Mackay, king of Big Beer 18 Dec 2013 The SAB chairman, who died at 64, used M&A and a London listing to create South Africa’s most successful multinational. But the man who kicked off global consolidation of the brewing business didn’t live to see its logical apotheosis – a deal with Anheuser-Busch InBev.
Australia nudges dairy saga toward a finish 17 Dec 2013 Saputo has raised its offer for cheesemaker Warrnambool to A$537 million, at a regulator’s prompting. It could prove higher than a rival bid by Murray Goulburn, and looks more deliverable. Barring a knockout counterbid, investors would do well to take Saputo’s cash.
Coca-Cola shakeup should help it preserve the fizz 13 Dec 2013 A reorganization of the $175 bln beverage giant’s North America unit could herald a separation of the bottling business it bought in 2010. Cost-cutting may be on tap, too. That would keep investors sweet on Coke as rival Pepsi nurses strategic plans and contends with an activist.
Private equity taps happy hour at Oriental Brewery 11 Dec 2013 AB InBev could pay $4.1 billion to buy back the subsidiary it sold to KKR in 2009. On a back-of-the-beermat calculation OB’s private equity backers could see a 34 percent annualized return. Even if the Belgium brewer abstains, local markets may support a similar valuation.
Food deal shows how investors eat up synergies 9 Dec 2013 Sysco’s $3.5 bln purchase of US Foods received a rapturous reception with the buyer’s stock surging by as much as a quarter, or $5 bln. Hefty cost savings help the merger math. With this sort of reaction to deals, acquirers’ animal spirits won’t remain suppressed for long.
Review: A no-nonsense recipe for retail success 29 Nov 2013 Having spent four decades building up Iceland, the UK frozen-food chain, Malcolm Walker makes retail sound pretty simple. A 215 mln stg fortune suggests he knows what he’s doing. Still, the many travails in his autobiography show how easily things can go wrong in the food business.
Metro cashes in on Russia before it’s too late 21 Nov 2013 The German retail giant is mulling a partial listing of its Russian business. Selling a minority stake in that attractive asset looks like a smart move. It could reduce the group’s debt and finance growth. But investors beware: the Russian economy is headed for a major slowdown.
Aussie dairy battle needs cheap debt to stack up 19 Nov 2013 Three bids in as many days have lifted the price tag for Australian dairy Warrnambool above A$500 million. Local cost savings and projections of China’s thirst for foreign milk help justify the frenzy. But the investment case also depends on low borrowing costs.
Shuanghui hits on recipe for meaty returns 15 Nov 2013 Take lukewarm U.S. pork producer Smithfield. Slather with debt, remove from the market then serve up almost immediately in a Hong Kong IPO. To ensure the new listing comes out golden, add the secret ingredient: investor exuberance over Chinese consumer stocks.
Aussie dairy battle in danger of overheating 14 Nov 2013 Bega Cheese hiked its offer for local rival Warrnambool to A$486 mln. That’s nearly double the dairy’s value before a bidding war erupted in September. Valuations depend on Chinese milk demand taking off. But with two other buyers still in the fight, the price could rise further.
Strong Sainsbury can take CEO question in stride 13 Nov 2013 The supermarket chain improved sales and profit in the first half, unlike UK peers. One of the few uncertainties is whether Chief Executive Justin King wants to prolong his 10-year reign. Now is as good a time as any for the board to nail down a smooth succession plan.
San Miguel could lure Kirin into Heineken trap 7 Nov 2013 The Philippine conglomerate may be mulling a sale or listing of its brewing arm. That puts Kirin under pressure to buy the 51 pct it doesn’t already own or risk losing a key part of its Asian business to a rival. It could prove expensive, as the Dutch brewer found last year.
China excitement stirs up Aussie milk frenzy 30 Oct 2013 Canada’s Saputo is battling rivals down under for control of A$470 million milk processor Warrnambool. Now Japan’s Kirin has paid a premium for a 10 percent blocking stake. The battle is another bet on China’s growing love for foreign dairy. But the price is looking rich.
Starbucks’ China price is driven by demand 22 Oct 2013 State television is upset the coffee chain charges more for a latte in Beijing than in Chicago. Import duties and real estate costs - and China’s managed exchange rate - may partly explain the gap. But it is Starbucks’ aspirational status in China that gives it pricing power.
Ferrero could be worth $25 bln 21 Oct 2013 The Nutella maker denied reports of a bid from Nestle and says it’s not for sale. Still, the family-owned firm boasts top brands, fat margins, scarcity value and emerging-market potential. Despite a huge price tag, one day it could fit well with the Swiss giant or another rival.
M&A could help Nestle tackle sales slowdown 17 Oct 2013 The Swiss food group is said to covet Ferrero, the maker of Nutella chocolate spread valued at roughly 10 bln euros. The Italian company says it’s not for sale. Yet it is easy to see why Nestle might want to do big deals. It can afford to buy its way out of a saggy sales profile.
Thai mogul emerges on top in supermarket swap 16 Oct 2013 Dhanin Chearavanont’s CP Lotus is selling the bulk of its loss-making Chinese stores to larger rival Wumart for HK$2.9 billion in a complex share swap. CP can focus on higher growth regions, while Wumart mops up competition. Both sides benefit, but the Thais win by a whisker.