Clean pork powers $4.7 bln China-U.S. meat deal 29 May 2013 Fluorescent pork headlined one PRC food scare. Shuanghui’s planned purchase of Smithfield could help prevent such debacles. For one thing, untainted pigs are cheaper to produce in the U.S. and import to China. As long as the trade goes that way, U.S. watchdogs needn’t worry.
Frackers ignore German beer angst at their peril 24 May 2013 Germany’s brewers want to make fracking verboten. In the U.S., the gas drilling technique’s economic benefits trump environmental concerns. Whether it’s the British countryside or German lager, threats to cultural touchstones will hold back a similar boom in Europe.
SABMiller faces expectations on a daunting scale 23 May 2013 The CEO reins at the global brewing house are changing hands with a commendable lack of fuss. The evolving strategic objectives are also sound and the company is delivering financially. But expectations, as measured by the equity valuation, leave precious little room for error.
So what if LVMH sought control of Hermes? 20 May 2013 The French market regulator says the drinks-and-luxury group stealthily tried to take control of the exclusive leather goods maker in 2010. LVMH seems to have mostly used regulatory loopholes. But if these exist, it is hard to blame the company for exploiting them.
Danone gets China dairy deal, but not the cream 20 May 2013 The French group scrapped talks with milk producer Mengniu five years ago - just in time to avoid 2008’s melamine scandal. Since then, Mengniu has changed its supply chain and become state-owned. Danone’s new $417 million investment looks safer, but the terms look tougher.
Morrisons’ click with Ocado makes M&A less likely 17 May 2013 The UK supermarket has gone for a joint venture with online Ocado rather than a full-blown bid. It will help Morrisons, a web laggard, catch up with rivals. A short squeeze explains most of the Ocado share surge, but the smaller firm has won surprisingly advantageous terms.
Sainsbury’s slow approach to banking makes sense 8 May 2013 The supermarket group is buying out its Lloyds joint venture, but it is still shying away from offering current accounts. That might seem too timid, but the caution is justified while Sainsbury’s waits to see if efforts to remove key barriers to entry in UK banking pan out.
Paul who? Anonymity marks out an exceptional boss 7 May 2013 The chief executive of Diageo, the Johnnie Walker drinks company, is retiring after 13 years at the helm. Shares did nothing on the day. The true scale of Paul Walsh’s achievement will become clear if the departure still goes virtually unnoticed in the medium to long term.
PepsiCo resistance against activists looks futile 3 May 2013 Investors with a hankering for breakups have taken stakes in the $128 bln snacks and drinks giant. A split in the businesses would be straight out of their standard playbooks. And Nelson Peltz’s success at Cadbury and interest in food biggie Mondelez suggest bigger ambitions.
Salmon mega-deal is hard to swallow at this price 2 May 2013 M&A is reshaping the seafood industry. Fresh from another deal, the world’s largest fish farmer wants to gobble up a second smaller rival. At $1.7 billion, however, Marine Harvest’s hostile bid for Cermaq looks low. The Norwegian predator may need to offer more.
Thai tycoon rediscovers joy of debt in $6.6 bln bid 23 Apr 2013 Fresh from the leveraged purchase of a stake in insurer Ping An, Dhanin Chearavanont is borrowing $6 billion to buy cash-and-carry group Siam Makro. For Thailand’s richest man, a combination with his convenience stores makes sense – as long as Asia’s boom keeps the cash flowing.
Tesco’s short-term pain could yield long-term gain 17 Apr 2013 The UK’s biggest retailer saw annual profit dip for the first time in 20 years, and shuttered its disastrous U.S. foray. Yet it’s better to kitchen-sink now than later. And if a facelift for its UK stores improves sales, Tesco could return excess cash to investors in 2015.
Bart Becht’s $10 bln coffee run has dash of Buffett 12 Apr 2013 The former Reckitt chief is leading a buyout of D.E Master Blenders 1753, the Douwe Egberts coffee house. The hot drinks world should get a jolt. Like Warren Buffett’s recent mega-bid for Heinz, this deal mixes consumer goods, cheap debt and billionaire backers.
Sainsbury’s cunning "no horse" strategy pays off 19 Mar 2013 Unlike most peers, the UK supermarket didn’t find equine DNA in its food products. Its reward was a 3.6 pct jump in like-for-like sales in the fourth quarter. If Sainsbury can also deal with a squeeze on real UK incomes and price wars, it could deserve more investor support.
Morrisons is right to keep its Ocado powder dry 14 Mar 2013 The UK grocer is way off the pace in the online market. Buying Ocado could help, but with a fresh 20 pct hike the stock is up 180 pct since November. Morrisons needs the Web-based retailer’s knowhow, rather than loading up with M&A debt, to get where it needs to be.
Ethical economy: Obesity and the unhealthy economy 13 Mar 2013 Why have average weights been increasing for a century? Because more food is available and because food producers are determined to sell as much of it as possible. Why has obesity become a public health problem? Because people lack the willpower to stop when it’s good for them.
Carrefour’s "headless duck" flaps its wings 7 Mar 2013 Taking over last year, CEO Georges Plassat described the floundering retail giant as a “canard sans tête”. Annual results reflect the impressive recovery since then. Economic gloom and shifting shopping fashions are worrying. But there’s scope to achieve more.
Heinz deal suggests Big Food deserves a fresh look 22 Feb 2013 Strong brands and steady margins give food-makers’ strong finances a very long shelf-life. So makers of sauces, spreads and cereals may offer hidden value for patient investors. Warren Buffett-style bid or not, ConAgra, Danone, General Mills and others look cheap.
Market renaissance dethrones would-be debt kings 21 Feb 2013 The crisis in Europe put top-rated U.S. corporate debt on something of a safe-haven par with sovereign issuers. The return of big buyouts like Heinz and Dell and rising U.S. Treasury yields leave these bondholders vulnerable to big losses. Risk-free is now and forever a myth.
Heinz deal shows value of ultra-long investing 19 Feb 2013 Berkshire Hathaway and 3G Capital are pouring on financial sauce unpalatable to others. Dividends and debt will eat up much of Heinz’s cash, meaning it could take a decade for the $28 bln deal to produce a decent return. It’s the kind of dish that’s definitely an acquired taste.