M&A advisers get a lot of Valentine’s Day love 14 Feb 2013 Cupid’s two big deals alone, Heinz and American Airlines, required the services of two dozen banks and law firms. Some $36 bln of corporate hugs on Thursday pushed the 2013 global deals tally 17 pct ahead of where it was a year ago. Hearts must be racing across Wall Street.
Heinz deal gives taste of new buyout secret sauce 14 Feb 2013 Private equity firm 3G is swallowing the ketchup maker for $28 bln with Warren Buffett’s help. In the past, such mega-buyouts required multiple LBO firms to work. With club deals all but dead, the Heinz takeover, like Dell’s, shows the new way forward.
AB InBev moves fast to keep Mexico prize 14 Feb 2013 The world’s top brewer has quickly rejigged the $20 bln takeover of Grupo Modelo. If U.S. regulators now approve, the deal still makes sense for AB InBev, both financially and strategically. It will get bigger in Mexico and can still try to make Corona beer a global smash.
UK horsemeat scandal has bright side 11 Feb 2013 The combination of cost-conscious consumers and food producers anxious to oblige them has encouraged ingredient substitution. That’s bad, but it is very good to see the problems discovered. Technology, regulation and communication is making food safer and labels more accurate.
AB InBev setback may hasten last round of beer M&A 1 Feb 2013 U.S. government opposition to AB InBev’s $20 bln buyout of Grupo Modelo may speed up a last bout of sector consolidation. The world’s biggest brewer may yet find a workable compromise with trustbusters. But an obvious plan B is pouncing on emerging-markets focused SABMiller.
New U.S. trustbuster sprays cold brew on AB InBev 31 Jan 2013 William Baer, the DoJ’s antitrust chief, sued to stop the giant brewer’s $20 bln purchase of 50 pct of Modelo. AB InBev had tried to allay competition fears with the deal’s structure. Baer’s surprise move suggests a thirst for tough enforcement - or at least a tough reputation.
Swiss chocolate firm switches to junk diet for M&A 12 Dec 2012 Barry Callebaut is splurging nearly $1 bln in Asia, and enduring credit downgrades to “junk”. And all that for a business that’s having a horrid year. But there are real savings and strategic logic. For bold M&A, having patient family backers and a non-euro zone base must help.
Diageo’s M&A machine misfires with Jose Cuervo 11 Dec 2012 The spirits giant, once abstemious in M&A, has been lifted by a series of smallish takeovers. Now lengthy talks to buy the $3 bln-plus Cuervo have failed. Diageo might claim this shows it remains disciplined. But this is a meaningful setback in the United States.
Diamond Foods still can’t get its story straight 10 Dec 2012 The scandal-ridden U.S. snack producer dodged a delisting by issuing earnings in the nick of time. But even after Diamond’s yearlong cleanup effort, auditors still found weak controls. New capex claims also seem to contradict earlier ones. Investors shouldn’t be surprised.
$5 bln of delayed gratification better than none 27 Nov 2012 Boardroom egos often hamper deals that can benefit investors. Ralcorp flipped suitor ConAgra the bird a year ago. With the formerly reluctant chairman running a spin-off, the food producer is now selling at a price it could have negotiated before. At least it got a second chance.
Hostess Brands is dead, long live the Twinkie 16 Nov 2012 The fluorescent yellow cream-filled cakes are a cultural touchstone for generations of Americans. As Hostess limps through a second bankruptcy in three years, the nuclear option of liquidation is being pursued. But the Twinkie brand’s half-life should be longer than its maker’s.
Reckitt enters vitamin wars with a Bang 16 Nov 2012 The consumer powerhouse behind Cillit Bang has gatecrashed Bayer’s bid for U.S. vitamin maker Schiff. At a 23.5 pct premium and 16.5 times EBITDA, the $1.4 bln counterbid is potent stuff. But trust Reckitt to extract big synergies, as it did in previous punchy deals.
Diamond Foods recovery looks a hard nut to crack 15 Nov 2012 The snacks purveyor finally cleaned up its books, more than a year after Breakingviews helped uncover errors. The upshot is $57 mln of lost profit and pricey debt equal to a hefty 7.5 times generously adjusted EBITDA. Getting back on track requires more than better accounting.
Diageo’s India splash won’t get Kingfisher flying 12 Nov 2012 The British group’s cash brings relief to India’s largest liquor company and its chairman Vijay Mallya. The hope is the tycoon will use some of his booty to revive grounded Kingfisher Airlines. But without a strong partner and the promise of debt restructuring, that won’t happen.
Diageo pays heady price for Indian spirits 9 Nov 2012 The UK drinks group will get up to 53.4 pct of United Spirits for $2 bln. Despite a weakened seller, that’s 20 times historic EBITDA with few synergies. But the long-term logic adds up if it helps CEO Paul Walsh position Diageo as the leader in giving emerging markets a buzz.
Activism will only get so far at Danone 7 Nov 2012 Nelson Peltz forced a demerger at Cadbury. Now the U.S. activist is reportedly targeting France’s leading consumer goods group. Danone’s de facto bid-proof status may partly explain its underperformance. A breakup would be a long shot. But management needs a kick all the same.
Starbucks cross-border tax tactics fail taste test 17 Oct 2012 Shareholders expect companies like Starbucks to keep tax payments as low as can be. Customers may benefit. But multinationals should be careful about pushing too much profit into low tax jurisdictions. Even legal tax avoidance can irritate the governments which lose out.
Greek Coke bottler may find life sweeter in FTSE 19 Sep 2012 Coca-Cola Hellenic is now worth 22 pct of the entire Athens bourse. The world’s second-biggest Coke bottler isn’t obviously undervalued. But adopting a UK primary listing could shield investors from any Greek euro exit, and yield a profile-boosting perch in the FTSE.
Tiger beer sale lobs Thai ball into F&N’s court 19 Sep 2012 Bangkok moguls have blessed Heineken’s bid for Asia Pacific Breweries, clearing the way for a large cash payout to 40 pct shareholder Fraser & Neave. But the Thais still want to buy the rest of the Singaporean conglomerate. Its board needs to convince investors to hold out.
Thais hope for third time lucky with $10bn F&N bid 13 Sep 2012 The Bangkok beer moguls twice failed to get their hands on Asia Pacific Breweries, but prodded Heineken into a higher bid. Now they’re offering to buy the 70 pct of parent company Fraser & Neave they don’t own. At S$8.88 per share, every extra share they get looks a bargain.