General Mills doubles down on Brazilian consumer 25 May 2012 The U.S. producer of Lucky Charms cereal and Yoplait yogurt has snatched privately-owned Brazilian-Japanese food group Yoki for some $1 bln, a move well timed with a weak real. The current economic slowdown aside, Brazil’s growing middle class is still attractive.
Boardroom gamblers roasted by their own hubris 9 May 2012 Shareholders’ guardians ought to have some skin in the game. But the chairman and lead director of coffee maker Green Mountain threw caution to the wind by piling leverage on their holdings. Their downfall should be a lesson to others.
"Cabbage in formaldehyde" is toxic dish for China 8 May 2012 After tainted milk and glowing pork, a new scandal will hurt China’s small but growing food export trade. A bigger effect will be felt at home. Food scares are inflationary, hurt the poor and erode confidence. Long-delayed agricultural reform should be top of the policy menu.
Bright Food swallows Weetabix at palatable price 3 May 2012 The Shanghai firm is buying 60 pct of Britain’s no.2 cereal maker. An implied $1.9 bln enterprise value is in line with breakfast-table rivals, even if the private-equity seller is making a packet. The deal also underscores a shift towards brand-driven Chinese M&A.
World’s brewers reach last call for Latin targets 1 May 2012 The Brazilian AmBev’s Q1 earnings miss may be just the start. The Anheuser-Busch unit is paying $1.2 bln for the Dominican CND, one of the region’s last available beer producers of any scale. It’s more defensive than a growth play, as competition in Brazil is set to heat up.
Monster shouldn’t be Coke’s tipple of choice 1 May 2012 The century-old beverage giant could use a youth elixir, but it isn’t about to buy the hip and expensive energy-drink maker Monster. That sounds mature - in a good way. Better to create something than pay more than $11 bln, plus a premium, for a faddish brand that could flame out.
Wal-Mart scandal demands spirit of Sam Walton 23 Apr 2012 Chairman Rob Walton must channel his father’s integrity and initiate an independent probe into how managers, including current executives, suppressed strong evidence of widespread bribery and corruption in Mexico. To recover, heads will need to roll without fear or favor.
Pfizer baby food gives Nestle a $12 bln sugar rush 23 Apr 2012 The Swiss food giant is paying a hefty 4.9 times sales for the U.S. group’s infant nutrition arm. That’s partly down to an M&A tug-of-war with rival Danone. But it also reflects Nestle’s rock-solid balance sheet - and the scarcity of big emerging-market growth plays.
SABMiller’s CEO-chairman move is a red flag 23 Apr 2012 CEO Graham Mackay has served investors in the Miller Lite brewer very well. But no good company should be dependent on a single employee. That is why SAB’s decision to elevate Mackay to the chairmanship is disappointing. Shareholders should push for more independent oversight.
Tesco plan deserves every little bit of support 18 Apr 2012 Shares in the food retailer are the FTSE 100’s worst performers this year. After a nasty warning in January, Tesco’s new-broom management team has outlined a plan for stabilisation. Lower UK margins are the necessary cost of faster growth. Investors should back the strategy.
Newest burger kings get Whopper of a finder’s fee 4 Apr 2012 The public return of Burger King via a tie-up with a London SPAC gives financiers Bill Ackman, Nicolas Berggruen and Martin Franklin something to relish: a finder’s fee of stock worth some $160 mln. And the hamburger chain gets a far meatier valuation than just two years ago.
Molson runs up big tab for emerging markets light 3 Apr 2012 The North American brewer will pay $3.5 bln to enter central Europe. Savings are limited, the seller is probably making a packet, and Molson outbid a Japanese rival: all worrying signs. But while the region doesn’t promise huge growth, the prospects are better than home.
Deloitte caught in Diamond Foods’ glare 21 Feb 2012 Just a few months ago, the snack food firm’s auditor was publicly shamed by its U.S. regulator for past failings. Diamond’s misstated payments to nut growers call into question other facets of the company’s books. Deloitte could be headed back into the accounting hot seat.
Kellogg rescues P&G from over-cleverness 15 Feb 2012 The maker of Corn Flakes and Froot Loops is paying $2.7 bln for Pringles, the snacks business that P&G hoped to sell to Diamond Foods in a complex tax-minimizing deal. Kellogg can justify a premium, while P&G will net less after tax. But the consumer giant gets a valuable lesson.
Diamond Foods crashes after running before walking 9 Feb 2012 The nuts and snacks firm came clean about $80 mln worth of bad accounting and replaced its CEO and CFO. Shares tanked and its deal to buy Pringles looks all but dead. It’s a warning about going aggressively from private and small to public and big. There are more lessons, too.
Einhorn case strikes mild blow against cronyism 25 Jan 2012 The UK’s FSA has fined Greenlight hedge fund boss David Einhorn, though the rationale is fuzzy. He declined to hear inside information - but still spoke with Punch Taverns and its broker, then sold the stock. If nothing else, the case exposes cozy practices in financial circles.
Tesco’s ambitions earthed by UK retail reality 12 Jan 2012 Britain’s largest grocer disappointed with a 2.3 percent decline in like-for-like UK sales over Christmas. The lesson: it’s tough to grow profitably in a crowded market with depressed consumers. But while Tesco is clearly down, its model is not fundamentally flawed.
India wages inefficient war on malnutrition 19 Dec 2011 The country still suffers from this most basic sort of poverty – 74 percent of children are anaemic. The government plans to double its food subsidies, to 2 percent of GDP. The idea is good, but such programmes should be well targeted and affordable. The new plan is neither.
P&G didn’t crunch its Pringles partner adequately 15 Dec 2011 Troubles have escalated for Diamond Foods, the agreed buyer of the chips brand, with the SEC now probing its accounting. The scale of issues being targeted suggests the consumer giant missed early warning signs. An obsession with taxes may have clouded P&G’s vision.
P&G may need to pop a plan B for Pringles 29 Nov 2011 Diamond Foods, agreed buyer of the consumer giant’s chips brand, keeps losing sparkle. Buried news about its internal audit investigation, rising payments to walnut-growing directors and other inconsistencies don’t seem to augur well for the probe - or P&G’s deal.