Coke gulps Pepsi’s backwash in strategic reversal 25 Feb 2010 The $13 bln takeover of its North American bottler makes sound financial sense. The 1980sera smokeandmirrors trick of spinning off assetheavy businesses no longer works. But Coke s CEO looks like a charlatan for dismissing the idea last year when Pepsi beat him to it.
Beer goes flat in developed markets 23 Feb 2010 Brewers used to be considered recessionresistant. But Heineken and Carlsberg are finding that drinkers in Europe and North America are guzzling less or trading down to cheaper brews. That helps explain the expensive scramble for assets in still beerthirsty developing markets.
Japan’s beer giants chose bad time for good deal 8 Feb 2010 Kirin and Suntory's failure to agree a possible $30 billion merger is no shock. Volatile markets are no place to discuss valuation. While both sides need a deal, neither is desperate. But the prospect of colossal cost savings means the combination should happen in smoother times.
Bond investors still relatively sweet on Kraft 4 Feb 2010 CEO Irene Rosenfeld didn't win many friends in the stock market with her pursuit of Cadbury. Yet debt investors are handing over $9.5 bln to fund the food giant's deal despite a gummed up day in the markets. Rosenfeld shouldn't take this as a validation of her strategy, however.
China needs fertilizer more than steel 27 Jan 2010 If the Middle Kingdom's industrialization follows the course of other nations, per capita demand for infrastructure like concrete and steel will peak long before meat consumption. This may explain why M&A in agriculture, not steel, is so hot. Case in point: Vale's $3.8 bln deal.
How to curb debt-fuelled deals 26 Jan 2010 After Kraft's takeover of Cadbury, nervous Brits are casting around for ways to stop other icons falling into foreign hands. Most of the ideas aren't good. But one proposal abolishing the taxdeductibility of interest has merit, albeit not for protectionist reasons.
Buffett looks like shrewder Cadbury dissenter 22 Jan 2010 The great investor thinks Kraft is overpaying for Cadbury, UK insurer Legal & General says the price is too low and the two boards think the deal is just right. Since Cadbury will vanish into Kraft, a final judgement won't be easy. But the history of big mergers supports Buffett.
Blackstone’s UK retail bank foray could make sense 21 Jan 2010 Backing a new mortgage lender would be an odd move for the buyout group. But a startup bank may not be much harder than bottomfishing for assets among UK financials. And the rates environment means Blackstone could secure privateequity returns.
Cadbury takeover could make UK more protective 21 Jan 2010 It may be economic malaise or a looming election, but the British seem unusually upset to see another national icon fall into foreign hands. Even if the UK's open market for corporate control is not formally closed up, the Cadbury backlash may make future predators think twice.
Rosenfeld sneaks Cadbury deal past Buffett 20 Jan 2010 The Kraft boss upped her price to secure the British confectioner. But she reduced the stock on offer, thereby sort of taking Buffett s advice but also removing the disapproving billionaire s chance, as Kraft s biggest shareholder, to vote against the deal. It s a ballsy move.
Kraft’s wait for Cadbury helps square debt circle 19 Jan 2010 The four months drooling for Cadbury must have seemed like four years for Kraft CEO Irene Rosenfeld. But the delay had its benefits. Though the U.S. food company will have to raise more money to fund the final deal, that's become easier and cheaper since Kraft launched its bid.
Cadbury deal creates pressure for chocolate M&A 19 Jan 2010 Kraft's $19 bln purchase of its UK peer creates a giant with 15 percent of the confectionery market and scale economies to rival Mars. Smaller Hershey and Ferrero are likely to want to bulk up. But Nestle, which let Cadbury fall, may be rethinking its ambitions in the sector.
Candy wars may end with sweet deal 19 Jan 2010 Kraft is near to buying its UK chocolate rival for 11.6 bln pounds after adding cash to its earlier hostile bid. Both sides should feel content. Kraft can justify the price. Cadbury couldn t have delivered similar value by itself. Moreover, it managed this without an auction.
Solo Hershey bid for Cadbury remains a stretch 14 Jan 2010 The obstacles to the U.S. food group bidding for Cadbury board unity, financial firepower may be falling. But any offer would still involve heaps of stock. With synergies lower than in a Kraft deal, Cadbury shareholders would want a huge share of the enlarged entity.
Buffett’s sweet tooth may have its limits 14 Jan 2010 The billionaire owns See's Candies and Dairy Queen, and helped Mars buy Wrigley. A Hershey bid for Cadbury engineered by his favorite banker is just the kind of deal Buffett might crave. But he doesn't like auctions and he also owns 10 pct of another Cadbury suitor, Kraft.
Cadbury defence enough to see off Kraft – for now 12 Jan 2010 The UK confectioner hasn't pulled any chocolate rabbits out of its hat. It has probably done enough to see off Kraft's current hostile bid. But a higher offer from the U.S. group, or a late appearance from Ferrero/Hershey, would throw Cadbury's future back in the balance.
Kraft shouldn’t budge on Cadbury bid 12 Jan 2010 There s no sense overpaying or bidding against itself. The UK chocolatier s whiteknight hopes are fading. And it may prove more fruitful for Kraft CEO Irene Rosenfeld to satisfy Warren Buffett than chase Cadbury s chairman. Absent a bid, Cadbury just gets cheaper.
Heineken squares circle with FEMSA beer deal 11 Jan 2010 The Dutch brewer has outbid SABMiller to clinch the auction for the Mexican group's beer business. The deal is a fair price for a top slot in growing Latin American markets. Moreover, Heineken's allshare bid keeps debt under control while leaving its founding family in charge.
Cadbury white knight defence isn’t a cinch 7 Jan 2010 It would be nice to persuade Hershey to come in with an offer that trumped Kraft's hostile bid. But that's not going to be easy. With Kraft's own offer closing in on Cadbury's share price, the best the UK confectioner may be able to do is repromote its solo prospects.
Nestle shows itself a canny buyer and seller 5 Jan 2010 The world's largest food group is pocketing $28.1 billion by selling its stake in Alcon. Now Kraft's bid for Cadbury has given Nestle the chance to nab a dominant slice of the North American frozen pizza market. Nestle remains in a strong position to pick up other choice assets.