Mega Medibank IPO sets tone for Aussie sell-off 23 Oct 2014 A valuation of up to $4.8 bln for the state-owned private health insurer rests on the potential for cutting costs. But not being too greedy now will make it easier to flog some of the huge pipeline of Australian assets lined up for privatisation to stock market investors.
GSK’s deal-making days may just be starting 22 Oct 2014 The struggling pharma group is mulling an IPO of its HIV unit, which would go straight into the FTSE-100. It’s also holding next year’s dividend flat. The extra financial flexibility is welcome. But there’s also scope for a more radical strategy to realise value from disposals.
CVS smokes policy could trip antitrust alarms 21 Oct 2014 The U.S. pharmacy chain’s benefits arm may charge customers extra for using drugstores that, unlike CVS, sell cigarettes. That’s reminiscent of anti-competitive tying that got Microsoft in trouble. The cases differ, but concerns about market power make the company worth watching.
Rob Cox: Fragility bigger worry than volatility 21 Oct 2014 Recent rollercoaster markets are a symptom of a more concerning malady. They reflect the shock accompanying recognition that widely accepted assumptions about everything from monetary policy to geopolitics, and even the state of global health, are dangerously flimsy.
Rolls-Royce enters new era of uncertainty 17 Oct 2014 A profit warning has sent the UK engineer’s shares down 8 pct. Russian sanctions and the weak world economy are hurting. Cost cuts and new medium-term guidance show Rolls is trying to soften the blow. But investors may discount the company’s forecasting powers.
Megadeals like AbbVie/Shire invite arbitragedy 16 Oct 2014 Doubts over the $55 bln takeover have hurt Paulson, Elliott and other hedge funds. This caps a dismal half-decade for merger arbitrage. Bids have been scarce and spreads narrow. And the biggest, most investable deals often come with the worst political and regulatory pitfalls.
AbbVie U-turn shows Shire was mostly about tax 15 Oct 2014 The American group has cooled on a $55 bln bid for its UK-listed peer. The change of heart was prompted by U.S. opposition to “inversions.” That shows how much, despite AbbVie’s earlier protests, this deal was driven by tax. A recut takeover looks unlikely.
Guest view: When Ebola comes to your neighborhood 14 Oct 2014 A former Breakingviews columnist gives an account of what it’s like to find out the latest international health crisis patient lives down the road. After all the claims of American, and Texan, exceptionalism it’s a wake-up call for all developed economies to heed.
Ebola shows dangers, and power, of globalisation 10 Oct 2014 The spread of the deadly disease is a symptom of an interconnected yet hugely unequal global economy. At least there is enough solidarity, and enough at stake for the rich world, for belated help to reach the poor countries at the centre of the outbreak.
Allergan takeover trials reach Phase III 8 Oct 2014 The $52 bln acquisition attempt began with Valeant’s controversial experiment involving activist Bill Ackman. The botox maker rejected that hypothesis, but a sweeter bid and rival Actavis may soon be added to the mix. Approval of some kind is now in the offing.
Tax clampdown could deter half-baked pharma M&A 23 Sep 2014 The U.S. attack on companies relocating to avoid taxes will calm pharma’s M&A binge. Deals like AbbVie’s purchase of Shire may survive on strategic logic. Pure tax-driven combinations, like Mylan/Abbott, look tricky. That lessens AstraZeneca’s vulnerability to a bid from Pfizer.
Merck’s mega-deal leaves pharma in need of a fix 22 Sep 2014 The German drugs and chemicals maker will buy U.S. life-science group Sigma-Aldrich for $17 bln. The deal defies expectations that Merck would bulk up in pharmaceuticals. It makes strategic sense, and isn’t too expensive. But the humdrum pharma unit is left in need of repair.
GSK graft case raises risk for executives in China 19 Sep 2014 The drugmaker is paying a 297 mln stg fine for bribing non-government officials in China. That sets a floor for penalties in future probes. But the suspended sentences for five executives also send a warning that pain in such cases falls on individuals just as much as companies.
Bayer’s plastic float sows seeds for one more sale 18 Sep 2014 Investors added $5 bln to the German blue-chip’s market cap after it unveiled plans to float its capital-intensive MaterialScience unit. Once again, markets are rewarding sharper focus. A logical follow-up would be to quit agrochemicals, leaving a pure healthcare business.
Edward Hadas: A holistic economics of healthcare 10 Sep 2014 A UK report suggests merging medical and other welfare programmes for the critically ill. The lessons are global. Recognising that poor health is often just one part of life’s troubles would bring better care. The greatest challenge is to make that care less bureaucratic.
Google finally learns from healthcare hiccups 4 Sep 2014 Costly run-ins with U.S. regulators have taught the internet giant that drugs and biotech can be more complicated than search. Now it’s partnering with pharma firms and others that know the legal terrain. That allows Google to disrupt while avoiding bureaucratic minefields.
Time nudges Pfizer and Astra a bit further apart 27 Aug 2014 The U.S. pharma group is now allowed to renew its overtures to its UK peer. AstraZeneca has performed OK since May. That will support Astra’s recent view that any bid should be worth at least $123 bln. But Pfizer now has other options for tax-driven M&A.
Roche’s $8 bln bet outsmarts ice-bucket challenge 25 Aug 2014 Dumping cold water on heads, the social-media phenomenon now boosting ALS research, is a great way to raise charitable cash. But the drug made by Roche’s target, InterMune, treats a disease with more sufferers. The market may be the more efficient way to direct funds.
Fear is key to Ebola’s economic contagion 18 Aug 2014 The virus ravaging parts of Africa has yet to spread elsewhere. Yet Asia’s SARS crisis in 2003 showed how changes to behaviour can hurt growth and productivity more than an actual disease. Ebola seems harder to catch, but more deadly. That could make for a more pronounced effect.
U.S. social security suffers from low-rate longevity 29 Jul 2014 The retirement and disability funds will run out by 2033, nine years earlier than projected 10 years ago. After that, benefits will have to go down – or taxes up by nearly 3 pct of income on average over 75 years. Low interest rates worsen the problem and make fixes more urgent.