GE investors have been here before 2 Oct 2018 The conglomerate’s shares rose after it named Larry Culp as new CEO – much as they did after previous new starts. Once again, there’s room for disappointment. The weakness in GE’s earnings may go beyond its power division, and Culp may have to cut the dividend.
Royal Mail’s strategy gets lost in the post 2 Oct 2018 The delivery service partly blames its profit warning on poor worker productivity. While keeping a progressive dividend pledge will please investors irked by its new CEO’s pay, Royal Mail needs more investment to solve its operating issues. It could wind up doing the opposite.
Thyssenkrupp gets half a breakup 27 Sep 2018 The German conglomerate’s shares surged on plans to split the company in two. Thyssenkrupp’s businesses are probably worth more apart than together. But the separation will take time, and one of the units will still have a stake in the other.
Smiths wobble fortifies case for more surgery 21 Sep 2018 The $8 bln engineer reported its first sales growth in five years, but the shares fell due to a weaker-than-expected outlook. After rejecting a sale of its medical unit, CEO Andy Reynolds is pruning assets and investing. That may not be enough to close a steep valuation discount.
Saudi-Clariant chemical deal is murky concoction 18 Sep 2018 The Swiss group is setting up a joint venture with 25 pct shareholder Saudi Basic Industries. At the same time SABIC will contribute a new Clariant CEO and four board directors. Though the venture should make sense, the company’s governance becomes more complicated.
German giant adds heft to IPO starting line 17 Sep 2018 The billionaire owner of Knorr-Bremse plans to sell shares in the maker of brakes for trucks and trains. Outside investors will get little say, making a mooted $14 bln price tag ambitious. Yet the reassuringly solid business marks a welcome shift from dicey European offerings.
Gas mega-merger hubris deflated by regulators 22 Aug 2018 Linde needs to sell more assets to close its $83 bln tie-up with Praxair. That means hurried disposals and fewer savings. The rationale for creating the world’s largest gas supplier holds, but the mess shows shareholders should apply a hefty discount to ambitious dealmaking.
Greece needs a governance reboot 21 Aug 2018 International lenders forced Athens to clean up its banks. Yet non-financial companies and their boards are still often dominated by large shareholders. Better protections for minority investors would attract more foreign capital, and help the economy recover from its bailout.
Italy’s Atlantia hardball comes at a price 20 Aug 2018 The government may strip the group of a contract to manage Italy’s motorways after the Genoa disaster. Tough action is needed, but the move could cripple Atlantia and looks premature. The stock plunge is a reminder of why investors need to apply a bigger discount to local assets.
Italy bridge fallout will shape infrastructure fix 16 Aug 2018 Atlantia shares have fallen 30 pct on fears the government may cancel its contracts after a fatal bridge collapse. The tragedy reinforces the case for more investment. The government’s treatment of the toll-road operator will determine whether investors are willing to play along.
Cox: When commemorating crises, think 20 not 10 15 Aug 2018 As the decennial anniversary of Lehman’s systemic collapse approaches, it’s worth recalling the one that preceded it. Russia’s 1998 default led to LTCM’s demise. Shockingly, that fiasco’s lessons went mostly unheeded until 2008. The key takeaway: there are always blind spots.
Thyssenkrupp makes investors slightly less angry 9 Aug 2018 The ailing German conglomerate’s boss Guido Kerkhoff has set margin targets for its various businesses, after shareholder pressure. It’s a start, but the group has missed goals before. And Kerkhoff’s interim status makes it harder to tackle more radical solutions, like a breakup.
Siemens will pay a price for ducking breakup 2 Aug 2018 The trains-to-turbines group is dividing itself into three main units and holding onto stakes in non-core businesses. It’s a far cry from a GE-style restructuring. A more profitable, smaller company will emerge over time. But its conglomerate discount will take time to narrow.
GE put a little too much imagination to work 1 Aug 2018 The shrinking conglomerate may offload parts of its digital business. GE had targeted some $15 bln of revenue by 2020 on the back of the Predix software initiative, and a CFO once dangled the idea of “infinite returns.” It’s a sobering moment for the internet-of-things hype.
GE’s clean sheet reveals real turnaround challenge 20 Jul 2018 A 30 pct fall in earnings in the latest quarter represented a victory of sorts for boss John Flannery’s restructuring. There were no big writedowns, a rarity in recent times, and cost cuts are ahead of schedule. But two of his three core businesses are still in serious decline.
New GE lacks money-back guarantee for investors 10 Jul 2018 John Flannery’s breakup plan could boost the shares of the conglomerate he runs by one-quarter, a Breakingviews analysis suggests. The unenthused reception from the market may be down to GE’s history of unforeseen charges, and the fact it will retain many old problems.
CATL’s overseas charge has lasting power 10 Jul 2018 The Chinese battery champion will build its first factory abroad in Germany after scoring a $5 bln supply deal with BMW. It establishes a base in a promising market for electric vehicles. The newly listed company is cementing its lead over compatriot Warren Buffett-backed BYD.
UK shareholder battle upsets activist conventions 9 Jul 2018 Unhappy investors typically push for CEOs to step down. At infrastructure firm Stobart, fund manager Neil Woodford tried to get the chairman sacked. Iain Ferguson narrowly survived with help from rival Invesco. But the brawl puts little faith in investors guiding quiet change.
Auto tariff deal hopes are rightly restrained 5 Jul 2018 Carmaker shares rose after a German newspaper reported Europe may be able to avoid higher U.S. levies on exports. But BMW, Daimler and Volkswagen’s valuations are still down a fifth since January. Caution is sensible given the unpredictability of White House thinking on trade.
Vedanta digs just deep enough to leave London 2 Jul 2018 Chairman Anil Agarwal’s offer of a 28 pct premium for the mining group’s 2.3 bln pound UK unit is probably enough for investors spooked by deadly protests. They can invest directly in the Indian operations anyway. And a simpler structure paves the way for more dealmaking.