Melrose can engineer a higher price for GKN 15 Jan 2018 The acquisitive engineering group has had its 7 billion pound bid for ailing GKN rejected. It could hike its offer by over 10 percent and still double its money, according to Breakingviews estimates. That would be an acceptable return, but will require precision execution.
GKN breakup defence is still on drawing board 12 Jan 2018 The UK engineer grappling with an accounting scandal rejected a $9.5 bln offer from serial acquirer Melrose. Its alternative plan of splitting itself in two makes sense and could deliver more value. But investors need more proof it can fix its business, and a clearer timetable.
German economic success lays trap for Merkel 11 Jan 2018 The strongest growth in six years and the rude health of public finances may tempt a weakened Chancellor Angela Merkel into budget giveaways. But low interest payments flatter the fiscal picture and won’t endure. Better to invest in infrastructure and education than to cut taxes.
Continental would move to higher gear with breakup 9 Jan 2018 The $57 bln auto supplier is reportedly considering a business overhaul, including listing its tyres unit. That fits with a trend for breakups at auto groups, and would boost its valuation. The Schaeffler family, Continental’s largest shareholder, is a potential roadblock.
Boeing’s stealthy Embraer approach has big aims 2 Jan 2018 The U.S. aerospace giant is considering joint ventures with the Brazilian planemaker rather than a takeover bid. That’s smart. A lower altitude should allow it to sidestep political and financial turbulence while forging more extensive links than rivals Airbus and Bombardier.
Wanted: Italian-American carmaker seeks new driver 29 Dec 2017 CEO Sergio Marchionne will soon head for FCA’s off ramp. A blizzard of well-timed deals helped spark stellar returns, but the group has low margins and big gaps. Marchionne also wears too many hats. Breakingviews imagines a consultant advising the board on picking his successor.
GE exits 3D-printing fight only slightly bruised 27 Dec 2017 The U.S. group ended a 15-month tussle for ownership of Sweden’s Arcam by buying hedge fund Elliott’s stake at a modest premium. GE should benefit from having full control of a technology critical to its aviation business, even if it nets Elliott’s Paul Singer a handsome profit.
Boeing’s tie-up with Embraer brings co-pilot risk 21 Dec 2017 The $177 bln aerospace giant is in talks to acquire the $3.7 bln Brazilian jetmaker. It makes strategic sense, given rival Airbus’s deal with Bombardier. But Embraer’s government shareholder means the deal may come with a high premium and low returns.
M&A deal finds Saudi diversity but few believers 18 Dec 2017 McDermott is barely paying a premium for CB&I. Yet the transaction reduces the energy-infrastructure firm’s reliance on the turbulent Middle Eastern kingdom, and should yield cost savings worth over $1.5 bln. Investors are skeptical any player can thrive given oil’s troubles.
Thales’ 4.8 bln euro Gemalto bid puts jobs first 18 Dec 2017 The French defence firm has crashed Atos’ tilt at Gemalto, offering a higher price. The deal brings modest returns and leaves Thales exposed to a struggling payments business. Its biggest shareholder, France’s government, may care more about the temporary pledge to spare workers.
Fortum’s Uniper bid has bigger issues than Elliott 13 Dec 2017 Hedge funds including Paul Singer’s group want the Finnish energy company to pay more for its German peer. Appeasing them would weaken Fortum’s rationale for buying fossil fuel-heavy Uniper. The shift to clean energy and the lapse of generous Russian subsidies may destroy it.
Ambani is programmed to punch through $100 bln 13 Dec 2017 Mukesh Ambani's Reliance Industries could be India's first mega-cap stock. His refineries are at the mercy of oil prices, but his bid to dominate Indians’ digital lives is generating excitement. A potential listing of his upstart telecoms business will add to the upward momentum.
Anti-LBO activist could benefit Toshiba investors 12 Dec 2017 A hedge fund says the Japanese conglomerate need no longer divest its $18 bln memory unit after raising $5 bln in equity. It has a point: the deal was a fire sale. A quick halt is unlikely, but a U-turn would be possible and desirable if the transaction doesn’t close by March.
Fossil-fuel slowdown spreads pain at GE and beyond 7 Dec 2017 The conglomerate is laying off 12,000 people in a power division that lights up 30 percent of the world. It blamed overcapacity amid a shift from coal and gas to renewables. Other divisions closely tied to fossil fuels are also ailing. GE’s woes suggest a wider shakeout ahead.
Elliott’s usual playbook is unsuited to Uniper 6 Dec 2017 Paul Singer’s activist fund has a 5.3 percent stake in the German energy group that is being targeted by Finland’s Fortum. Unusually, the buyer may be willing to live with less than full ownership for a while. That could reduce the scope for Elliott to hold the bidder to ransom.
Prysmian’s U.S. cable tie-up is well thought out 4 Dec 2017 The Italian cable-maker is buying loss-making U.S. rival General Cable for $3 bln including debt. The hefty premium is deserved if the buyer can deliver chunky cost savings. In a sector where scale is all-important, the deal helps Prysmian see off European and Chinese opponents.
Microchip boom short-circuits Singapore’s growth 28 Nov 2017 Revised GDP revealed a surprisingly strong 5.2 pct quarterly lift for the city-state's $300 bln economy. As in other parts of the world, however, the expansion has yet to power wages or jobs. Cyclical semiconductor output flatters the figures and warrants investor caution.
Emerson’s $29 bln bid for Rockwell has a big flaw 22 Nov 2017 That’s the fact that much of the takeover approach, while reasonably priced, is in Emerson stock. Rockwell’s board is using that to justifiably question the bidder’s long-term plan, and questionable synergy estimates. It’s hard to see how anything other than cash can win the day.
Akzo’s no-deal still worse than a good deal 22 Nov 2017 The Dutch paint maker is temporarily solo after talks with U.S. peer Axalta foundered. That combination, good on paper, was challenged by the two companies’ uneven size and likely job cuts. Even so, Akzo’s future if it’s determined to remain single is unappealing.
Viewsroom: AT&T’s $85 bln deal runs into static 17 Nov 2017 The telecom firm’s acquisition of Time Warner, owner of CNN, may hit regulatory hurdles in D.C. President Trump’s caustic tweets against the news network look self-interested, but watchdogs could yet legitimately rethink norms of competition. Plus: GE searches for a way forward.