Carillion meltdown shows risk in return-free world 17 Nov 2017 Creditors of the UK construction group face losses in a looming restructuring. The company expanded too fast and took on risky contracts. Meanwhile, BBB-rated Veolia is borrowing at sub-zero yields. Investors should remember that even central banks can’t make default impossible.
Emerson ratchets up heat on Rockwell – and itself 16 Nov 2017 The U.S. industrial group raised its bid for the automation specialist to $29 bln. A near-30 pct premium puts pressure on Rockwell’s long-serving leadership to come to the table. In pursuing a long-term logical tie-up, though, Rockwell looks to be punishing its own shareholders.
Audit defect throws wrench in GKN re-engineering 16 Nov 2017 CEO-designate Kevin Cummings will leave the UK car parts and aerospace group after it unearthed more accounting problems at the unit he ran. The mess reinforces the case for breaking the company into two parts. Yet the governance vacuum makes quick fixes harder.
GE’s shaman exorcises ghosts of false expectations 13 Nov 2017 It doesn't take much imagination at work to grasp John Flannery's approach to the $178 bln conglomerate. He has halved the dividend, cut earnings guidance and questioned GE's portfolio of industrial assets. Next up is a total restructuring of GE's bloated, under-engaged board.
Akzo Nobel-Axalta merger is a hostage to history 8 Nov 2017 A proposed blend of the two paint makers could produce colourful cost savings. That must mean job losses – and Akzo is the less efficient. Yet the $23 bln Dutch group deflected a bid from PPG saying cuts were a no-go. It’s hard to see how it could do the requisite U-turn now.
Lycra is stretch project for China’s budding LVMH 7 Nov 2017 Shandong Ruyi snapped up the sporty fabric brand from a subsidiary of Koch Industries for more than $2 billion. That advances the firm’s quiet aim of becoming China’s Louis Vuitton. While less bold than moves by other Chinese conglomerates, it just might work.
Axalta is a chip in DowDuPont’s paintwork 2 Nov 2017 Activist Nelson Peltz once pilloried chemicals giant DuPont for selling its coatings business to private equity. He was right. Axalta is now weighing a merger with Akzo Nobel. With a bit more love, it might have given investors in what’s now DowDuPont a 29 percent annual return.
Emerson’s tilt at Rockwell lacks killer blow 31 Oct 2017 The rejected $28 bln offer for the U.S. automation group represents a premium of just 15 pct, paid partly in stock that has systematically undershot Rockwell’s. With valuations high, an all-cash bid might have tested the target’s independence. That looks beyond Emerson’s means.
Axalta deal complicates Akzo’s juggling act 30 Oct 2017 Fresh from deflecting a takeover, the Dutch group is considering a merger of its paints unit with its U.S. rival. A combination makes sense. But new CEO Thierry Vanlancker is already grappling with weak results and a chemicals spinoff. That raises the risk of dropped balls.
Whirlpool and Sears engage in war of weaklings 24 Oct 2017 The appliance maker will no longer supply the retailer with most of its brands after a price-hike request was denied. Whirlpool cited higher costs and growing competition. Sears is struggling to keep its business alive and out of bankruptcy. Neither has the upper hand.
GE has become the ultimate industrial lightweight 23 Oct 2017 Earnings that even new CEO John Flannery called “horrible” put fresh pressure on a stock down over 25 pct this year. The last surviving original Dow member now has by far the lowest weighting of any share in the index. It’s an embarrassing sign of the storied firm’s troubles.
Spare GE jet is symbolic target of Flannery sweep 19 Oct 2017 Scrapping a second plane that followed former boss Immelt around, just in case, is an easy sop for shareholders. The new CEO needs them on side as he mulls possible bigger changes at the $200 bln industrial giant, such as dropping long-held earnings targets or cutting dividends.
Spanish toll-road bid steamrollers Benettons 18 Oct 2017 ACS has made a 17 billion euro offer for infrastructure operator Abertis, using the balance sheet of its German unit Hochtief. The price is better than a rival bid from Atlantia, controlled by Italy’s Benetton family. It owes more to cheap debt than economic sense.
ACS faces bumpy road to join Abertis battle 13 Oct 2017 The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.
German scrap metal IPO hinges on green alchemy 6 Oct 2017 Befesa, which turns waste steel dust into more expensive zinc, could be valued at up to 1.6 billion euros in a Frankfurt listing. Buyout groups offered less earlier this year. Hope that emerging economies will tighten up environmental rules may justify the rich price.
Alstom gains upper hand in Franco-German rail deal 27 Sep 2017 The French group’s shareholders will own nearly half the combination with Siemens’ train unit, despite contributing just a third of the operating profit. Alstom also keeps its CEO and head office. Hefty cost savings and the creation of a European champion justify the concessions.
Fortum price for Uniper implies another bite later 27 Sep 2017 The Finnish power group will offer 8.1 billion euros for its German target. E.ON, with 47 percent of Uniper, is on board, but other shareholders can reasonably expect a bigger premium. If Fortum wants full ownership, it may take more time – and more money.
ABB’s short-term value push takes $2.6 bln detour 25 Sep 2017 The Swiss group is shelving a $3 bln buyback programme to acquire GE’s non-core industrial solutions unit. On the surface it’s a strange move for a company that’s faced calls to simplify and boost margins. But a low price and high synergies mean ABB investors might still prosper.
Agarwal’s Anglo wager is risky way to plot breakup 21 Sep 2017 The Indian billionaire is doubling down. Paying as much as 1.5 billion pounds to raise his stake in the UK-listed miner to 20 pct may be a way of trying to force a breakup. But unpredictable commodities prices and South Africa’s volatile politics could scupper any such plans.
CRH deal cements its U.S. infrastructure bet 21 Sep 2017 The building materials company is buying Kansas-based Ash Grove for $3.5 bln including debt. It’s a full price for a group which likes to buy cheap. Despite doubts over President Trump’s pledge to rebuild highways and bridges, pushing into its key market makes sense for CRH.