VW’s best strategic options may be the simple ones 27 Apr 2015 Ferdinand Piech’s exit gives Volkswagen room to rethink. Europe’s largest carmaker can ditch the former chairman’s more grandiose growth visions. It can create ample additional value by shunning M&A and focussing on existing strengths, cost control and cash generation.
Europe’s top activist gets bogged down in Germany 23 Apr 2015 Cevian takes a longer-term, lower-key approach than U.S. rivals. But it’s found a particularly knotty problem at Bilfinger. The industrial group has seen five profit warnings and a 45 pct stock decline over the last year. A good exit is conceivable, but not straightforward.
Volvo turnaround will be helped by heavy-duty hire 22 Apr 2015 The Swedish truckmaker poached Martin Lundstedt from Scania, its stronger VW-owned rival. The new CEO and good results sent shares soaring. Volvo is already excavating itself out of a hole - but Lundstedt could speed up the recovery by getting out of diggers and bulldozers.
GE Capital sale may be zero-sum TBTF game 21 Apr 2015 Shrinking the finance unit should allow GE to ditch its systemically worrisome tag. One possibility is Wells Fargo buying $83 bln of the assets, in deals that would surpass the comfort level of regulators for most bank M&A so far. And it would make one mega-bank even more mega.
Cable giant takes new tack in Belgian telecoms 20 Apr 2015 Liberty Global’s Telenet arm is buying KPN’s unit in Belgium for 1.33 bln euros. Paying eight times 2015 EBITDA for BASE looks good value for the buyer given the scope for savings. Moving into owning mobile assets is also an important shift for John Malone’s group.
GE’s higher sum may reflect most of the parts 17 Apr 2015 With the financial arm being jettisoned, the focus starting with Friday’s Q1 results is squarely on the industrial businesses. Valuing the pieces similarly to rivals, $276 bln GE carries a smaller but conspicuous conglomerate discount. Don’t expect it to shrink much more.
Europe’s car spring can turbo-charge auto stocks 14 Apr 2015 The speed with which new car sales have accelerated this year has surprised even optimists. Pent-up demand, a stabilising economy and low interest rates are all helping. Shares in VW, Fiat, Renault and others have already rallied. But sentiment was so glum there’s further to go.
Wall Street bids slow farewell to GE fee darling 13 Apr 2015 The U.S. conglomerate has been the best corporate client for investment bankers since 2000, spending some $5.1 bln for assistance. Shrinking GE Capital will keep M&A dealmakers happy. The unit’s borrowing, however, is the biggest moneymaker. Much of that could now be at risk.
Volkswagen weakened by chairman’s grumbling 13 Apr 2015 Ferdinand Piech has distanced himself from his successor-in-waiting, CEO Martin Winterkorn. This weakens Europe’s largest carmaker in the midst of a big cost-cutting effort. It also exposes flaws in VW’s governance and divisions in the controlling Porsche family.
GE finally exorcises Jack Welch’s financial demons 10 Apr 2015 It took a near-death experience and flat-lined shares, but Jeff Immelt is ditching banking and returning GE to its industrial roots. The timing works on many levels: asset values are high and lending businesses can be funded. Immelt also keeps a step ahead of prowling activists.
Immelt’s SIFI escape route is tough to follow 10 Apr 2015 The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.
GE shows way by ending wait for tax Godot 10 Apr 2015 The U.S. conglomerate is bringing home $36 bln and will pay $6 bln in taxes on it. The move helps GE deliver a capital return plan with sufficient heft to make a mark. It also should be big enough to be noticed by other companies paying a price for leaving some $2 trln overseas.
France becomes Renault activist – to stop activism 8 Apr 2015 The state is temporarily hiking its stake in the carmaker to prevent other investors opting out from a law to double government voting rights. The reform is meant to protect long-term investors. As it is, Paris is using activist-style techniques to safeguard its own interests.
Dow Chemical tempts fate with $5 bln chlorine sale 27 Mar 2015 The company is offloading its bleach and vinyl-related chemicals to smaller rival Olin using the esoteric reverse Morris Trust structure. The valuation looks solid, especially considering the tax savings. Yet investors should remain wary given the history of such complex deals.
China may finally end Pirelli’s stock market spins 20 Mar 2015 State-owned China National Chemical is buying into the listed tyremaker, run by Marco Tronchetti Provera. It’s the third big capital shift since 2013, each with control moving through a complex web of holding firms. But this one could be the last, if it leads to a full buyout.
Holcim scores clear victory in Lafarge deal 20 Mar 2015 The Swiss cement maker has reset deal terms with its French partner. That’s fair – the new exchange ratio keeps the tie-up a merger of equals. But Holcim has also managed to veto Lafarge’s Bruno Lafont as CEO. Lafarge’s concession suggests its shareholders are anxious for a deal.
Rob Cox: If only GE had an activist who cared 17 Mar 2015 The problem with Jeff Immelt’s conglomerate isn’t inertia, bad managers or crummy assets. GE faces a harder nut to crack: Investors don’t seem to give a damn. As Microsoft’s experience before Satya Nadella suggests, the perception of a stock as dead money is hard to shake off.
Lafarge-Holcim merger can be rescued as takeover 16 Mar 2015 The European cement makers disagree about the financial terms and governance of their planned tie-up. A “merger of equals” has foundered yet again. To keep the deal’s benefits, the way forward would be for Lafarge to agree to be bought for a suitable premium.
Holcim can push for more in Lafarge tie-up 13 Mar 2015 The Swiss cement group is outperforming its French rival, creating cracks in their $44 bln union. A special dividend or higher exchange ratio could fix matters. That is more likely to happen than deal failure, given that both sides would suffer if it fell apart.
VW’s stingy dividend may presage more M&A 12 Mar 2015 Europe’s biggest carmaker has upped its payout to shareholders by 20 pct. But the dividend is only around one-fifth of earnings, well short of Volkswagen’s own target ratio. Yet it has nearly 18 billion euros of cash. That suggests there could be a big acquisition on the cards.