Drinks can merger may yet get flattened 19 Feb 2015 U.S. drinks can maker Ball agreed to pay 4.3 bln stg in cash for British rival Rexam. Ball also pledged to pay a chunky 302 mln stg fee if it is blocked. Rexam’s share price suggests the merger may still fall foul of trustbusters.
Rusty Peugeot’s restoration has further to go 18 Feb 2015 Carlos Tavares has beaten most of his goals in his first year as boss of the French carmaker. Shares are up 52 pct too. The company is debt free, cashflow positive and more cost efficient. A 2018 operating profit margin target of 2 pct looks modest. Peugeot may gain speed more quickly.
Loeb’s Fanuc bet may test strength of bionic arm 13 Feb 2015 The U.S. activist has bought into another Japanese company. Unlike with Sony, Dan Loeb’s hedge fund is only demanding a share buyback, not a tricky restructuring. A bigger risk to the investment case may be the challenge to Fanuc’s scary, big robots from cheaper, gentler rivals.
Renault’s turn of speed needs careful handling 12 Feb 2015 The French carmaker has beaten expectations for 2014 by a mile. A 30 pct jump in operating profit, plus an optimistic outlook, pushed the shares up 9 pct. Europe’s recovery should keep Renault on the road. But worsening woes in Russia are a big worry.
Can maker dons tin hat to reveal $6.6 bln approach 5 Feb 2015 Shares in London-listed Rexam jumped 20 pct on news it might sell itself to U.S. rival Ball. A deal isn’t even inked, and the antitrust concerns are substantial. The British company’s decision to publicise the price under discussion looks brave – or designed to force Ball’s hand.
CRH’s $7.4 bln buy reveals M&A tolerance 2 Feb 2015 It’s a big bet. The Irish building group will increase leverage – even with a big equity issue – to buy surplus assets from Lafarge worth a third of its market cap. CRH got sucked into an auction too. Yet investors cheered. It’s how things work in a low-return, low-growth world.
Honeymoon really is over for Siemens boss 27 Jan 2015 Lacklustre quarterly results hit shares in Europe’s largest industrial group. After 18 months, CEO Joe Kaeser has not lived up to early hopes. He’s completed some smart disposals. But he’s also overspent on shale and, by centralising power, hobbled unit managers.
Siemens faces big oil deal debacle 23 Jan 2015 The collapsing oil price turns the German engineer’s dash for shale into a costly blunder. Its $7.6 bln September bid for U.S. oilfield kit maker Dresser-Rand will stain CEO Joe Kaeser’s reputation. With shares of Dresser’s peers clobbered, a major impairment is looming.
ASML shows benefits of market power 21 Jan 2015 Shares in the $46 bln chip equipment manufacturer hit record highs after full-year results showed soaring demand from memory chipmakers. At 25 times forward earnings, ASML’s valuation would be toppy in most sectors. But, like chip designer ARM, the Dutch firm dominates its market.
Clunky conglomerates put on high breakup alert 6 Jan 2015 Billionaire Carl Icahn wants to separate Manitowoc’s construction cranes from its ice machines. Companies with such head-scratching pairings make easy targets for freshly invigorated uppity investors. Pitney Bowes and JBT are among those that may want to keep vigilant guard.
RWE needs Plan B for 5.1 bln euro oil deal 13 Nov 2014 The German utility’s planned sale of oil and gas unit DEA to a group of Russian investors led by Mikhail Fridman has run into British government opposition. RWE needs the sale to cut debt and capital spending. Time to start looking for alternatives.
Cable M&A wave washes over the Caribbean 6 Nov 2014 Cable & Wireless Communications is buying Barbados-based Columbus Intl for $3 bln with debt. As with many European cable deals, the high price must be offset with cost savings and growth. CWC shares dived. That’s not all down to a big share placing in a smallish stock.
BMW extends lead over Daimler 4 Nov 2014 Quarterly results show the Munich carmaker is growing profitably across the world. That makes life harder for arch-rival Daimler, which wants to overtake BMW as the top premium carmaker by 2020. BMW’s share price does not fully reflect that strength.
Edward Hadas: Robots can be our best friends 30 Oct 2014 If the cult of economic efficiency is not abandoned, then machines which can emulate and sometimes surpass human thinking are likely to bring lower wages and more unemployment. But robots provide a wonderful opportunity to combine low labour productivity with high prosperity.
Ferrari spinoff looks great but lacks oomph 29 Oct 2014 The hottest name in sports cars is joining the spinoff bandwagon. Fiat Chrysler will sell 10 pct of Ferrari and hand the rest to investors. Fiat shares zoomed up. Yet the split is largely symbolic. Ferrari needs to stay linked to Fiat, and the cash proceeds will be limited.
DuPont chief bobbles rebuttal to Peltz attack 28 Oct 2014 CEO Ellen Kullman touted the $62 bln chemical giant’s scale and research capabilities in opposing the activist’s call for a breakup. But she offered no hard numbers to counter Peltz’s claim that the company could lop off $4 bln in excess costs. That was a missed opportunity.
Most of the heavy lifting lies ahead for Volvo 24 Oct 2014 An unexpected earnings jump propelled shares in the Swedish truck maker up 10 pct. But Volvo is facing an uphill struggle. The outlook for its core European market is weak, and its new cost cutting targets are ambitious.
Air-bag recall poses carmaker valuation challenge 23 Oct 2014 Supplier Takata’s faulty devices have sucked $6.5 bln from Honda’s market cap. Dodgy ignitions helped dent GM’s by $16 bln. Automakers can overcome such woes, as GM’s Q3 earnings imply. Increasing automation adds a new dimension to the risk, making it even harder to quantify.
Daimler can turbo-charge its cash return 23 Oct 2014 The German carmaker is boasting of record sales, rising margins and rich proceeds from asset disposals. But its dividend has not grown in line with a recovery in performance. After years of parsimony, Daimler can afford to be more generous to shareholders.
ABB switches into rehabilitation mode 22 Oct 2014 After a series of nasty surprises, the Swiss engineering giant’s recovery is charging up. ABB has made progress in fixing its stricken power systems unit, while strong orders highlight operational strengths. But slipping profitability and a wobbly macro outlook remain concerns.