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.
Qualcomm signals $2.5 bln belief in Bluetooth 15 Oct 2014 The $120 bln U.S. chipmaker has bid for Britain’s CSR. It is betting the “Internet of things” will bring rapid growth in Bluetooth-linked cars, stereos and watches. But paying 27 times 2015 earnings looks rich, especially as rival suitor Microchip warns of industry weakness.
Giant fertiliser combo looks tough to cultivate 23 Sep 2014 Norway’s Yara is talking to U.S. rival CF Industries about a $27 bln tie-up. The two boast similar valuations and could reap sizeable synergies. Hence a near-$1 bln jump in Yara’s market cap. But a merger of equals is one of the trickiest deal varieties.
China data divides real and economic worlds 15 Sep 2014 Industrial and investment data for August were poor. Yet job creation, wages and retail spending – which matter most for ordinary people – look solid. While that justifies inaction for now, it is naïve to think the two realms can remain separate. Real estate is the vital link.
French carmaker teaches world about cheap autos 15 Aug 2014 Renault’s no-frills brand Dacia is Europe’s fastest growing carmaker. Quick gains in market share and rich margins are arousing the interest of rivals, including GM. But selling vehicles for as little as 5,995 pounds isn’t easy. It requires a rethink of all aspects of carmaking.
AstraZeneca is not the UK science base 7 May 2014 UK politicians worry that a Pfizer takeover would erode British scientific competence. But if that foundation were strong, the deal would hardly matter. The drug industry has fundamental problems. That’s why Astra has been slashing R&D by itself, and cost-cutting is driving M&A.
Alstom chase is distraction from Siemens revamp 7 May 2014 The German engineering giant’s long-awaited new strategy sensibly focuses on improving efficiency and cutting slack. A possible Alstom deal comes at a bad time, even though the French rival would be a good industrial fit. Siemens management has enough to deal with in-house.
Applus better play it safe with IPO pricing 6 May 2014 The Spanish industrial testing company plans to raise 1.1 billion euros. The sector’s track record is impressive and Applus is growing faster than rivals. But it’s less diversified, and will still be saddled with debt. As such, it deserves a discount.
Alstom’s train future is with Siemens, not GE 6 May 2014 Paris opposes an offer by the U.S. group to buy Alstom’s power business unless the French company gets the American’s transport assets in exchange. That is a barmy idea. What Alstom should try instead is use GE’s money to build a pan-European train business with Siemens.
GE in hard-to-beat 11.4 bln euro bid for Alstom 30 Apr 2014 The U.S. conglomerate’s offer for the French group’s power assets is at the upper end of a reasonable price range. Germany’s Siemens will find it hard to improve on a fair offer favoured by Alstom’s board - and it would probably bring less cash to the table.
Siemens’ Alstom proposal attractive but risky 28 Apr 2014 The German engineer has offered to swap assets with its French rival after a possible GE/Alstom deal ran into government opposition. Exchanging trains for turbines could create two strong players, and generate larger synergies. But antitrust obstacles may be tough to overcome.
Alstom split would energise business units 25 Apr 2014 Too much debt, a ropey rating and looming refinancing needs are Alstom’s key problems. The French engineering group would need more time to fix them than its shareholders seem to allow. A split would make sense, and GE can help.
French M&A: a guide for foreign buyers 24 Apr 2014 Deals for Publicis and Lafarge belie the sneers that France is closed to outsiders. If GE really wants to buy all of Alstom, it needs to be sensitive to local politics. Save some top roles for the French side. Maybe even rename the enlarged, “Paris-based” group Alstom-Electric.
GE/Alstom deal rumours test French reform drive 24 Apr 2014 Shares in the Paris-based engineer jumped 14 pct on reports it has received a bid. Alstom vaguely denied the story. But mere talk about a sale to the U.S. conglomerate will embarrass the French government just as its business-friendly reforms are proving a hard sell domestically.
Lafarge and Holcim should get selling 10 Apr 2014 Investors worry the cement groups’ $50 bln merger will destroy value, with rushed disposals to win antitrust clearance. But if the Franco-Swiss duo has found the right assets to sell, and the synergies stack up, it’s worth swallowing some losses to get on with the integration.
Lafarge-Holcim share jump has gone far enough 7 Apr 2014 The planned $50 bln merger of the French and Swiss cement groups has added a combined $5 billion to their market capitalisations. Credible synergies could be worth much more. But uncertainty over completion and the risk of value-destructive forced disposals justify scepticism.