Mergers & Acquisitions

Post serves unappetizing $1.5 bln breakfast combo

19 September 2017

The Grape-Nuts-to-Weetabix maker has ordered up a side of sausage and home fries by agreeing to buy Bob Evans. Post shares have been on a roll, but it's paying a hefty 15 times EBITDA, before trimming any fat. An estimated return of 5 pct is no way to start an investor's day.

Climate-investing deal targets sustainable returns

18 September 2017

London-based Impax’s purchase of U.S. rival Pax stacks up financially and creates one of world’s largest climate-change specialist investors - with $13 bln in assets. Rising environmental risks should heat up demand for such funds, but also draw competition from bigger players.

Northrop plays on global angst with $7.8 bln deal

18 September 2017

The drone and B2 bomber maker is going ballistic by buying missile and satellite maker Orbital. Cost savings fall short of covering the all-cash deal’s premium. But with tensions growing over North Korea’s nuclear threat, the target’s interceptor business may be set to rocket.

Asian bid for Pret A Manger won’t cut the mustard

18 September 2017

Filipino fast-food joint Jollibee is eyeing the fancy sandwich chain, says Reuters, potentially uniting Chickenjoy buckets and posh ploughman’s baguettes. But a mooted price of more than $1 bln looks far too downmarket. It might need to double that to derail Pret’s IPO plans.

Fosun beats the odds with revamped Indian deal

18 September 2017

The Chinese conglomerate’s drug unit will buy a smaller 74 pct of KKR-backed Gland Pharma for $1.1 bln. That shows Beijing is still open to sensible foreign deals. And despite a recent border spat, India is open to Chinese money, especially if deals are carefully structured.

China’s drugmakers boast Big Pharma option value

18 September 2017

The U.S. listing of Zai Lab highlights a new breed of innovative eastern upstarts specializing in drugs made from living cells. Some have already won financial backing by Western rivals. It is one reason to believe China can produce the world’s next blockbuster drug.

Exxon’s M&A machine faces Permian dilemma

15 September 2017

Buying a West Texas driller is the quickest way for the $337 bln oil giant to catch up with peers on replacing reserves. Valuations have fallen a third or more while Exxon’s remains steady. The trick for CEO Darren Woods is to find enough cost cuts to justify paying a premium.

Lure of scale drives Axa asset management union

15 September 2017

The insurer may seek a partner for its European fund arm, Bloomberg reports. Joining forces with French rival Natixis would create a European giant with assets of more than 1.5 trln euros. The threat to margins from low-cost passive investments makes cost savings unavoidable.

Toshiba soap opera employs vast cast of middlemen

15 September 2017

The plot twists keep coming in the $20 bln sale of Toshiba’s memory unit, as vested interests clash. The drama may not do much for shareholder value, but the lawyers, stockbrokers and advisers don't want this fee-based passion play to end.

D.E. Shaw’s rare activist shot falls short at EQT

14 September 2017

The hedge fund is calling for a breakup of the natural-gas company, echoing Jana Partners. Yet it’s content to let the company first buy Rice Energy for $6.7 bln despite the deal’s flaws. It’s an unconvincing foray into activism for a fund better known for computerized trading.

Blue Bottle gives Nestlé little more than a buzz

14 September 2017

The Swiss food giant is buying control of the hipster coffee chain at a high-octane $700 mln valuation. It's a premium upgrade for the Nescafé maker, which is also offloading its U.S. candy arm. It may prove challenging, though, for such a niche brand to jolt the bottom line.

Trump follows Obama’s lead on Chinese chip deals

14 September 2017

The U.S. president blocked a $1.3 bln takeover of Lattice Semiconductor. It’s not a new position: his predecessor was sensitive to Beijing’s ambitions and nixed a similar acquisition. With scrutiny likely to intensify, buyers and sellers can save face by rethinking these mergers.

Saudi can afford to scrap Aramco IPO plan

14 September 2017

Achieving the desired $2 trillion valuation for its crown jewel is going to be tricky. Instead of rushing the job, Riyadh may delay listing 5 percent beyond next year. Even then, political and pricing problems will remain. If it wants money, the kingdom has better alternatives.

Vivendi legal slap exposes folly of Italian push

14 September 2017

The French media group effectively controls Telecom Italia despite having only a 24 pct stake, a watchdog ruled, meaning Vivendi may have to consolidate 25 bln euros of its debt. TI has been plummeting in value too. Vincent Bolloré, who chairs Vivendi, has no good options.

Healthcare’s nonprofit status belongs in the grave

13 September 2017

Publicly traded Centene is buying tax-exempt insurer Fidelis for $3.75 bln. The seller’s priest-CEO earns an ungodly sum. Exorbitant pay is rife in nonprofit healthcare, yet is rarely tied to community benefit. Euthanizing these firms’ tax break would be a social good.

EU foreign investment review raises bar for China

13 September 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

Ad world’s bling days may be over

13 September 2017

The likes of WPP, Omnicom and Publicis risk a low-growth future. Revenues are stagnant and they are over-exposed to slow-growing developed economies. Agencies may be forced to copy the austerity already practised by their consumer-goods clients and pay more attention to margins.

Bunge makes itself slipperier target for Glencore

12 September 2017

The ag trader inked a $946 mln takeover of a majority stake in Malaysia’s IOI Loders Croklaan, expanding its business in higher-margin edible oils. The deal looks justifiable. But investors were hoping Ivan Glasenberg's conglomerate would hand them a juicy takeover bid.

DowDuPont gives blueprint for activist compromise

12 September 2017

It hasn't been pretty. But several activists, lots of money, plenty of fighting and years later, the merging Dow-DuPont reached a plan that shareholders, even both Dan Loeb and Nelson Peltz, now support. Somewhere in this chemical romance, there's a lesson for P&G and others.

JBS takes shareholders on zany rollercoaster ride

11 September 2017

The scandal-plagued Brazilian meatpacker raised a much-needed $1 bln by selling a poultry business to Pilgrim’s Pride. That gave investors a bit of a high after the low provided by the unraveling of the controlling family’s corruption plea deal. More stomach-churning lies ahead.