Mergers & Acquisitions

KKR scrapes second-rate return out of First Data

18 January 2019

After a long 12-year investment in the payment processor, a sale to Fiserv sets the stage for a profitable exit. It’s a wonder the $29 bln buyout survived the financial crisis, considering the debt and multiple CEOs. Anything better than breaking even amounts to a win.

EU can afford to shunt Siemens-Alstom to a siding

18 January 2019

Margrethe Vestager may well block the rail groups’ merger. That would rile German and French politicians yearning for a European champion to face down distant fears of Chinese dominance. But if the antitrust tsar pulls the plug, neither Siemens nor Alstom would suffer too much.

Telecom Italia’s new boss needs some quick wins

18 January 2019

The Italian telco’s shares have dived after a profit warning. New CEO Luigi Gubitosi can stop the rot by listing its fixed network, but that path is slow and uncertain. A quicker route to credibility lies in selling stakes in choice assets like Inwit and the Brazil business.

Stalling Jet Airways puts Narendra Modi in a bind

17 January 2019

To save the private carrier, India’s premier may have to choose between relaxing foreign ownership rules for Abu Dhabi’s Etihad and letting state banks take a hit. Both options touch the sorest points of Indian finance: it's an awkward dilemma in the run-up to a general election.

Last deal for First Data carries late-cycle risk

16 January 2019

Fiserv’s $22 bln all-stock acquisition of the transaction processor at a 30 pct premium comes with plenty of cost savings. Revenue synergies would be icing on the cake. But as with KKR’s toppy leveraged buyout of First Data in 2007, market turns can undermine M&A logic.

Big Tech may face another front in D.C. battle

16 January 2019

William Barr, set to become U.S. attorney general, wonders how Silicon Valley “behemoths” like Amazon got so big. That hasn’t been a DOJ focus. Facebook’s clout was one reason for AT&T’s purchase of Time Warner, on whose board Barr sat. It could make him a new antitrust threat.

Swiss $4 bln freight battle has questionable cargo

16 January 2019

Activist investor Cevian has helped solicit a bid for subscale freight group Panalpina. Would-be owner DSV could face competition from Switzerland’s Kuehne + Nagel, handing shareholders a sweeter price. It’s less clear that either will make a return from a much higher offer.

Miners can close the confidence gap in 2019

16 January 2019

Stock markets point to a rough year for diggers, valuing each dollar of expected cash at a stubbornly hefty discount. Investors are fretting about a Chinese slowdown and don’t trust cashed-up bosses at Rio, BHP and the like to restrain themselves. The reality may be brighter.

Waning China FDI overshadows trade worries

15 January 2019

Foreign investment into mainland businesses grew less than 1 pct in yuan terms last year, to $131 bln. Flows to North America and Europe also tanked. Deepening suspicions are as much to blame as weaker demand. This retreat poses longer-term concerns than imports and exports.

Gannett’s dilemma is picking lesser of two evils

14 January 2019

A rival publisher wants to buy the USA Today owner for $1.6 bln. Gannett has repeatedly sliced costs and staff, to the detriment of news. MNG’s script is more of the same – and cuts are likely to be deep to justify a 23 pct premium. The public interest probably loses either way.

Newmont’s $28 bln gold merger is an alloyed good

14 January 2019

The U.S. gold miner is swallowing Canada’s Goldcorp in an all-share deal. Rivals Barrick and Randgold already bulked up in a similar deal, and the 17 pct premium is slim. Yet Newmont is handing over most of the benefits, and even those might be hard to extract.

L’Occitane picks odd time to bet on British beauty

14 January 2019

The Hong Kong-listed soap and hand cream brand has snapped up luxury skincare group Elemis for $900 mln in cash. At over 22 times last year’s EBITDA, the price looks a tad rich. The acquisition will also boost L’Occitane’s exposure to the UK at a time of economic uncertainty.

Temasek gives CapitaLand a new economy makeover

14 January 2019

The state investor will sell a real estate unit to the Singapore property giant for $4.4 bln. Temasek gets a majority stake in the heavyweight, which it already part-owns. With more exposure to e-commerce and developed markets, CapitaLand gets scale and downside protection.

AB InBev’s Asia sale needs breathalyser test

14 January 2019

The Belgian brewer is said to be mulling an IPO of its Asian unit. The region is a fast-growing jewel in the drinks giant’s crown, yet it faces stiff competition in China, and still struggles in India and Southeast Asia. The mooted $70 bln valuation will be tough to keep down.

Virgin takes low-risk punt to lift its UK flights

11 January 2019

Richard Branson’s airline is part of a group buying loss-making Flybe for a token 2 mln pounds. The domestic operator’s turboprops could funnel more people onto Virgin’s long-haul flights. Joining up with infrastructure firm Stobart and private equity firm Cyrus spreads the risk.

Chinese mystery beauty queen is ripe for makeover

11 January 2019

Pechoin is giving global cosmetics brands a run for their money in China’s $30 bln skincare market. Its revival from state-owned obscurity is impressive; it did so without outside investors or partners. As the economy cools, however, it could make an attractive acquisition target.

Temasek helps a drugstore giant flaunt its glow

10 January 2019

The state investor may sell part of its stake in health and beauty giant A.S. Watson. The retailer's size, moves upmarket in the mainland and growth elsewhere in Asia can justify a premium. Cashed-up buyout firms may well be tempted, helping Singapore to cash in on a $6 bln bet.

Hadas: Big mergers show capitalism’s bad side

9 January 2019

Celgene shareholders will welcome Bristol-Myers Squibb’s $74 bln takeover offer. The acquirer’s owners might eventually gain too. But such mega-deals distract managers and rarely serve workers or the common good. If corporate purpose was better and broader, they would be scarce.

Sika pays up to cement its takeover defences

8 January 2019

The Swiss chemicals firm is paying $2.6 bln for France’s Parex. After a lengthy battle with Saint-Gobain, bulking up to dissuade further approaches makes sense. Relying on revenue synergies to make a decent return on its new deal removes some of the gloss, though.

GE aircraft-leasing sale would be $40 bln moonshot

8 January 2019

Buyout firm Apollo may bid for the best bit of GE’s finance arm, testing CEO Larry Culp’s commitment to decluttering the U.S. conglomerate. Unless he can get a knockout price, though, selling a crown jewel could leave Culp looking like he’s out of options.