Mergers & Acquisitions

Soccer world will miss Chinese sugar daddies

20 July 2017

State media has questioned Suning’s purchase of Inter Milan, part of a $3 billion mainland soccer splurge, amid an offshore M&A clampdown. The acrobatic financing of AC Milan may attract Beijing’s attention next. Benching Chinese buyers could hurt cash-strapped European clubs.

Wanda and Sunac go back to M&A 101

20 July 2017

The Chinese developers have been forced to rejig their $9 bln property deal. The result is a less fiddly structure with a third party. That might get the sale through, but Wanda's long list of problems make it unclear if it is any closer to its bigger goal of listing onshore.

McCormick may struggle to digest $4.2 bln deal

19 July 2017

The $12 bln spice vendor is paying a fat 20 times EBITDA for the mustard and hot-sauce business of Reckitt Benckiser. With modest synergies in prospect, McCormick will need strong growth to pay down debt. Investors have reason to question the acquisition’s aftertaste.

Hadas: No auction often beats a bad auction

19 July 2017

Governments and Google are fans of auction theory, which teaches how to extract the highest bids for assets like radio spectrum or online ads. But the branch of economics cannot say if the price is fair. Auctions too often confuse consumers and tarnish the image of capitalism.

Discovery, Scripps tie-up a subscale DIY fix

19 July 2017

The cable network part-owned by John Malone may be in talks to combine with its smaller peer. A deal with the producer of HGTV would give Discovery more clout with distributors, but it would still be a bit player in a fast-changing industry. Bigger pockets might get the job done.

Reckitt shows bigger rivals how it’s done

19 July 2017

The UK company sold its French’s Mustard unit to U.S. food group McCormick for $4.2 bln, a spicy 7.4 times sales – even though there’s no recovery story and limited synergies. With buyers this hungry, less efficient peers Unilever and Nestlé ought to emulate Reckitt’s recipe.

Akzo’s misguided strategy will weather CEO change

19 July 2017

The Dutch paint maker’s new boss Thierry Vanlancker inherits his predecessor’s fanciful mid-term targets. The goals are backed by Chairman Antony Burgmans, a key opponent of a deal with PPG who may now find his position strengthened. Real change at Akzo is even less likely.

Einhorn’s bold Toshiba play has just enough logic

19 July 2017

The Greenlight boss unexpectedly took a stake in the beleaguered Japanese group, betting it's hit bottom. That's gutsy, but not necessarily reckless: Toshiba is closer to selling its chip business, which could give it much-needed financial relief and unlock value in other units.

Wanda’s M&A punishment is too much, too late

17 July 2017

Chinese banks have been ordered to halt lending to entertainment and property giant Dalian Wanda, Reuters reported, in what looks like retroactive punishment for big foreign investments. Such blurry lines around what is and isn't allowed do Chinese outbound investment no good.

GLP logistics buyout just about gets from A to B

14 July 2017

The Singaporean group accepted a S$16 bln offer from its own CEO and Chinese buyout firms. The decision seems more about deliverability than price, which is a worry when buyers are also insiders. Still, the 25 pct premium adds enough financial bubble-wrap to ensure safe passage.

Uber plucks success from Russian game of chicken

13 July 2017

The ride-hailing service’s efforts to expand in eastern Europe didn’t have a chance at usurping Yandex – but it did make its rival’s losses balloon. Combining the businesses allows both to escape this trap, with a big paper profit for Uber.

Speed bump warranted in China-Chicago bourse trade

13 July 2017

Some U.S. lawmakers want the SEC to block the sale of the Midwest exchange to Chinese investors. Their concerns are largely fear mongering. But as self-regulators, all such venues will soon get access to customer data as part of a new audit trail. That justifies closer review.

Japan Tobacco drags itself into final frontiers

13 July 2017

The maker of Camel has a shrinking share of its home market. A mooted purchase of Philippine assets from troubled Mighty for $890 mln will give Japan Tobacco a lift in a nation where people are still lighting up. But it also underscores the firm's existential growth challenges.

Amec probe pollutes tricky oil merger

12 July 2017

John Wood Group shares fell more than 6 percent after the company it is taking over, Amec Foster Wheeler, said it was under investigation for possible bribery. The probe was a known risk, but the bad timing, combined with a low oil price, makes the 2.2 bln pound deal look rash.

Sunac and Wanda charm market with trust loan magic

12 July 2017

Property giant Dalian Wanda has lent its credit profile to rival Sunac to help it buy $9.3 bln of Wanda's own properties. Investors are enthusiastic, but the deal relies on a class of shadow financing that is increasingly unpopular with regulators for good reason.

Elliott tests one of Warren Buffett’s golden rules

11 July 2017

Paul Singer's hedge fund has cobbled a rival bankruptcy-exit plan for Energy Future, challenging Berkshire Hathaway's $9 bln deal. The new offer may be a stretch, but Buffett famously eschews competitive processes. He also needs approval from creditors, one of which is Elliott.

Pearson’s $1 bln Penguin sale papers over cracks

11 July 2017

The education group is selling almost half its 47 pct stake in Penguin Random House to co-owner Bertelsmann. Pearson has maximised the cash proceeds, but the valuation looks low. With a still-troubled core business, boss John Fallon is running out of assets to sell.

Rare sense prevails in reworked U.S. utility deal

10 July 2017

Great Plains tried to buy next-door power provider Westar, but regulators nixed the plan. In a new roughly equal $14 bln merger, the target gets a lower headline price and the buyer less control. It's an unusually pragmatic compromise considering how often egos undermine M&A.

German takeover regime is loser from Stada saga

10 July 2017

Regulators blessed a slightly higher 5.3 bln euro offer for the drugmaker from Bain and Cinven. The decision frees the buyout firms from a one-year wait after a previous bid failed. Though Stada and its shareholders cheered, the victory makes German M&A less predictable.

Sunac seals China knight role with $9 bln Wanda buy

10 July 2017

The indebted developer is taking a big portfolio of tourism and hotel properties from Dalian Wanda, allowing the latter to reduce debt. Sunac has already splashed cash to help troubled tech startup LeEco. The latest overtures will add to Sunac's imposing mountain of leverage.