Mergers & Acquisitions

Siemens-Alstom train-deal economics trump politics

21 September 2017

The German firm may merge its train unit with the French peer Alstom, rather than Bombardier. That would create a global player in high-speed rail, but leave Siemens in an awkward embrace with joint-owner French government. It’s a price worth paying to create a European champion.

UniCredit has narrow lead in Commerzbank M&A fight

21 September 2017

The Italian bank wants to buy the 14 bln euro lender. BNP Paribas is also a reported partner. A deal makes sense: the target is cheap, and Germany needs to sell a stake. UniCredit’s scale gives it an edge, but Berlin may favour the French bank, or a domestic peer like Deutsche.

CRH deal cements its U.S. infrastructure bet

21 September 2017

The building materials company is buying Kansas-based Ash Grove for $3.5 bln including debt. It’s a full price for a group which likes to buy cheap. Despite doubts over President Trump’s pledge to rebuild highways and bridges, pushing into its key market makes sense for CRH.

AIA’s new boss gets a good deal in Australia

21 September 2017

New CEO Ng Keng Hooi is buying local life insurance units from the scandal-hit CBA. The move shores up AIA in an important market. Growth at the targets has been lacklustre. But a headline price of $3 bln implies a slim premium, with potential to grow sales and cut costs.

HTC tethers itself to a new virtual reality

21 September 2017

The ailing Taiwanese firm will sell part of its handset unit to Google for $1 billion. This will free up HTC to focus more on its risky but promising VR business, where it is winning market share. Deeper ties with the U.S giant might also help fend off rivals Sony and Facebook.

Uniper bid lacks spark for all bar E.ON

20 September 2017

Finnish utility Fortum’s plan to buy its German rival for 8 billion euros may create more losers than winners. Uniper's top shareholder E.ON has reasons to accept a 4.5 percent premium but its other investors will rightly grumble. Nor does the deal make much sense for the bidder.

Tata Steel deal crystallises overseas M&A pain

20 September 2017

The Indian group’s deal with ThyssenKrupp will shore up the ailing business it bought in 2007. But the joint venture will assume just a quarter of the European unit’s 9.5 bln euros of liabilities. That’s bad for Tata Steel shareholders. At least its rich parent is supportive.

Tata Steel JV pays ThyssenKrupp four dividends

20 September 2017

A historic joint venture with India's Tata will unshackle the German group from the fickle, capital-intensive steel industry. Lower pension liabilities, a share of synergies worth 3 bln euros and a more robust balance sheet are further benefits. Workers will fare better too.

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.