Mergers & Acquisitions

Miner exits shift coal spotlight to Anglo American

16 July 2019

BHP is the latest heavyweight to consider a sale of thermal coal assets. That's sensible given weak prices, pressure from investors and a business that is barely material. Anglo's bigger exposure means a tougher choice - with few buyers, there’s a case for staying the course.

Meal delivery crowd is ripe for M&A takeout

12 July 2019

Americans are ordering more food at home, but too many well-funded companies are fighting to deliver it. Small firms like Postmates should sell. The likes of Uber or DoorDash can afford to pay a premium to keep it out of the hands of rivals, and increase their odds of survival.

Thomas Cook wipeout forces Fosun to double down

12 July 2019

The ailing UK tour operator is finalising a 750 mln pound recapitalisation which would give creditors control of the airline and the Chinese group its travel unit. That allows Fosun to salvage its 250 mln pound equity stake. Other shareholders are likely to be left with nothing.

CBS and Viacom could be media’s own Switzerland

11 July 2019

A merger of the two media firms backed by the Redstone family is likely. But what then? CBS-Viacom will still be no match for rivals Disney and Netflix. Its best move may be to stay neutral, make content and leave streaming wars to rivals – provided it can keep ambition in check.

Frere family’s private push is double-edged sword

10 July 2019

GBL, the holding company of Belgium’s Frere and Canada’s Desmarais families, may buy part of a 2.4 bln euro call-centre operator from KKR. CEO Ian Gallienne’s shift into unlisted assets could boost returns. But thin disclosure means his shares will suffer from a steeper discount.

Wall Street minnows pitch merger nirvana

9 July 2019

Piper Jaffray’s CEO reckons a $485 mln purchase of Sandler O’Neill will double his margins, without cost cuts or new revenue. The target’s capital-lite business is one factor; the buyer’s subpar performance is another. In relative terms the tie-up’s returns will just be middling.

Cisco’s latest deal is an optical illusion

9 July 2019

The networking giant is paying $2.8 bln for Acacia, one of its suppliers. Booming bandwidth use is driving demand for its high-speed optical components, but a lofty 46% premium virtually guarantees subpar returns. It’s an odd choice when software is driving Cisco’s margin growth.

Branson’s space deal defies financial gravity

9 July 2019

The bearded billionaire is selling half his cosmic travel group to former Facebook executive Chamath Palihapitiya’s blank-check vehicle. A $1.5 bln valuation looks rich given Virgin Galactic’s record of two test flights. Still, it needs cash, and Palihapitiya has too much of it.

German $4 bln lighting bid is radiant enough

4 July 2019

Bain and Carlyle’s offer for Osram Licht is fairer than the small premium suggests, especially as returns could be humdrum. While the board and investors might have hoped for more, rejecting the deal will leave shareholders stuck with a shrinking company in need of restructuring.

ChemChina vexes Beijing’s bureaucrat dealmakers

4 July 2019

In an odd display of buyer’s remorse, the country’s envoy to Switzerland has slammed the $43 bln takeover of Syngenta in 2017. It hints at the complex politics of such M&A. The reaction also calls into question the many orchestrated mega-mergers involving state-owned giants.

Broadcom’s Symantec swoop rests on tricky reboot

3 July 2019

The chipmaker led by Hock Tan is in talks to buy the troubled $14 bln cybersecurity outfit. It’s another move to diversify after its bid for Qualcomm was crushed. To earn a return, Tan will need to repeat recent integration success, cut costs, and manage hard-to-quantify risks.

Canada’s student flat deal hedges its UK bets

3 July 2019

The Canada Pension Plan Investment Board has sold university housing player Liberty Living to Unite Group for 1.4 billion pounds. The seller’s small premium is offset by the buyer’s synergies. CPPIB gets to cash out, but a 20% stake creates upside if student inflows endure.

Nexon suitors must clear three tough levels to win

3 July 2019

Plans to sell control of the $13 bln maker of “MapleStory” and other video games have stalled, but may yet be revived. Bidders like KKR will have to get past a messy corporate structure. Then there’s South Korean nationalism to slay. And the last big challenge is China's Tencent.

Brookfield on slow train to infrastructure payback

1 July 2019

The investor and Singapore’s GIC are buying U.S. railroad group Genesee & Wyoming for about $6.4 bln. The return on total investment works out under 5%, partly reflecting the scarcity of transport assets. Brookfield at least has the portfolio and experience to squeeze out more.

DP World nets decent deal due to tricky IPO waters

1 July 2019

The $13 bln Dubai-listed port operator bought energy shipping company Topaz for $1 bln including debt. The buyer has avoided overpaying by sticking to its guns on the price. And Renaissance Services, the majority owner of the target, avoids a risky shot at a public listing.

Japan Display could use a solid AppleCare plan

1 July 2019

The iPhone-screen maker is getting a $100 mln lifeline from its most important customer as part of a messy bailout. It’s a rare sort of investment for Apple, but it has few alternative suppliers for the item. The imprimatur also should help Japan Display shore up other backers.

American M&A makes excess great again

28 June 2019

U.S. deals jumped 19% in the first half even as activity ebbed in Europe and Asia. Topping the list are pricey purchases by AbbVie, Bristol-Myers and Occidental, plus Raytheon’s questionable merger with United Technologies. Most buyers’ owners will regret their CEOs’ ambitions.

Blackstone opens child-friendly Legoland LBO ride

28 June 2019

The private equity firm will help Denmark’s founding Lego family take Merlin Entertainments private for $6 bln. Rather than slashing costs and flipping the theme park owner, they’ll invest in growth. The trade-off is that returns may be much lower than a typical leveraged buyout.

John Malone’s M&A nous gets short shrift in Europe

28 June 2019

The cable cowboy’s Liberty Global should get $15 bln of cash from Swiss and German asset sales. A lowly share price means investors are worried Malone will waste the money. That’s unmerited: share buybacks and further selloffs seem likelier than a risky acquisition.

Singapore Airlines reroutes back to Malaysia

28 June 2019

The $8 bln carrier is deepening ties with its struggling Kuala Lumpur rival, from code-sharing to maintenance. It may be a precursor to merging again nearly 50 years after the two split. Reuniting would benefit both, but politics and regulation will be hard to navigate.