Mergers & Acquisitions

Spain’s cheapest bank is only for the brave

30 October 2020

Sabadell is worth less than a fifth of its 11 bln euro book value. With rivals consolidating, it could become a target for BBVA or Santander. While lowly capital buffers leave little room for a spike in bad debts, cost savings worth 6 bln euros mean a deal could still make sense.

Corona Capital: Utah Jazz, Comcast, Kraft

29 October 2020

Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.

Arnault’s Tiffany tantrum was not worth the fuss

29 October 2020

The luxury tycoon trashed the U.S. jeweller’s management, went to legal war in Delaware and enlisted Paris to wriggle off the hook. In a U-turn, LVMH will now swallow its target for a discount of perhaps below $290 mln. That’s far less than the long-term hit to LVMH’s reputation.

Fiat and Peugeot need each other more than ever

28 October 2020

Jeep-maker FCA made a strong profit in its key North American market. That’s helpful for marriage partner Peugeot, whose European heartland faces new pandemic lockdowns. Neither has much business in rebounding China. Their 5 bln euros of merger savings can’t come soon enough.

Deutsche CEO will dust off Commerz merger in 2021

28 October 2020

Despite a recent trading boom, boss Christian Sewing will soon have to scrap his 2022 profit target. Since further cost cuts are tricky, reviving a 2019 aborted union with Commerzbank is the logical Plan B. It helps that his bank is now healthier, and regulators more forgiving.

Corona Capital: Drugmaker’s pick-me-up, Golf M&A

28 October 2020

Concise views on the pandemic’s corporate and financial fallout: Drugmaker GSK sees a recovery in vaccinations against old-school ailments; meanwhile Covid-19 turns out to be a handy driver when it comes to golf-related dealmaking.

Rejigged Tiffany deal would be face-saving truce

27 October 2020

LVMH and its U.S. target are trying to settle a bitter row over a planned $16 bln takeover. At $130 a share, French tycoon Bernard Arnault would save some $600 mln. That’s not massive. But he would control Tiffany before the key winter holiday season.

AMD finds going on offensive carries a high price

27 October 2020

The chipmaker is buying Xilinx for $35 bln. The $9 bln premium is worth more than three times the net present value of savings from the combination. CEO Lisa Su’s record is good though, so there may be some merit to the deal. At a minimum it puts Intel in a more difficult place.

Corona Capital: Binge-watching, Gaming

27 October 2020

Concise views on the pandemic’s corporate and financial fallout: Streaming viewers like to binge-watch, but they are being stingy; a fresh surge of Covid-19 cases could be a boon for gaming developers.

Bayer’s M&A comeback is reassuringly expensive

26 October 2020

The drugs-to-seeds company is buying gene therapy specialist Asklepios BioPharmaceutical for $4 bln. It’s a rich price, but the German group needs to offset patent expiries and shake off the disastrous Monsanto deal. Expanding in a rapidly growing sector offers some protection.

Coke bottler serves up flat cross-border deal

26 October 2020

Europe’s main distributor of the iconic soda offered $6.2 bln for its Aussie peer, hoping to tap fizzier markets and expand beyond Coke. Though Coca-Cola is taking a discount for part of its 31% stake in the target, scant synergies fail to justify the premium for other investors.

Four-year deal delay dims the romance of M&A

23 October 2020

China Oceanwide’s $2.7 bln takeover of Genworth has been postponed for the 16th time since it was unveiled in October 2016. Blame politics and the pandemic for the wait. Mergers that take this long to consummate make it hard to recall the benefits they were meant to provide.

Big Tech M&A crackdown will help boring rivals

22 October 2020

Companies like Oracle and IBM will benefit if Congress proposes a presumptive ban on acquisitions by Amazon, Apple, Facebook and Google. The giants have bought hundreds of firms in the last five years to aid growth. Deal limits may shake up lucrative sectors like cloud computing.

Iberdrola’s green deal is pricy bet on Biden win

21 October 2020

The $82 bln Spanish utility is buying U.S.-based PNM Resources for $8.3 bln including debt. Without synergies, the price looks punchy. But given wind and solar assets could get even dearer if Joe Biden becomes president and oil majors charge in, moving now has some logic.

Shale M&A conflicts aren’t just all in the family

20 October 2020

A deal between two Texas drillers – involving a father and son – may be in the works. It looks like a bailout of sorts, so convincing outsiders of a fair deal will be hard. Other conflicts in shale M&A, like executive pay, loom large. Texas may be big, but the oil club is small.

Vinci slump makes case for $6.1 bln energy deal

20 October 2020

The industrial group has warned of a steep fall in earnings partly due to lost airport sales. That fortifies the logic for a recent cash-and-shares offer for ACS’s energy division. Trading a 5% stake to the Madrid-based company for a steadier business looks increasingly sensible.

Ambani succession is chance to divide and rule

20 October 2020

Asia’s richest man could divvy up the $200 bln Reliance empire between his three children. That would help avoid a repeat of his epic sibling feud. Yet scale and breadth bring influence. A carve-up that manages to keep family interests aligned could create a legacy to rival the Agnellis.

Homes deal offers rare price higher than pre-Covid

19 October 2020

Ares and Pretium want to buy U.S. residential landlord Front Yard at a higher value than a pre-pandemic deal that was terminated. Housing looks surprisingly healthy despite economic woes. It helps that typical consumers – and investors – are hurting less than previously assumed.

Texas shale deal starts a sprint to nowhere

19 October 2020

ConocoPhillips is scooping up Concho for $10 bln after the oil price rout cut its stock nearly in half. Cost cuts are in theory worth three times the premium. But drillers consistently burn cash. Consolidation helps, but oil’s dimming future means they are racing against time.

Alibaba grocery deal may stall at final checkout

19 October 2020

The Chinese e-commerce giant is buying out its French partner in supermarket chain Sun Art, for $3.6 bln. A mere 2% premium suggests an eager retreat for the seller. Given Alibaba’s brick-and-mortar ambitions, minority shareholders have less reason to settle for a discount price.