Mergers & Acquisitions

Saudi-Clariant chemical deal is murky concoction

18 September 2018

The Swiss group is setting up a joint venture with 25 pct shareholder Saudi Basic Industries. At the same time SABIC will contribute a new Clariant CEO and four board directors. Though the venture should make sense, the company’s governance becomes more complicated.

Financial crisis mostly put “D” in dealmaking

18 September 2018

Many of the bank investments and takeovers inked as markets cratered a decade ago brought at least as much pain as progress to the instigators. Think JPMorgan buying Bear and WaMu. Breakingviews looks back at some of the flops – and a couple of high-flyers.

Marsh & McLennan pays hefty price for global push

18 September 2018

The U.S. insurance broker is buying UK rival Jardine Lloyd Thompson for 4.3 bln pounds in cash. Mooted savings of $250 million a year don’t justify the hefty 34 percent premium. As competition heats up, Marsh is relying on JLT to continue its rapid growth in emerging markets.

Naspers takes first step to shrinking Tencent gap

18 September 2018

The South African group is valued at a hefty discount to its $120 bln stake in the Chinese internet giant. Floating its African TV unit should therefore provide some relief to frustrated investors. To unlock more value, though, Naspers may need to shed its remaining operations.

Indian bank deal offers welcome glimmer of reform

18 September 2018

A surprise plan to merge three state lenders leans on Bank of Baroda to form a group with $200 bln of assets. With an election coming next year, it’s a good sign that an overdue restructuring of the sector is back on the agenda. The details, though, are less inspiring.

The Benioffs become Time’s Person of the Year

17 September 2018

The Salesforce co-CEO and his wife are buying the magazine from Meredith for $190 million. They join the likes of Jeff Bezos and Laurene Powell Jobs, who have swooped in to save struggling news outfits. The cachet of old-school media brands appeals even to newish tech riches.

Reinsurers’ lean years will trigger M&A wave

17 September 2018

Insurers are bracing for $20 billion of damage from Hurricane Florence, following record losses in 2017. Rising claims aren’t the sector’s only problem: hedge funds and other new investors are eroding margins too. The best way to survive may be swallowing a rival.

Unilever shows wisdom of snubbing Kraft’s recipe

13 September 2018

The Dutch maker of Ben & Jerry is expanding faster, becoming a leaner company, and its investments are paying off. Kraft, meanwhile, looks light on ideas. Had Unilever accepted a merger offer two years ago, shareholders would be 15 pct worse off today.

Blackstone’s $5.5 bln bond inverts debt hierarchy

13 September 2018

Steve Schwarzman’s buyout firm is selling debt to fund its takeover of Thomson Reuters’ financial data arm. The terms allow the owners to pay themselves cash even in tough times. Such undemanding rules make these high-yield bonds look more like stock - but without the upside.

Chinese $5 bln winter sports bid is hard to beat

11 September 2018

Fujian-based Anta has approached Finnish ski-wear maker Amer. The offer values the group at a hefty 17 times EBITDA. Anta’s need to fend off U.S. peers in its home turf suggests it will pay more than any rival. Still, the target’s share price suggests investors aren’t convinced.

Japan’s Renesas speeds into autonomous M&A wreck

11 September 2018

The Tokyo-based chipmaker is buying U.S. peer Integrated Device Technology for $6.7 bln. A promised uplift in revenue from selling self-driving and connected-car technology sounds optimistic. Even if Renesas can achieve such synergies, the return on investment barely stacks up.

Rising generic-drug pressure may produce M&A panic

6 September 2018

Novartis has dumped part of its unit producing copycat medicines. Mylan and Perrigo are mulling sales, too. Regulators’ attempts to encourage competition and the emergence of a large nonprofit pill producer mean multiple sellers risk fetching only bargain basement prices.

China flaunts firepower in Canadian copper deal

6 September 2018

Zijin Mining agreed to buy Nevsun for $1.4 bln, trumping hostile suitor Lundin. A cash bid at a 57 pct premium mostly to bet on a project in Serbia speaks to Beijing's relentless appetite for important metals, but also to scarce supply. Pockets of outbound M&A exuberance persist.

Getty family takes negatives off Carlyle

5 September 2018

The founders of the eponymous stock-photo company are paying $250 mln to regain control after handing the camera to private equity a decade ago. Getty Images is swimming in debt, short on cash and growing slowly. Developing it into a healthy company requires sharp focus.

Prem Watsa’s Africa punt may avoid Greek tragedy

5 September 2018

The Canadian investor owns 41 pct of African bank Atlas Mara. Given Bob Diamond’s outfit just made a half-year operating loss, the risk is a re-run of Watsa’s awry Greek bank bet. Still, stabilising commodity prices means there’s more chance Watsa has bought in at the bottom.

Vodafone’s new CEO has sticks to repel activists

5 September 2018

The $57 bln telecom group’s sagging shares may have attracted Elliott’s attention. Newly-promoted Nick Read needs to show he can afford the pricey Liberty Global deal and still pay a fat dividend. Cost cuts and mobile-towers sales would soothe investors’ worries.

Bayer’s lowly valuation lacks positive catalyst

5 September 2018

The German drugs-to-seeds maker’s sales rose 9 pct in the second quarter, helped by its pricey acquisition of Monsanto. That deal is tarnished by lawsuits, while Bayer’s consumer and pharma units also face challenges. Though the bad news is priced in, the discount will persist.

Scor’s go-it-alone plan is short on growth

5 September 2018

After rebuffing an 8.3 bln euro bid from largest shareholder Covea, the French insurer promised to lift premium income by 5 to 7 pct a year. The board had good reasons to reject an offer worth just 1.3 times book value. Even so, Scor will struggle to achieve that price by itself.

China 5G ambitions cross wires with M&A logic

5 September 2018

Beijing might merge wireless carriers China Unicom and China Telecom, creating a $70 bln-plus telco giant - and a market duopoly. As with T-Mobile and Sprint, consolidation could accelerate development of ultra-fast networks. But industrial policy will limit financial benefits.

Latest Gulf bank merger is defensive on all fronts

4 September 2018

Abu Dhabi Commercial Bank is following UAE and Saudi peers in mulling a merger. Synergies from a tie-up with Union National Bank and Al Hilal Bank would offset oil-related headaches. But it also makes ADCB better able to challenge newly merged rival First Abu Dhabi Bank at home.