Savvy T-Mobile US bet caught in political warfare 26 Jul 2019 The DOJ has approved CEO John Legere’s $26 bln merger with SoftBank’s Sprint, with concessions. But victory is not yet assured. Most of the 13 states suing to block the deal are sticking to their guns. The tie-up could yet be collateral damage in a divided America.
Del Vecchio’s grand M&A vision needs clearer focus 26 Jul 2019 Having merged his Luxottica frames empire with lens maker Essilor, Leonardo Del Vecchio is offering 7 bln euro for retailer GrandVision. A deal will double his share of Europe’s eyewear market. But it brings few savings and adds extra complexity to a group with messy governance.
DowDuPont shows M&A demands timing – and humility 25 Jul 2019 Two chemical companies merged to form a $130 billion behemoth and then split into three. The goal was to boost shareholder value. That has so far been thwarted by the business cycle and other factors. Complexity has also played a role. It’s a lesson for ambitious dealmakers.
Renault’s de-Ghosnification helps up to a point 25 Jul 2019 The French carmaker is parting ways with bankers and other consiglieri tied to former CEO, and recent Japanese jailhouse guest, Carlos Ghosn. It may help Chairman Jean-Dominique Senard put his stamp on the $17 bln group. But the government is still an obstacle to merger hopes.
UK defence buyout is Exhibit A for cash glut 25 Jul 2019 Private-equity firm Advent and Blackstone funds are buying Cobham for 4 bln pounds, larding up to 2.5 bln pounds of leverage onto a company that has worked hard to have essentially none. It suggests both equity and debt investors have plenty of money and limited opportunities.
Jollibee risks indigestion with U.S. coffee deal 25 Jul 2019 The $5 bln Philippine fast-food chain is buying Los Angeles-based retailer The Coffee Bean & Tea Leaf. It gives Jollibee 1,189 stores, over 400 of them in fast-growing Southeast Asia. But the company is losing money in the battle with Starbucks. A quick turnaround looks unlikely.
Vivendi’s music bankers have a tough job ahead 24 Jul 2019 Vincent Bolloré’s $35 bln media group will soon appoint advisers to sell up to 50% of music label Universal, Reuters reported. That will cheer investors, who have waited a year to see progress. But it will be hard to find a buyer who is happy to let the Frenchman call the shots.
Big Ski is a boon for investors, if not for skiers 22 Jul 2019 Vail Resorts’ $264 mln deal for Peak Resorts brings 17 mostly bunny hills to the operator of some of North America’s sweetest slopes. Like all things ski-related, the price is high. But Vail can justify the 100%-plus premium by jamming skiers into its premier mountains.
Barrick CEO lets hard image slip for sensible deal 19 Jul 2019 Mark Bristow will, after all, pay up to buy out 36% of Acacia Mining in a transaction worth over 50% more than the gold miner’s offer in May. It’s a small victory for minority owners, whose company is under fire from Tanzania’s government. But for everyone, it beats a standoff.
Miner exits shift coal spotlight to Anglo American 16 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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.