Hostile Japanese deal propels Abe’s third arrow 18 Mar 2019 In a rare act of corporate aggression, trading house Itochu snatched a degree of control over $1.8 bln sportswear maker Descente. Toshiba faces an investor revolt, while Alps Alpine has been sued over governance. Japan’s structural reforms are faster finding their targets.
RWE’s German carve-up looks better than E.ON’s 14 Mar 2019 A year after a 17 bln euro asset swap, the German utilities’ deal is in Brussels’ antitrust sights. It’s more an issue for E.ON, which may lose out if forced disposals erode hoped-for cost savings. RWE, meanwhile, seems to have chosen the right time to bulk up in renewables.
Oaktree investors get sharp end of the stick 13 Mar 2019 Brookfield is paying $4.8 bln for Howard Marks' and Bruce Karsh’s credit specialist, a 12 pct premium for a company that has underperformed for years. The Oaktree founders get to stay around with unlisted equity. It’s a lopsided deal, and a lesson in how asset management works.
EDP overhaul makes Chinese bid look extra stingy 12 Mar 2019 The Portuguese utility will sell assets to cut debt and invest in renewables. It looks like a balancing act between the demands of activist Elliott, and Portugal’s government. But the potential boost to EDP’s value bolsters the case for rejecting an offer from China Three Gorges.
Nvidia chip deal big on vision and price 11 Mar 2019 The $94 bln graphics-chip company’s $6.9 bln acquisition of Mellanox, which makes hardware for data centers, is a bet that data will grow rapidly, and chip speeds only slowly. That view looks solid. But the price, pumped up by competing bids, presupposes a lot of success.
Barrick wisely decides harmony is golden 11 Mar 2019 The gold miner has struck a joint venture with Newmont, an $18 bln rival it earlier tried to acquire. Both sides should win. Newmont gets to pursue its own deal with Goldcorp. Barrick shareholders are spared the risk of an aggressive merger that left them with little to gain.
Deutsche creditors will win in a Commerz deal 11 Mar 2019 Merging the two sickly lenders would give the bank run by Christian Sewing access to Commerzbank’s deposits, and cheaper funding. But he might need to raise fresh capital. While shareholders may have to wait for a decent return, bondholders can hope for immediate gains.
French incursion jumpstarts Deutsche-Commerz talks 10 Mar 2019 Germany’s largest bank, worried that BNP Paribas was coveting its quarry, Commerzbank, gave CEO Christian Sewing a mandate to discuss a tie-up three weeks ago. A nationalist sop might lubricate a deal with German policymakers. But it won’t change the underlying economics.
Regulator makes Provy deal subprime in all senses 8 Mar 2019 High-interest lender Non-Standard Finance has revealed its bid for Provident Financial may fall foul of the Financial Conduct Authority. That hits the Provy’s defence strategy – but also NSF’s own post-deal outlook. Investors are entitled to wonder what the point of it now is.
Viewsroom: Hostile gold diggers 7 Mar 2019 The three-way takeover fight involving Newmont, Barrick Gold and Goldcorp is full of aggression and big egos. Breakingviews columnists unpick the gold-mining M&A frenzy and debate whether cooler heads can prevail. Plus: China telecom giant Huawei has a public-relations challenge.
Cox: Unilever can’t help but mull a Kraft pounce 7 Mar 2019 The tables have turned since the Cheez Whiz maker bid for its rival. At $40 bln Kraft is worth a quarter of its erstwhile prey. Unilever can afford a deal, export its culture and reap synergies. But Kraft’s portfolio may be a poison pill unless used as a prelude to exiting food.
KKR left to recount beans in Australian deal 7 Mar 2019 The $1.4 bln buyout of accounting software developer MYOB was all but in the books. Now a hedge fund owning 10 pct is unexpectedly demanding a much higher price. With KKR sitting on a one-fifth stake and the broader stock market turning up, the numbers may be harder to reconcile.
Barrick can learn from mining’s golden oldies 6 Mar 2019 The gold miner seems to be warming to the idea of a joint venture rather than a merger with $18 bln rival Newmont. There’s a precedent: a decade ago BHP ditched a hostile bid for Rio Tinto in favor of a friendly iron-ore tie-up. That failed, but this time can be different.
Aon shows humble pie is a dish best eaten swiftly 6 Mar 2019 The insurance broker’s shares rebounded after it ditched its pursuit of Willis Towers Watson a day after admitting interest. As miner Barrick is finding, it’s awkward sticking with a deal investors distrust. Moving on early helps avoid permanent dents to credibility.
Aon’s big deal suggests size without benefits 5 Mar 2019 The insurance broker is mulling an all-share bid for $24 bln rival Willis Towers Watson. There’s a precedent: Willis Towers Watson itself resulted from a merger that delivered additional revenue, lower taxes and cost cuts. This time round, it’s hard to see the attraction.
Buffett airline bet no longer pie in the sky 5 Mar 2019 Has the Oracle of Omaha changed his view that airlines are an investment “death trap”? He now owns stakes in some, and wouldn’t rule out buying one outright. It might be the airlines that have changed, though. Consolidation and smarter pricing have made the industry more resilient.
Gold miners bury a good deal under two shiny ones 4 Mar 2019 Newmont has rejected an $18 bln stock offer from Barrick, saying shareholders fare better in its agreed purchase of Goldcorp. But Barrick’s arguments – and bigger benefits for Newmont’s owners – hinge on the two joining forces in Nevada. Neither merger is required for that.
Battle for Oslo Bors shows bidders’ fatigue 4 Mar 2019 Nasdaq has hiked its offer for the Norwegian exchange to 158 Norwegian crowns a share, or $788 mln, on a par with an already raised bid by Euronext. Its scale in the region gives it a minor edge. But the face off shows both suitors are already at the limit of financial logic.
LVMH-Pernod bid talk makes for watery cocktail 4 Mar 2019 Ever since activist Elliott showed up at Pernod, Paris has been awash in speculation that LVMH covets the $46 bln spirits group. Adding booze brands like Absolut to its portfolio would dilute LVMH’s luxury profile. Bernard Arnault’s public disavowal of a deal is believable.
AT&T uncovers hidden costs of media deals 1 Mar 2019 HBO boss Richard Plepler is leaving not even a year after the telco acquired parent Time Warner for $85 bln. The “Game of Thrones” network is a jewel and Plepler is a talent magnet. People can be replaced. It just makes an expensive deal even more so.