Gatwick’s new French pilot has tougher flight path 27 Dec 2018 Construction group Vinci is paying $3.7 bln for a majority stake, days after the London airport grounded flights due to stray drones. The price looks toppy given Gatwick’s already-slick operation and Brexit uncertainties. Seller GIP and its co-investors had a better landing.
Overleveraged AT&T is a magnet for activists 26 Dec 2018 Boss Randall Stephenson has piled on over $180 bln of debt to add entertainment to the U.S. telco’s core business. It’s a risky strategy, and any missteps could make AT&T look a bit like fallen icon General Electric. Breakingviews imagines a missive from a restive shareholder.
Disruption will be the mother of M&A in 2019 26 Dec 2018 Technological change will bring creative dealmaking – think Altria’s $13 bln investment in vaping outfit Juul. U.S. companies have cash, and buying into the new economy may beat building. The risk is the advertising problem: at least half the money may be wasted.
Euronext gives Oslo bourse surprise Christmas gift 24 Dec 2018 The pan-European group is ready to pay 625 mln euros for the Norwegian exchange. The festive offer already has the support of nearly 50 pct of investors. In the consolidating world of electronic trading, it’s getting harder to play alone. Accepting the holiday hamper makes sense.
M&A shops try jumping on activism’s new coattails 21 Dec 2018 Moelis and PJT are the latest to ramp up shareholder advisory efforts. The rising influence of passive funds mixed with deeper-pocketed investors targeting bigger firms means Corporate America needs more help. Offering defensive advice now can bag lucrative fees down the road.
Cevian, Nordea dangle truce in bank activism feud 21 Dec 2018 Lenders and shareholder activists rarely gel. But the Nordic bank welcomed the Swedish fund’s 2.3 pct stake. Cevian’s proposals for cost cuts are less radical than, say, a breakup, but could push Nordea’s return on equity to 14 pct. Its surplus capital could be a sweetener.
German takeaway truce delivers tasty value treat 21 Dec 2018 Delivery Hero is selling its German business to rival Takeaway.com for 930 mln euros. As with Uber's capitulation to Didi in China's car-share wars, it means an end to cutthroat competition in another gig-economy market - and relief for both companies' investors.
Asia’s beauty giants will apply a Western gloss 21 Dec 2018 J&J, Unilever and others have splashed out on cutting-edge cosmetics in Japan and South Korea. They want innovation, plus clout in China. Yet locals like Shiseido and snail mask supremo Amorepacific have cash and room to grow outside the region. They can reverse the M&A trend.
Viewsroom: Dealing in high anxiety 20 Dec 2018 Equity valuations are in the stratosphere and geopolitical risk is running hot. Breakingviews columnists predict how that’ll affect markets in 2019, from trade-war fallout to Indian privatizations, a Deutsche Bank rally and mining M&A. They also assess last year’s prognostications.
Altria’s $12.8 bln vaping punt tastes funky 20 Dec 2018 The Marlboro maker is paying a whopping multiple for 35 pct of Juul Labs - and cutting jobs and up to $600 mln of expenses just to cover interest costs. Meanwhile Juul is handing much of the cash to current owners and staff. It’s a risky bet that rapid growth won’t start to drag.
Japan Post’s Aflac stake is M&A ugly duckling 20 Dec 2018 The state-owned postal group will buy 7 pct of $34 bln U.S. insurer Aflac. It will get no direct say in the business, though, no board seat, and only limited voting rights. The dubious idea that minority stakes buy commitment to mutual gain, common in Asia, has reached its limit.
Renault-Nissan: Only merging makes financial sense 19 Dec 2018 The French and Japanese carmakers' lopsided stakes in each other are a poor use of capital. A full-blown marriage could boost their value by about 30 percent. That’s less likely after Carlos Ghosn’s ouster as Nissan chairman; the auto alliance is driving in the wrong direction.
Private equity returns will drop a digit 19 Dec 2018 Buyouts have tended to target – and achieve – an annualized harvest of at least 15 percent. It’s hard to see recent deals, with high valuations and creative treatment of earnings, matching that. Assume a modest drop in the market and mild slowdown, and 15 looks more like five.
GSK takes M&A steroids for strategic ailment 19 Dec 2018 The UK drugmaker will mesh its consumer health unit with Pfizer’s, gear it up and spin it off. That should leave more firepower for GSK’s weaker pharmaceutical division. Both businesses should be better off, if boss Emma Walmsley can invest wisely. That’s still to be seen.
India’s richest banker bets against the house 19 Dec 2018 Uday Kotak is challenging a requirement to cut his stake in the $32 bln Kotak Bank to 20 pct. The lender can absorb penalties imposed on others, and the rule may be misplaced. Yet the standoff endangers Kotak’s governance reputation – and could leave a cloud over the shares, too.
China’s three mobile carriers will become two 19 Dec 2018 As 5G investments ramp up next year, the country’s carriers will face mounting bills. That might make 2019 the year that the two smaller players, China Unicom and China Telecom, finally join forces. It would mean less competition, but officials have bigger prizes in mind.
Goldman Sachs will spend 2019 in velvet handcuffs 18 Dec 2018 New boss David Solomon starts the year with a mission to grow, lots of ambition and a crosstown rival that has steadily upped its game. A big deal – say, buying an asset manager – could help Solomon vault ahead of Morgan Stanley. That’s if the 1MDB scandal doesn’t bind his hands.
Carlyle’s Nigerian banking bet is down but not out 18 Dec 2018 The U.S. private-equity firm’s stake in Diamond Bank is worth only a fraction of what it paid after the ailing Lagos-based firm agreed to sell itself to Access Bank. A likely rights issue may worsen the financial pain. Carlyle's consolation is a slice of Nigeria’s biggest lender.
Boeing foots the bill for competitive misstep 17 Dec 2018 The aerospace giant lifted its offer for control of Embraer’s regional-jet business to $4.2 bln. It’s not the greatest deal – rival Airbus got Canada’s Bombardier for a song after Boeing’s aggressive trade tactics backfired. But it’s better to pay up than leave a flank exposed.
SSE comes off worse in energy M&A short-circuit 17 Dec 2018 The UK energy group’s plan to merge its retail unit with that of Germany’s Innogy collapsed, after a price cap undermined the transaction’s logic. Innogy can still do a deal with new owner E.ON. SSE’s transition to renewables looks murkier, and its generous payout more fragile.