Sony loudly demonstrates love of content with EMI 22 May 2018 The Japanese group is buying 60 pct more of EMI Music Publishing from a consortium led by Mubadala. A valuation of $4.8 bln, or 19 times EBITDA, is deafeningly expensive. It leaves no room to doubt new boss Kenichiro Yoshida’s belief in a streaming-led recovery for the industry.
French telco M&A requires more than regulatory nod 22 May 2018 The sector’s supervisor has had a change of heart and is now open to dealmaking. Price wars and investments have bled operators dry. The weakest, Altice and Iliad, are the likeliest targets. But the former is too laden with debt and the latter may be cheaper in a year’s time.
Emirates NBD’s Turkish deal riskier than it looks 22 May 2018 The Dubai-based lender is paying Russia’s Sberbank $3.2 bln for Denizbank, Turkey’s fifth-largest bank by assets. NBD is buying a high-return asset near book value, and gets to diversify its top line. Yet Turkey’s rising risks reduce the extent to which this is a bargain.
Insurers risk retreading banks’ pre-crisis folly 22 May 2018 Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.
Blackstone relives Hilton on a boutique scale 21 May 2018 The buyout firm offered $3.7 bln for hotel operator LaSalle, wading into a bidding war just after it sold its remaining stake in Hilton. That earlier deal took more than a decade to close out. With riskier properties and a higher valuation, this new foray will be tougher.
Wall Street data merger chases $10 trln dream 21 May 2018 IHS Markit is snapping up Ipreo from Blackstone and Goldman for $1.86 bln to bulk up the information it can sell on alternative assets from private equity to real estate. It’s a booming area crying out for more transparency – and spurring plenty of competition on data.
Bank investors lose the plot over $4.7 bln merger 21 May 2018 Fifth Third is paying a 24 pct premium for fellow U.S. lender MB Financial. The Chicago-based target gets the better deal – it has struggled to grow earnings and lent almost to its limits. But cost cuts and the logic of consolidation make Fifth Third’s share slump look excessive.
GE CEO finally shunts turnaround plan onto tracks 21 May 2018 John Flannery is selling the struggling conglomerate’s sputtering locomotive unit to Wabtec for $2.9 bln and half of the new outfit, most to be spun off to shareholders. It’s not transformational but it removes a big headache and indicates how Flannery might shed other assets.
ArcelorMittal paying an odd bid “premium” in India 21 May 2018 The world's largest steelmaker is ready to cover $1 bln of debt in a tiny rival it no longer backs so it can buy bankrupt Essar. A quirky rule bans owners of defaulting companies from acquiring distressed assets. It's a sign of how India’s bankruptcy law is a work in progress.
PayPal takes $2.2 bln step into physical payments 18 May 2018 The online pioneer is buying iZettle, which provides mobile card readers to small merchants. The valuation is higher than U.S. rival Square, and twice the Swedish group’s mooted IPO value. For PayPal, though, it’s a worthwhile move to expand its appeal to real-world retailers.
Barclays trolls activist with Irish mortgage foray 18 May 2018 The UK bank has bought a 4.3 bln pound book of Irish mortgages for 4 bln pounds. With fees from securitising the loans and investors lined up, the deal could make sense. But it sits awkwardly alongside new investor Edward Bramson’s strategy to prune the investment bank.
CBS, Shari Redstone litigate selves off M&A rails 17 May 2018 A judge denied the $20 bln media firm’s restraining-order request against its controlling shareholder. But CBS may be able to argue Redstone is breaching her fiduciary duty. It almost ensures a long legal drama that’ll shunt deals with Viacom or other companies onto the sidings.
Ocado investment case requires heavy guesswork 17 May 2018 The UK retailer’s shares rose 45 pct after U.S. grocer Kroger agreed to use its online-delivery technology and take a 5 pct stake. The deal solves Ocado’s cash flow problems. But a valuation of almost four times sales is toppy given scant detail on its international partnerships.
China’s Portuguese power bid may yet lure rivals 17 May 2018 It’s no surprise that EDP rejected a lowball 12 billion euro approach from China Three Gorges. The Chinese state’s effective 28 pct stake in the utility suggests a counterbid has little chance of success. But some European utilities may yet have grounds to get involved.
Walmart could be spreading itself too thin 16 May 2018 The $250 bln retailer is paying $16 bln for most of India’s Flipkart, its biggest buy yet, even as it exits other overseas forays. Boss Doug McMillon is also up against Amazon on his home e-commerce turf – and he’s promising to keep on buying back shares. It’s a lot to juggle.
Zoetis gives $2 bln vet deal luxury treatment 16 May 2018 The animal-health giant will on the face of it only get a 2 pct return on investment from buying diagnostics firm Abaxis. It’s betting more owners globally will shell out big bucks on their pets – and so fluff up earnings. If not, $40 bln Zoetis will be nursing a dog of a deal.
Saudi bank merger hedges against homegrown risks 16 May 2018 SABB and Alawwal Bank’s all-share merger creates a $77 billion lender by assets, the kingdom’s third-largest. For major investors HSBC and RBS, synergies offset anaemic domestic loan growth. And if Saudi’s economic revival goes awry, it gives them a more valuable entity to sell.
China’s Chile deal highlights a battery dilemma 16 May 2018 Tianqi Lithium is set to buy a stake in the $14.9 bln SQM. That suggests worries about excessive Beijing control over the key battery ingredient’s supply have eased. Still, the People's Republic would raise its share of output, hampering resource-rich nations’ scope to push back.
Europe’s payments crown does not come cheap 15 May 2018 Worldline is paying 2.3 bln euros for the credit card processing arm of Switzerland’s SIX. That will strengthen its position as Europe’s largest electronic payments group. But the French company had to pay a hefty multiple - and accept a humdrum return - to secure its dominance.
Vodafone CEO leaves hard work to his successor 15 May 2018 Vittorio Colao will be replaced by CFO Nick Read. Discipline in M&A and investment has helped the $72 billion mobile group beat peers’ returns. Read’s job is to make a success of the giant Liberty Global deal at a company that’s more used to pruning than growing its portfolio.