Tesla’s bid for SolarCity is mad science 21 Jun 2016 Elon Musk’s electric-car maker has offered to buy the solar-panel installer he also backs for up to $2.8 bln. The idea of a renewable-energy roll-up is at best way early and at worst wild. It looks like a way to boost SolarCity’s languishing stock at the expense of Tesla’s.
Bollore’s Italian playbook won’t work at Ubisoft 21 Jun 2016 Vivendi, controlled by the French tycoon, owns over 20 pct of the video game maker and wants board seats. That tactic worked at struggling Telecom Italia, but Ubisoft is a different proposition whose founding family won’t go down without a fight. Minorities shouldn’t either.
Kion’s forklift deal assumes serious heavy lifting 21 Jun 2016 Europe’s largest forklift maker Kion is paying $3.3 billion for U.S. logistics tech company Dematic. That’s 20 times last year’s operating profit. To earn its cost of capital, the buyer might have to wait until 2020 and make rosy assumptions on revenues, margins and synergies.
Tencent displays financial skills in Supercell buy 21 Jun 2016 A consortium led by the Chinese gaming giant will buy 84 pct of the Clash of Clans maker for $8.6 bln. Tencent will have voting control, yet will invest less than half that sum in equity. It’s a shrewd way to reduce the risks of buying into a notoriously hit-driven business.
Going Dutch is the future for European brokerage 21 Jun 2016 Rabobank and Kepler Cheuvreux have agreed to let the Netherlands-based bank keep client relationships while using the French equity house’s research and sales. New European rules will make the cost of sellside analysis explicit and thus often uneconomic. Such tie-ups make sense.
Wal-Mart picks right battle in China with JD deal 21 Jun 2016 The U.S. giant is selling its local website to rival JD for $1.5 bln in stock. Wal-Mart only recently took full control of the unit. But battling Alibaba and JD would have been difficult and costly even for the world’s top retailer. Now it can focus on boosting offline sales.
Siemens’ M&A timing needs a spot of fine-tuning 20 Jun 2016 The German group overpaid for U.S. oil kit maker Dresser-Rand just before the oil price collapsed. Now it is to fork out $1.1 bln to team up with wind turbine rival Gamesa, whose shares have rallied in recent years. Had it got its timing better, Siemens could have saved $3 bln.
Abu Dhabi bank M&A could ease state’s fiscal fix 20 Jun 2016 A union of state-held National Bank of Abu Dhabi and the smaller First Gulf Bank makes sense in an era of low oil prices. But with public spending cut 20 pct last year, Abu Dhabi could also use the cash. A value-creative merger could in due course herald a Saudi Aramco-style IPO.
Vanke’s white knight leaves shareholders in a bind 20 Jun 2016 China’s top property developer wants to buy land from Shenzhen’s metro operator for $6.9 bln in stock. If approved, this would help Vanke see off an unwanted suitor. Diluting existing shareholders is hardly investor-friendly, but vetoing the deal would not do much good either.
Siemens and Gamesa’s tie-up puts wind in their sales 17 Jun 2016 The German engineer is handing its wind assets and 1 bln euros to the Spanish group in return for a 59 pct stake. In wind power, scale matters. Combining Gamesa’s onshore emerging-markets presence and Siemens’ offshore developed-market focus also sounds a good idea.
ASML’s $3 bln deal is a big bet on tiny tech 16 Jun 2016 The semiconductor-equipment maker is buying Taiwan's Hermes Microvision. The target's sales have plunged and global chip demand is cooling. But ASML's biggest-ever deal should make it even more indispensable to manufacturers as they prepare to make next-generation chips.
U.S. medical merger offers little financial cure 15 Jun 2016 AmSurg and Envision are combining in a $10 bln stock deal with each owning roughly half. They’re keeping two headquarters and yet still expect $100 mln of synergies, including “meaningful” ones from new revenue. It’s a dubious proposition that seems mostly like empire-building.
If Schneider wants Aveva, it should get real 15 Jun 2016 The French group has egg on its face after the UK software-maker snubbed a merger bid for the second time. Schneider’s decision to use a similarly over-complex deal structure hints at why. Given an Aveva tie-up still makes strategic sense, an all-cash offer is the way to go.
Fantasy-sports merger would face harsh reality 14 Jun 2016 There may be logic to uniting FanDuel and DraftKings for backers that include Fox, Google, Comcast and KKR. The legal-defense synergies alone sound promising, although a deal could ignite new antitrust concerns. State lawmakers also can curb one big site as easily as two.
China engineers low-risk $3 bln chip deal with NXP 14 Jun 2016 Beijing’s appetite for overseas semiconductor assets is controversial. Yet NXP is selling a commodity business, based in Europe, to a familiar Chinese buyer at a reasonable price. So this deal is less likely to short-circuit for either regulatory or financial reasons.
Tech-company cash hoards come with a big asterisk 13 Jun 2016 Microsoft has over $100 bln of cash, but will use mostly debt to buy LinkedIn for $26 bln. Heated credit markets make it cheaper for the software giant to pay interest – and perhaps lose its pristine AAA rating – than pay the tax penalty for using cash trapped overseas.
Symantec reboots itself with pricey M&A 13 Jun 2016 The cyber-security software maker that suffered for a decade after a bad deal is now buying rival Blue Coat for $4.7 bln. This acquisition of a private-equity plaything welcomes big business customers and a new CEO. Paying 21 times EBITDA, though, risks another possible disaster.
Microsoft’s CEO abandons prudence with LinkedIn 13 Jun 2016 Satya Nadella’s $26 bln deal could reinvigorate the software giant’s slipping grip on corporate computer systems and employee interactions. Paying a 50 pct premium for a flawed business raises several red flags, however. Microsoft’s M&A record doesn’t inspire confidence, either.
BP wisely chooses growth over control in Norway 10 Jun 2016 The UK oil major is putting its Norwegian business together with Det norske and its majority investor in a $1.3 billion share deal. BP will have a minority stake, but matching its mature assets with Det norske’s growing and efficient operations makes sense.
Virgin Australia buoyed by China’s M&A tourists 10 Jun 2016 Chinese conglomerate Nanshan is buying 20 pct of Australia’s No. 2 carrier weeks after HNA took a 13 pct stake. Both pledge to prop up its balance sheet. The benefits for the buyers are vague. That puts them in the same camp as the foreign airlines that already back Virgin.