Nokia phone demise a warning for all tech giants 18 May 2016 Microsoft finally ditched the basic handset business in a deal that will see the devices reborn under the control of former Nokia bosses and Foxconn. The $350 mln sale price for the former crown jewel of a $300 bln enterprise is a testament to how quickly tech empires can vanish.
China’s $5 bln robot bid does not compute 18 May 2016 The 36 pct premium Midea may offer for German robot maker Kuka is frothy. There are no cost synergies, the suitor doesn’t seek control, and governance could be messy. Yet unless Kuka can find a white knight, minority shareholders have every reason to take the Chinese cash.
Labour costs drive China’s $5 bln march for robots 18 May 2016 Home appliance maker Midea is eyeing a takeover of German robot maker Kuka. Machines can replace domestic migrant workers as wages soar, and help push China up the manufacturing value chain. Government subsidies may aid the otherwise thin financial logic for the buyer.
Pandora investor hits right note with sale push 17 May 2016 Activist Keith Meister’s firm urges the online music service to find buyers after becoming its largest shareholder. A costly purchase, CEO change and lack of song rights suggest the company’s fading. Rivals Spotify and Sirius XM are possible partners. The board should be all ears.
Indian banks require capital before M&A 17 May 2016 The government is hinting at plans to merge some of the 27 state banks. Having fewer, stronger lenders makes sense but consolidation is not a substitute for repairing balance sheets. Deal-making now would disrupt the demanding turnaround that is already underway.
Pfizer’s $5.2 bln Anacor bid dodges bigger issue 16 May 2016 The drug giant may have bagged a good deal for the maker of eczema and toenail fungus remedies – assuming Anacor gets all needed approvals and sales soar. Bolt-on acquisitions can be helpful, but the important question for $200 bln Pfizer remains: will boss Ian Read break it up?
Terex turns controversial M&A fight into group hug 16 May 2016 The crane maker scrapped its merger with Finland’s Konecranes after new U.S. tax rules killed the deal’s logic. Konecranes is now just buying the ports business, the unit that raised security fears about a rival bid from China’s Zoomlion. It’s now free to buy the rest of Terex.
Gannett’s higher bid lays waste to Tribune defense 16 May 2016 The owner of USA Today has upped to $490 mln its offer for the L.A. Times publisher. It’s a 99 pct premium and a better multiple than virtually all but the most outlandish recent newspaper deals have commanded. Stalling Tribune Chair Michael Ferro has little choice but to engage.
Bayer would risk choking on Monsanto 12 May 2016 The $94 bln German chemical giant may be mulling a bid for the U.S. seed maker. Monsanto, worth $39 bln, would need convincing. A deal pitched at a 30 pct premium is financially feasible, but Bayer would need to raise a lot of cash – and deal with clashing cultures.
Nissan can help drive Mitsubishi Motors’ recovery 12 May 2016 The Japanese carmaker is paying its smaller peer $2.2 bln for a 34 pct stake. That sounds like a smart investment. Scandal-hit Mitsubishi is one of the weakest players in Japan’s overly fragmented auto industry. Like Renault, it could benefit from pooling resources with Nissan.
Brussels O2 veto cements BT’s home advantage 11 May 2016 The EU’s antitrust tsar has rejected CK Hutchison’s 10.3 billion pound takeover of O2, because it says it would raise mobile prices. That leaves several UK players figuring out next steps. In an industry moving towards packages of mobile, landline, broadband and TV, the winner is the beefed-up BT.
Ultimate Fighting punches up value of live sports 11 May 2016 The U.S. promotion firm is reportedly seeking up to $4 bln for its mixed martial arts contests, with China’s Dalian Wanda viewed as a likely buyer. That seems high for a relative upstart in the world of pro athletics. But huge audiences for real-time events may justify the price.
Staples-Office Depot flop leaves behind paper cuts 11 May 2016 The office supply chains have shredded a $6.3 bln merger after a judge called a halt amid worries about the impact on big customers. Squelched tie-ups like Sysco’s bid for US Foods portended the result. It’s a blow to the credibility of both sides.
Altice’s wily Cablevision math adds up to trouble 10 May 2016 Patrick Drahi’s telecom group told investors it can cut $900 mln in costs to justify the $18 bln U.S. cable acquisition. To appease New York officials worried about service, Altice is using a shorter timeframe to tout a $450 mln sum. Both constituencies will end up disappointed.
China could pick up more bargains in commodities 10 May 2016 The People’s Republic is warming up to the sector as global miners race to cut debt. The latest deal sees China Molybdenum snap up Freeport’s Congo copper project for $2.7 bln. At the current pace, China’s hunger for overseas mining assets could return close to peak levels.
Digesting Krispy Kreme may require more sweetener 9 May 2016 JAB has baked a 25 pct premium into its $1.4 bln offer to take the donut maker private. The billionaire-backed owner of coffee sellers Keurig and Peet’s should be able to boost sales and margins. But Krispy Kreme may prove too appetizing for others to pass up without a fight.
China’s backdoor listings problem is self-made 9 May 2016 The securities regulator is studying the impact of overseas Chinese companies relisting at home via shell companies. Yet it is a self-inflicted problem. Dizzying stock market valuations and delays in reforming the IPO process are to blame. The regulator has had a hand in both.
Air Products and Evonik neutralize deal imbalance 6 May 2016 The U.S. industrial-gas producer is selling specialty chemicals to its German peer for $3.8 bln. A lofty valuation of 16 times last year’s EBITDA helps Air Products cover a tax hit triggered by the sale. To justify the price, Evonik is rustling up meaningful savings of its own.
Farcical oil deal prompts George Costanza defense 5 May 2016 Like the character in sitcom “Seinfeld,” Energy Transfer hopes to shake up a sour relationship: the $21 bln takeover of pipeline rival Williams. ETE aims to pay less cash, seeming to force the issue by making itself as unattractive as possible. The stakes are no laughing matter.
Pfizer mulls actually having an M&A strategy 5 May 2016 The $205 bln drug giant’s last two huge acquisition attempts failed. Pfizer could yet try another merger to cut its tax rate, it could enter a potentially heated auction for $10 bln biotech Medivation, or it could split up. Dealmaking success depends on having clearer goals.