HNA’s $6 bln Ingram bid has weird Chinese logic 18 Feb 2016 There’s no clear rationale for the conglomerate to buy a U.S. electronics distributor and leave its management and business untouched. But like other recent outbound Chinese deals, the acquisition gives HNA diversification, political capital, and a hedge against the sliding yuan.
Australian infrastructure party is getting crowded 18 Feb 2016 The $6 bln-plus bid battle for port and rail operator Asciano has become heated, drawing in backers from Canada, China and Qatar. No wonder: borrowing is cheap and demand for infrastructure investments outstrips supply. This bodes well for future Australian state sell-offs.
M&A with Chinese characteristics comes up short 17 Feb 2016 Fosun’s takeover of Phoenix unraveled. Fairchild snubbed a $2.4 bln offer from China Resources. Terex investors are shrugging at Zoomlion. From possible CFIUS blocks to bosses going missing, Chinese buyers bring added risks only partly papered over by higher premiums.
China’s new M&A players haunted by past failures 17 Feb 2016 Most of the country’s large foreign takeovers have fared poorly. Bets on oil, mining and finance were victims of bad timing. More recent deals like ChemChina’s $44 bln takeover of Syngenta look less cyclical. But integration, management and debt still pose big challenges.
Apollo’s $7 bln ADT deal comes with extra security 16 Feb 2016 It’s an alarming buyout given the state of credit markets. The LBO firm and co-investors, though, are kicking in a big slug of equity to keep debt at a relatively safe level. Merging ADT with another Apollo-owned company should add cost savings and help lock up a decent return.
Vodafone and Liberty get square peg in round hole 16 Feb 2016 A Dutch venture between the UK mobile giant and John Malone’s cable group looks almost too neat. Valuations match perfectly, management will be shared. Vodafone probably sacrificed a bit of value, but with 3.5 bln euros in synergies, it works for both.
Baidu video buyout comes with multiple warnings 15 Feb 2016 The CEO of China’s top search engine is involved in a $2.8 bln bid for the company’s streaming site. Offloading the loss-making unit will boost margins, but selling to the boss raises conflicts of interest. Without more detail, investors cannot judge whether the offer is fair.
Pandora faces lonely search for a partner 11 Feb 2016 The internet-radio service is reportedly up for sale. Q4 results show revenue growth slowing, however, suggesting potential matches are few and far between. Add stiff competition from Apple and Spotify and limited access to music, and the company seems destined to remain alone.
Keep an eye on the banker stage of M&A cycle 11 Feb 2016 France’s Natixis is buying control of Peter J. Solomon, a specialty corporate consigliere. The U.S. boutique wants to roll up fellow advisory shops. Veteran dealmakers can recall the fates of Robertson Stephens and Wasserstein Perella, and wonder if history will repeat itself.
Overdue Mylan deal is not the one investors wanted 11 Feb 2016 Three months after rival Perrigo refused its $26 bln offer, the drugmaker has agreed to buy Sweden’s Meda AB. Though the $7.2 bln transaction makes strategic sense, the 92 pct premium is hard to justify. Mylan might have been better served by trying to sell, rather than buy.
Adtech deal arms China’s web groups against giants 11 Feb 2016 A consortium including search specialist Qihoo and gaming firm Kunlun are bidding $1.2 bln for Norway’s Opera Software. Despite a fat premium, the offer is not overly pricey. Plus, Opera could help the buyers move into lucrative niches not yet taken by Baidu, Alibaba or Tencent.
Anheuser rolls Asahi on middling beer brands 10 Feb 2016 Though the $2.9 bln price tag is a bit lower than expected, the Japanese brewer’s acquisition of Peroni, Grolsch and Meantime from Mega-Beer clocks in at some 25 times probable EBIT. It’s only justifiable under the demographic logic of the buyer’s shrinking home country.
German real estate M&A fiasco leaves no winners 10 Feb 2016 The failure of Vonovia’s hostile bid for Deutsche Wohnen spares investors a long legal battle. The bidder comes away empty handed with at least 42 mln euros of costs. Wohnen’s defence involved a pricey acquisition. It’s time for German real estate to become boring again.
Financial prospects flicker on $11 bln power deal 9 Feb 2016 Canadian utility Fortis would need some $230 million a year in cost savings or other gains to justify the $1.7 bln premium it’s paying for U.S.-based ITC. The strategic sense in the acquisition doesn’t include obvious synergies. That makes a return for Fortis investors look dim.
Wobbly U.S. pipeline deal could do with less cash 8 Feb 2016 Energy Transfer’s planned takeover of Williams has shrunk to a third of its original $33 bln value. The buyer can’t obviously wriggle out of a bid made amid plunging oil prices. With big customer Chesapeake ailing, too, revisiting the mix of cash and stock would help both sides.
China’s record waste deal is far from rubbish 5 Feb 2016 State-backed Beijing Enterprises is buying Germany’s Energy from Waste for $1.6 bln. Unlike some of China’s splashier foreign deals, this looks decently priced and makes obvious strategic sense. China badly needs more clean-technology expertise. Expect more trashy buys.
Elliott’s HK bank fight smacks of desperation 5 Feb 2016 The activist fund is pushing for a sale of Bank of East Asia. Other big shareholders are unlikely to join in. It’s also a bad time to seek a buyer for a group with such a large exposure to China. Elliott’s latest salvo suggests it’s getting nervous about its $500 mln bet.
Sharp surprise sends hopeful signal about Japan 4 Feb 2016 The ailing electronics firm is leaning towards a deal with Taiwan’s Foxconn over a domestic bailout. Sharp’s current shareholders may yet suffer. But at least the board seems to be taking its duties to them seriously - just as should happen in the new investor-friendly Japan.
Syngenta up against element of regulatory surprise 3 Feb 2016 The Swiss seed maker says its $43 bln sale to ChemChina shouldn’t raise U.S. national security fears, despite hot-button facets like chemicals, food and China. Yet Philips’ blocked lighting-unit deal shows Uncle Sam can veto without explanation. That’s reason enough to be wary.
Lowe’s makes an offer even Canada can’t refuse 3 Feb 2016 The U.S. home-retailing chain has won over Rona with a 104 pct premium valuing its northern counterpart at C$3.2 bln. Protectionism helped thwart a bid from Lowe’s in 2012. A strong dollar made a knockout bid easier now. And it turns out the color of money suits any flag.