Dell’s gnarly $50 bln EMC idea smells of peak M&A 8 Oct 2015 The PC maker may offer to buy the data-storage firm. Borrowing $40 bln or so wouldn’t be easy. Spinning off part of EMC’s 81 pct stake in its $35 bln subsidiary VMware would add complexity, too, and make it tough for the numbers to work for everyone. It could be a deal too far.
Only beer goggles make AB InBev deal look right 8 Oct 2015 Cost savings in previous brewery mergers suggest the Budweiser maker is far from covering the 37 pct premium in its $100 bln offer for SABMiller, based on Breakingviews calculations. Sales growth and disposals might help. Sweetening the bid, however, is a tall order.
China web merger is latest sign of funding fatigue 8 Oct 2015 A mooted $15 bln tie-up between two discount shopping sites comes months after the country’s top taxi apps joined forces. Web giants like Alibaba and Tencent have poured billions into startups that connect local services to users. But subsidy wars are testing investors’ patience.
Li Ka-shing concession gives investors power boost 8 Oct 2015 The tycoon’s Cheung Kong Infrastructure unit has slightly sweetened its $12.4 bln offer for affiliate Power Assets. The move is designed to pre-empt a public showdown with minority shareholders. But it risks emboldening them to hold out for even more - and resist future deals.
Bud almost has the SAB keg tapped 7 Oct 2015 AB InBev’s $99 bln cash offer for SABMiller is robust. The alternative stock package is unusual, but looks cleverly designed to meet the tax needs of Altria and BevCo, SAB’s 41 percent shareholders. It also eases post-deal debt pressures. MegaBeer is almost here.
AirAsia buyout could fly with fancy 7 Oct 2015 Co-founder Tony Fernandes would need about $800 mln of additional financing to take the embattled budget carrier private. Though buyouts are rare in the cyclical industry, it could make sense for investors willing to bet on a Malaysian recovery and on oil prices staying low.
Scorched U.S. tech and pharma feel the M&A chill 6 Oct 2015 Two of the hottest sectors for deals this year have extended their run. Apple chip supplier Skyworks agreed to buy PMC-Sierra for $2 bln and AmerisourceBergen is purchasing PharMEDium for $2.6 bln. Investors in both acquirers jeered, building on a worrisome trend for mergers.
Suncor’s hostile oil sands bid is sign of divide 5 Oct 2015 The energy group is offering $3.3 bln in stock for JV partner Canadian Oil Sands. The 43 pct premium will be tempting for owners of the beleaguered bitumen miner, whose shares have tanked alongside oil prices. Sturdier players like Suncor are well placed for opportunistic deals.
Potash selloff shows flaws in K+S takeover defence 5 Oct 2015 Slumping demand for the fertiliser ingredient has prompted Canada’s Potash Corp to withdraw a 7.9 billion euro ($8.9 billion) offer for its German rival. For three months, K+S played hard to get even as prices fell. Shareholders may now regret its reluctance to negotiate.
Darty may squeeze more from French suitor 1 Oct 2015 The electricals retailer is mulling a merger with French rival Fnac. Darty would get 45 pct of the merged group, ease its strained balance sheet and enjoy some cost savings. Even though 14 pct shareholder Knight Vinke supports the plan, there’s room for improvement on price.
Record-slow U.S. bank deal offers cautionary tale 30 Sep 2015 The Fed took three years to OK the $16 bln M&T’s takeover of smaller Hudson City, having demanded fixes to the buyer’s back office. CEO Bob Wilmers now looks like he’s paying over the odds for a struggling rival. Others in the industry with problems won’t find M&A a quick fix.
M&A running out of road on Easy Street 30 Sep 2015 Since July, only four out of 10 U.S. buyers’ stocks have risen after a deal announcement. That’s a big drop from 80 pct in early 2014. Blaming volatility misses the point. Investors just aren’t convinced by increasingly bold and messy deals. The end of a merger boom may be nigh.
Henry Blodget makes most of Wall Street ban 29 Sep 2015 Selling most of Business Insider to Axel Springer for $343 mln is another step in the disgraced former dot-com analyst’s rehab. Blodget’s media outlet has made money and created jobs – despite the distorted market for talent that Wall Street created and Silicon Valley is aping.
Business Insider picks deep German pockets 29 Sep 2015 Axel Springer is buying the business and tech news website at a $442 mln valuation. Nine times sales implies a long run of fast growth. It evokes Dresdner’s acquisition of Wasserstein Perella, a deal from the days when Business Insider boss Henry Blodget worked on Wall Street.
Japan Tobacco gives Reynolds breath of fresh air 29 Sep 2015 The buyer is paying $5 bln for the overseas rights to the U.S. cigarette group’s American Spirit brand - a whopping 250 times earnings. It’ll allow Reynolds to exhale a cloud of debt as it focuses on U.S. sales. Its strategy is a handy guide for similarly challenged sectors.
Li Ka-shing’s power deal is at risk of a jolt 29 Sep 2015 The tycoon’s Cheung Kong Infrastructure unit wants to buy cash-rich affiliate Power Assets for $11.6 bln in stock. Investors have the motive and the means to push for better terms. But they need to believe the rewards of a sweetened offer outweigh the risks of Li walking away.
Alcoa split is canny move – not least for its CEO 28 Sep 2015 The $12 bln aluminum producer is cleaving sluggish smelting from healthier aerospace. Based on rival valuations, Alcoa shareholders can expect a modest uplift. Boss Klaus Kleinfeld, however, gets a new gig atop a more promising business, one he has been building by acquisition.
Hostile bid makes best TV in U.S. broadcast fight 28 Sep 2015 Nexstar wants to buy Media General for $4.1 bln, breaking up the latter’s agreed merger with Meredith. The new offer makes financial sense for Media General owners and would create a local TV player minus the baggage of magazines. The mystery is why Nexstar wasn’t first choice.
Vodafone and Liberty may yet converge 28 Sep 2015 Talks between the two telcos over a potential swap of European assets have come to nothing. Regulatory headwinds may be an issue, but the sticking point seems to have been price rather than strategic rationale. That means a deal – eventually – can’t be ruled out.
Bud-SAB tie-up hinges on a scramble for Africa 24 Sep 2015 Cost-cutting will help brewer AB InBev justify a $110 billion strike at SABMiller. But a convincing top-line growth story is required if existing equity investors are to roll into the new entity. There are several levers. Africa is the most important.