U.S. bank bosses get greedy in latest merger 13 Jul 2015 The Fed has approved BB&T’s purchase of Susquehanna, one of the industry’s biggest transactions in years. Other lenders may be relieved to see the deal pipeline flow again. The buyer’s top brass, meanwhile, will share an undeserved $2.5 mln bonus, a blot on otherwise good news.
Wreckage of failed German lender HRE offers value 10 Jul 2015 In the midst of the Greek crisis, Germany’s government is pursuing a 1.5 bln euro IPO of Deutsche Pfandbriefbank, a remnant of Hypo Real Estate, which collapsed in 2009. While still hobbled by the past, the lender is recovering. A knockdown price takes legacy issues into account.
Coty’s $12.5 bln P&G deal slaps on too much makeup 9 Jul 2015 The fragrance giant is touting $550 mln of cost cuts from buying its larger rival’s beauty business. But that overstates the financial benefits of a tie-up that will take time and money to consummate. Coty’s once over-enthusiastic investors are at least seeing through the gloss.
Agnellis jump through hoops to woo PartnerRe 7 Jul 2015 Family scion John Elkann is offering his quarry’s preferred shareholders a higher dividend and a pledge to restrict payouts to his own Exor. That should curb fears of Fiat or other group holdings hurting reinsurer PartnerRe’s credit – if investors take Elkann’s word as his bond.
Governance complicates $16 bln German media merger 7 Jul 2015 Publisher Axel Springer is in early merger talks with larger broadcaster ProSiebenSat.1. Antitrust hurdles are lower than when they last tried to combine, while synergies could be hefty. But a deal will be a challenge as long as the Springer family insists on keeping control.
Latest pharma roll-up leaves lots of room to grow 7 Jul 2015 Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.
Asia’s M&A boom leaves old guard in charge 7 Jul 2015 Regional deals could be worth $1 trln this year. But the bonanza offers less than investors might hope. Backing from states and tycoons makes many companies bid-proof. That means fewer premium bids, less pressure on firms to shape up, and more stitch-ups of minority shareholders.
Aetna’s bitter Humana pill is good long-term care 3 Jul 2015 The two U.S. healthcare insurers struck a $37 bln deal ahead of rivals in a race to consolidate an industry rapidly reshaping under Obamacare. Cost savings will fall short of the premium Aetna is offering. It may be a price worth paying to be first in line with trustbusters.
Potash Corp may have to go too far to get K+S 3 Jul 2015 The Canadian fertiliser giant is willing to bid $10.5 bln for its German peer. It will need to improve its offer and give credible job guarantees to win over the target. But these concessions could become contradictory. A higher price implies Potash will need bigger cost cuts.
Brookfield can sail off with Asciano 2 Jul 2015 The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.
Iberdrola’s American dream gets harder to realise 2 Jul 2015 The Spanish utility’s $3 bln takeover of listed U.S. peer UIL has been dissed by the Connecticut regulator. Iberdrola can probably offer concessions to get the deal done. But the costs of doing so risk making its attempt to crack the fragmented American market less attractive.
Healthcare M&A pumped after Obamacare booster shot 2 Jul 2015 The U.S. top court decision upholding medical-coverage subsidies signals the official start of a race to consolidate. Centene and Health Net’s $6.3 bln deal gives the insurers an early lead. Big rivals like Cigna may catch up as the industry accepts that reform is here to stay.
GE could yet pull cooking appliance deal from fire 1 Jul 2015 U.S. trustbusters sued to block Electrolux’s $3.3 bln purchase of the conglomerate’s oven business. The firms may be able to pull an American Air-US Airways and sell assets to save the deal, but market definition issues loom. Either way, Uncle Sam knows how to turn up the heat.
ACE aims to defy history with $28 bln Chubb deal 1 Jul 2015 The Swiss insurer is buying its upscale U.S. rival. Cost and tax savings don’t cover the premium, implying ACE believes in promised revenue gains, also touted in the Willis-Towers Watson merger this week. The failed 1999 marriage of Provident and Unum, though, provides a warning.
Breakups, activists presage more industrial M&A 30 Jun 2015 Emerson said it plans to hive off its struggling network power business, a possible prelude to more spinoffs at the $37 bln conglomerate. And Nelson Peltz took a stake in $12 bln rival Pentair, saying he wants management to do deals. It’s more fuel for the mergers fire.
Winners’ bets get bolder in the biotech casino 30 Jun 2015 Celgene is paying a 100 pct premium for a 10 pct slice of two-and-a-half year-old Juno Therapeutics. That sounds bonkers, even for a fast-moving technology like immune cell modification. The sector is on a streak, but the risk of crapping out in drug development remains high.
Willis-Towers Watson insure against market turmoil 30 Jun 2015 The insurance broker and the risk consultant plan to merge. There’s positive logic: combining Towers’ knowhow and Willis’ client relationships could drive revenue. But $125 mln of cost synergies would also help the group weather an insurance sector wrestling with low rates.
KKR pioneers dubious sort of private equity deal 29 Jun 2015 The firm that helped blaze the trail on LBOs four decades ago has become one of the first to settle with the SEC over expenses charged to investors in its funds. KKR will have company, however. Individual sums may be small but, like the fees themselves, they’ll start to add up.
Potash Corp’s German foray reflects cartel woes 26 Jun 2015 The Canadian group that controls a fifth of global potash wants to buy K+S for over 7 bln euros. Success would give Potash Corp its German rival’s new Canadian mine and more pricing power. With a Russian cartel in flux and BHP also a threat, the move looks defensive.
Endesa LBO merchants may fall between two stools 26 Jun 2015 Private equity funds eyeing Spanish energy utility Endesa might need to go big to get anywhere at all. There’s reported interest in buying a chunky stake from Italy’s Enel. A takeover costing 29 bln euros with debt would make more sense. But that could prove too gutsy.