Clock is ticking on Veolia’s efforts at renewal 6 Dec 2011 The French utility has been hit hard by the economy and its own hubris. Chairman Antoine Frerot is trying to regain the initiative by selling 5 bln euros of assets and widening cost cuts. That’s sensible, but he needs results fast. Investors’ patience must be wearing thin.
Oracle needs to read Cisco cautionary tale 5 Dec 2011 Empires built on acquisitions can run into problems as they sprawl. That’s doubly so in tech, where obsolescence is a risk. Oracle has used database profits to buy new businesses. So far, so good - but Cisco’s record suggests success will be hard to sustain.
SAP pays $3.4bln to ride rise of "cloud" computing 5 Dec 2011 The German software giant is swallowing a fast-growing yet barely profitable upstart, Successfactors. The price is a lofty 8 times sales but SAP needed a deal. It risked missing out on a huge shift by corporate clients to cloud-based technology applications.
New England power merger deserves final nixing 5 Dec 2011 A report on Northeast Utilities’ handling of a snowstorm from a former U.S. disaster official makes it clear: the company failed in the duties that come with its monopoly. Regulators have all the evidence they need to power down the utility’s $4.7 bln takeover of rival NSTAR.
Piecemeal solution would suit bust Spanish caja 2 Dec 2011 Sabadell was the only bank that made an offer for CAM, after other bidders backed out. Now Spain’s central bank must decide whether it sells the caja with all sorts of expensive guarantees. Alternatively, it could sell the good parts. This option may be the least painful.
Thomson finally completes takeover of Reuters 2 Dec 2011 Tom Glocer’s bankerly CEO skills no longer suit the publishing giant. He restructured Reuters and deftly engineered its well-timed sale. But the company needs to grow – and the controlling Thomson family is weary of waiting. How it does so, though, still seems far from clear.
AT&T boss should pay price if T-Mobile deal fails 28 Nov 2011 The telecom giant bet big it could get the $39 bln acquisition past regulators. Now, AT&T is acknowledging how tough the fight is. It’s looking more likely shareholders will be on the hook for $6 bln. If so, CEO Randall Stephenson should lose some comp - and his chairman’s seat.
M&A gives no reprieve for China’s global lawyers 25 Nov 2011 Mallesons of Australia plans to merge with King & Wood, a Chinese rival. It sounds harmonious, but won’t do much to change the fact that foreign counsels get short shrift in the People’s Republic. When the WTO let China in, it largely forgot lawyers. Their prospects look bleak.
AT&T’s $4 bln admission: DT deal may be a turkey 24 Nov 2011 Happy Thanksgiving from the U.S. telco. It has acknowledged its $39 bln T-Mobile takeover may flop, taking a charge worth 10 pct of the deal to cover a record break fee. Failure would also deprive AT&T of synergies, Deutsche Tel of an exit and investment banks of a rare payday.
Swiss private bank stress forcing consolidation 24 Nov 2011 The strong Swiss franc, tax deals and market turmoil are squeezing the industry. That’s prompted Dutch lender Rabobank to weigh bids for its 46 pct stake in Sarasin. Any buyer risks culture clash and customer loss. But the benefits of size may outweigh those of independence.
KKR’s $7.2 bln Samson deal looks more BO than LBO 23 Nov 2011 The private equity firm and its partners are putting more than 50 pct equity down to buy the Oklahoma energy firm. That surely reflects more than Henry Kravis’ desire to bet on a hometown play. Banks are understandably nervous about lending against the promise of wildcat riches.
Investors too skeptical on Gilead’s $11 bln bet 21 Nov 2011 Helped by acquisitions, the biotech made it big with drugs for HIV. Now, by buying Pharmasset, it’s trying the same trick with hepatitis C. Sure, Gilead is paying a stonking 89 pct premium. But wiping some $3 bln off the buyer’s market value looks like an over-reaction.
Exclusive: Ditching CEO won’t save US utility deal 18 Nov 2011 Northeast Utilities parted ways with the head of its biggest division, CL&P, after the utility’s bungled storm response. Investors think that makes the pending $4.7 bln takeover of NSTAR more likely. Not so fast: Connecticut plans to reopen the merger review by hook or by crook.
Northern Rock sale barely dents UK bailout tab 17 Nov 2011 Selling the good part of the collapsed UK lender to Virgin Money raises up to 1 billion pounds for the government. But the proceeds are small beer compared to the 21 billion pounds the state has lent to Rock’s bad bank. Fully reimbursing taxpayers will take well over a decade.
Gulf airlines can afford a little arrogance 16 Nov 2011 Qatar Airways’ CEO gave Airbus a lecture on strategy before placing a $6 bln order, just after rival Emirates did an $18 bln deal with Boeing. It may sound like hubris. But it’s not hard to see how investment could become market share in a recovering world.
Buffett’s IBM has rare mix of growth and value 15 Nov 2011 Berkshire Hathaway’s investment success is built on common sense stock picks such as the tech-turned-consultancy firm. But only four other global large-cap stocks match Big Blue’s downhome growth-and-value qualities of a sort so admired by the Sage of Omaha.
IBM bet doesn’t mean Buffett’s tech spots changed 14 Nov 2011 The Oracle famously avoids tech stocks but bought a $10.7 bln stake in Big Blue. Once at the cutting edge of supercomputers, IBM just pulled out of a next-generation project. It’s now a predictable, well-branded consulting firm. IBM’s investment profile evolved, not Buffett’s.
Music gods again divert EMI’s destiny 11 Nov 2011 With both EMI and Warner under new owners, it seemed the stars might finally uncross for their long-awaited union. But Sony and Universal brought their own karma and cash to the EMI auction, and Warner is again alone at the altar. Further twists of fate are in regulators’ hands.
Sinopec’s M&A strategy gets a little smarter 11 Nov 2011 The Chinese oil major’s $5.2 billion investment in Brazilian oil resembles a deal it did last year – but at 20 pct less per barrel. Non-financial considerations explain some of the difference. But state-owned Sinopec appears to be learning more tricks of the M&A trade.
Olympus mystery may hinge on M&A accounting 9 Nov 2011 The company hasn’t said how it used takeovers to hide decades of investment losses. Japanese goodwill accounting might provide a way, by allowing companies to pay big takeover premiums and advisory fees and write them down over time. It’s time Japan closed this loophole.