Alfa Laval’s $2 bln Finnish deal assumes a lot 13 Jul 2020 The Swedish industrial group’s cash offer for valve maker Neles raises its exposure to carbon-heavy markets. In the absence of as-yet-unquantified synergies, the return on investment looks paltry at less than 4%. Alfa investors who hailed the purchase are taking a lot on trust.
Volatile markets make case for stock deals 9 Jul 2020 Buyers like Simon Property and Cineworld who have used cash to lunge after strategic targets are dropping their deals like a bad habit. Uncertain asset prices, liquidity crunches and pre-Covid valuations are all to blame. Transactions using stock have a better chance of closing.
KKR’s Kravis pulls a Buffett with insurance deal 8 Jul 2020 The $26 bln buyout firm will buy Global Atlantic for its book value, currently $4.4 bln, multiplying its so-called permanent capital – an investing trick mastered by the Sage of Omaha. Wednesday offers a tale of two deals: Allstate’s similar-sized purchase looks less disciplined.
Tesla rivals’ solar deal brings few rays of light 7 Jul 2020 Blackstone-backed Vivint is selling to Sunrun for $1.5 bln. Price wars and the technology’s low take-up rate have sapped earnings and valuations. Merger cost-cuts will make the business more sustainable. But Tesla’s car heft and stellar valuation make it tough for competitors.
WPP boss gets best of both worlds with PR mash-up 7 Jul 2020 Finsbury and two other companies owned by the $10 bln advertising giant are uniting. The trio’s managers will hold nearly 50% of the new company. CEO Mark Read, who keeps control, benefits if they do well while a simpler structure lets him focus on chasing dwindling ad revenue.
Sina’s terrible governance comes home to roost 7 Jul 2020 Less than three years after the Chinese web outfit inexplicably handed control to boss Charles Chao, he wants to take it private. The $2.7 bln offer is at a 20% discount to Sina’s stake in microblog Weibo. Supervoting stock and a weak board put minority holders in a tight spot.
Uber’s Postmates deal will barely touch the sides 6 Jul 2020 Boss Dara Khosrowshahi is removing a food delivery competitor at a cheap price. More than half of the deal’s $2.7 bln value will be recouped through cost savings. It’s also an amuse-bouche sized test of how regulators will respond to the ride-hailing firm’s future acquisitions.
Warren Buffett makes natural gas his new Dominion 6 Jul 2020 The Sage of Omaha’s energy unit is paying $4 bln plus debt for most of the U.S. utility firm’s pipelines for the fossil fuel. Natural gas prices have slumped thanks to virus-induced lockdowns. But the fuel’s future is more stable than oil’s, and Buffett has drilled a good price.
Corona Capital: Disney/“Hamilton”, U.S. housing 6 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: “Hamilton” reinvigorates Walt Disney’s digital-download challenge, and America’s stay-at-home rules may mean there’s pent-up demand for real estate and home improvement.
OneWeb’s relaunch shortens distance to profit 6 Jul 2020 The satellite startup is back in the internet space race with $1 bln from India’s Bharti - the world’s third-largest telco - and the UK government. The deal will shore up future revenue, reducing risks for investors going head-to-head with Jeff Bezos and Elon Musk in orbit.
Competing interests blur M&A regulation 1 Jul 2020 The U.S. government wants to curb a big jump in Chapter 11 filings in May. Dealmaking would help on that front. But agencies are also issuing antitrust guidelines that may make tie-ups harder. Jobs are at stake either way. It’s a trade-off between bailouts and consumer harm.
Italian $4 bln bank deal may suit government most 1 Jul 2020 Banca Monte dei Paschi di Siena could merge with rival BPM, Reuters reported, helping the state shed its 68% stake. A likely selldown would weigh on the enlarged group’s shares, as would MPS’ high costs and bad debt. The problem for BPM is that it's running out of alternatives.
Casino deal epitomizes the house edge 30 Jun 2020 Houston billionaire Tilman Fertitta is using his blank-check company to buy his online-gaming business from his restaurants-to-river cruises outfit. The deal’s cheap compared to virus-inflated rival DraftKings’ valuation. But Fertitta’s inside knowledge gives him a winning hand.
Uber tries for bigger meal ticket with small fry 30 Jun 2020 Boss Dara Khosrowshahi may strike a deal with Postmates after failing to bag Grubhub. The food-delivery service is tiny compared to rivals with outsized valuations, so the mooted $2.6 bln price is easier to stomach. Yet benefits are as questionable as risk, and Uber could wait.
European bankers ahead in game with no winner 30 Jun 2020 Deals targeting companies in the region rose 39% to $415 bln in the first half, defying a massive global slump. Anomalies helped. As Brussels favours European corporate champions, the relative trend will continue. That helps UBS and Deutsche even if companies are suffering.
Agnellis can win twice from EU auto merger probe 29 Jun 2020 Brussels is worried the union of Peugeot and Fiat, controlled by the Italian clan, will dominate van sales. High margins make it hard to justify outsized market share. Selling models to a smaller rival like Agnelli-backed CNH would boost competition and let the merger pass.
Fawning over Kardashians accentuates Coty’s flaws 29 Jun 2020 The cosmetics group will buy 20% of Kim Kardashian West’s make-up line for $200 mln, the FT said. New boss Peter Harf is taking a smaller stake than Coty acquired last year in half-sister Kylie Jenner’s unit. But $8 bln in debt and collapsed sales look like more urgent concerns.
Deal for Mark Wahlberg gym needs post-Covid energy 25 Jun 2020 A SPAC is buying the F45 gym group backed by the actor-musician for an enterprise value of $845 million. If projections pan out, that's a bargain next to Peloton and Planet Fitness. Heavy lifting is needed, though, to rebound from the coronavirus and keep new franchisees coming.
Saudi $45 bln bank M&A is haunted by past failure 25 Jun 2020 The kingdom’s biggest lender NCB wants an all-share combo with Samba, having dropped its pursuit of Riyad Bank last year. Local retail investors may shrug at the prospect of creating a banking champion. That means the acquirer will have to pay towards the top of a mooted range.
VW’s Europcar takeover would be a rough round trip 24 Jun 2020 The German carmaker is considering buying the $500 mln French car-rental firm, which it sold in 2006. Beleaguered boss Herbert Diess could use its airport and city locations to launch ride-sharing services. Plummeting rentals and high debt will make bumpy economic returns ahead.