A Ford-VW tie-up would solve a ton of problems 22 May 2020 The two rivals’ souped-up electric and autonomous collaboration won’t solve their respective geographic weaknesses. A merger would. It’d also create value and give Ford’s underperforming boss a graceful exit. The biggest sticking point is the firms’ convoluted ownership.
Morgan Stanley gets closer to real Reliance prize 22 May 2020 Deals are flowing fast as Mukesh Ambani rejigs his empire. The U.S. bank has helped raise $10 bln for the tech unit from Facebook, KKR and others. It wasn’t on a bigger deal inked with Aramco but that’s less important, especially with the $70 bln Jio unit’s IPO on the horizon.
Uber-Grubhub’s big obstacle is delivery not price 18 May 2020 Some to-and-fro over value is normal in a potential merger. But for two money-losing companies with volatile stocks, financial tweaks are a second-order issue. The more critical question about combining their meal-delivery operations is whether antitrust watchdogs would block it.
Corona Capital: Travel companies, Oil 18 May 2020 Concise views on the pandemic’s corporate and financial fallout: Travel companies have sunnier days; oil traders have triumph of hope over experience.
BT’s misery puts new gloss on old selloff idea 15 May 2020 The UK phone giant is considering offloading part of its $24 bln Openreach network unit, the FT says. CEO Philip Jansen and his predecessors resisted a split. But he urgently needs cash to boost fibre broadband, and a sale could lift BT’s shares from this week’s decade lows.
Uber-Grubhub may get stomachache from deal fuss 14 May 2020 A tie-up would create the top meal-delivery firm in major markets like New York, Boston and Chicago. Uber’s beefed up lobbying efforts might help federal approval, but even then state antitrust watchdogs may be concerned. It’s a tough taste test for the $57 bln ride-hailing app.
The Agnellis move from hunting to hunkering down 13 May 2020 With a planned $9 bln cash windfall from selling PartnerRe and fat dividends from merging Fiat with Peugeot, the Italian billionaire family was set just months ago for a global, diversification shopping spree. Exor is a case study in how quickly the pandemic shifts fortunes.
Uber is Grubhub CEO’s answer 12 May 2020 Matt Maloney bemoaned excessive competition among food-delivery startups. The lockdown has helped, but it's still cut-throat. Now the $55 bln ride-hailing giant may buy Grubhub. That’s one way to solve Maloney's problem, provided price and antitrust thinking go his way.
PNC picks Covid moment to cash in BlackRock chips 12 May 2020 The regional bank is selling its 22% stake in the asset manager, worth $17 bln. PNC has had a great ride, but new rules could have become a headache for both companies. The timing means boss Bill Demchak will have a big war chest to go looking for bargain acquisitions.
Coty applies KKR’s cash to cover deal scars 11 May 2020 The private-equity firm will pay $3 bln for a majority stake in brands Coty bought from P&G for $12.5 bln. A direct investment of $1 bln in Coty will further tone down its crushing debt load. It's a loss of face – but not quite of control – for parent JAB.
Saudi’s $69 bln asset rejig collides with reality 11 May 2020 Giant Aramco is trying to cut the price of last year’s deal to buy 70% of chemicals firm SABIC. A discount would give Riyadh’s Public Investment Fund less cash to pivot Saudi’s economy away from oil. Budget concerns make helping the kingdom’s corporate cash cow more important.
Corona Capital: SPAC reversal, Italy, Toilet paper 8 May 2020 Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.
M&A bankers should consider going back to college 8 May 2020 Not for the frat parties. Even before the pandemic, demographics were working against the economics of higher education. Crunched finances make it worse, and online learning has exposed absurd tuition costs. Colleges seeking size, scale and stability will need strategic advice.
Luckin pileup crashes into China’s car lot 8 May 2020 The coffee chain scandal hit shares in Car Inc, a rental firm chaired by Luckin founder Lu Zhengyao. Lu also leads Ucar, whose banks could dump a slug of Car Inc pledged as collateral, triggering a change of control and dragging in Warburg Pincus. It’s a lesson in key-man risk.
Viewsroom: Mega-mega mergers 7 May 2020 The Great Lockdown will inevitably encourage governments to foster the creation of ever-larger “national champions” through corporate consolidation. Rob Cox, Edward Chancellor and Lauren Silva Laughlin discuss possible combos – and why this would be a bad outcome for capitalism.
Thyssenkrupp lift deal becomes $18 bln albatross 7 May 2020 Advent and Cinven paid up for the German group’s elevator unit because it looked virus-proof. Sadly for the buyout barons, a possible 10% revenue drop this year means it may be anything but. The duo could be stuck with a low-return asset, a level below private equity’s top floor.
UK telecom merger harks back to pre-virus era 7 May 2020 Liberty’s Virgin Media and Telefonica’s O2 are creating a $39 bln mobile and cable giant. For a deal negotiated under lockdown, there’s little evidence of Covid-19. Valuations are robust and cost savings reasonable. A big dollop of extra debt allows both partners to extract cash.
Biotech M&A deal looks too rich for its blood 5 May 2020 Alexion agreed to pay $1.4 bln for smaller rival Portola and its potentially promising drug to reverse anticoagulants. The target has been on a downward slide for years – but is still bagging a 132% premium. That’s baking in success, but it’s more likely Alexion is overpaying.
Pandemic strengthens Intesa’s hand in M&A battle 5 May 2020 The Covid-19 crisis is clouding the $27 bln bank’s growth prospects. CEO Carlo Messina may struggle to pay dividends he promised in a hostile bid for peer UBI. Still, the worse outlook makes it harder for the target’s shareholders to reject the scale and savings from a merger.
Cox: Brace for America’s version of Saudi Aramco 5 May 2020 And that’s just a start. After the pandemic, governments will foster the creation of national champions. Bigger, supposedly safer and more diversified will be in. Conglomerates may even be fashionable again. In the hardest-hit sectors, like the oil patch, anything can happen.