Americas

Pearson buyout would be a study in low returns

23 Feb 2017

The UK education publisher's stock is down 22 percent this year, and its sprawling global business looks ripe for a breakup. Factor in the chance that the core U.S. textbook market is in terminal decline, however, and private equity would be brave to write the cheque.

Tesla investors shift into new cultish gear

22 Feb 2017

The $45 bln electric-car maker's latest results fail to help explain the huge recent jump in its share price. More calls for capital are likely, production targets are tough and the SolarCity deal remains a mystery. More than ever, owning Tesla means revering boss Elon Musk.

Latin America trumps populism – for now

22 Feb 2017

Ecuadoreans denied a first-round election victory to their leftist president's chosen successor. As in Brazil and Argentina, that opens the door to a traditional pro-business candidate. But growing U.S. demagoguery gives the region's politicians an excuse to ramp up nationalism.

U.S. immigration crackdown bets the farm

22 Feb 2017

The new president is moving hastily to deport more illegal workers as part of his America-centric policy. In the process of trying to protect industries like manufacturing, stricter rules will hit an agricultural sector already suffering from labor shortages and falling profit.

Unilever may be tempted by artificial sweeteners

22 Feb 2017

After escaping Kraft Heinz's $143 billion bid, the Marmite maker said it will focus on boosting shareholder return. The assumption is that it does so organically, or via small deals. But a big move, like buying Colgate, could get the share price up - if Unilever could stomach the execution risk.

The race is on to be the SABMiller of food

22 Feb 2017

AB InBev bought the UK beer giant in 2016, but only after SABMiller tried to copy its rival's M&A machine. Last week's aborted $143 bln bid for Unilever by Kraft Heinz – like AB InBev, part of 3G Capital's stable – may nudge General Mills, Mondelez et al into similar pursuits.

Aramco golden ticket has risks for Western banks

22 Feb 2017

JPMorgan and Morgan Stanley may have won the contest to be lead underwriters on the Saudi oil giant's $100 bln offering. The mandate could propel them to the top of the league tables, opening doors in the kingdom and elsewhere. But an IPO flop could be fatal for their franchises.

Air Products’ Chinese bid deserves to fly

22 Feb 2017

The U.S. giant has been stuck in a weird battle for control of Yingde Gases, which it wants to buy for up to $2.8 bln including debt. The target's board finally seems to be seeing sense. Bravo: the suitor is offering a fair EBITDA multiple and a fat premium for shareholders.

Warren Buffett’s elephant chase gains urgency

21 Feb 2017

The decision by Kraft Heinz to abandon Unilever leaves both companies with some soul-searching to do. Berkshire Hathaway, which would have backed the $143 bln takeover, is left to reconsider how to deploy $85 bln of cash, its biggest stockpile ever. Bolt-on deals only go so far.

Uber’s missteps add up to revenue disruption

21 Feb 2017

The car-hailing firm hired a former top U.S. government lawyer to probe claims of sexual harassment. That's potentially serious. It's also another business risk. Already on the back foot with urbanites, CEO Travis Kalanick may need to start asking more questions first.

CNN could find prime-time slot at CBS

21 Feb 2017

Time Warner shareholders just approved AT&T's $85 bln purchase of the HBO owner. But U.S. regulators may still require concessions, perhaps including a sale of CNN. Even with a $9 bln price tag, a deal could make strategic and financial sense for Les Moonves at CBS.

AIG digs out of lengthy Stowe snow-blindness

21 Feb 2017

The insurer is offloading the Vermont resort, built by its founder because he hated waiting in line. For Vail Resorts, the $50 mln deal nearly completes its American ski roll-up. Investors should welcome anything that helps focus management at AIG, which lost $3 bln last quarter.

Activist applies some Italian polish to Tiffany’s

21 Feb 2017

With a long slump threatening to tarnish its brand, the luxury jeweler is embracing new blood. Barry Rosenstein's Jana Partners has teamed up with former Bulgari boss Francesco Trapani to nab a stake and three board seats. They need to move quickly to restore the group's luster.

Post-truth data will come back to bite Uncle Sam

21 Feb 2017

Donald Trump's economic team may tweak trade figures to make deficits look bigger, helping his push for tariffs. Though politicians have always cherry-picked numbers, fiddling with actual statistics threatens confidence. It also raises expectations Trump will struggle to meet.

3G chews over next big move with side of nuggets

21 Feb 2017

Fresh from pulling Kraft Heinz's bid for Unilever, the Brazilian investor group's restaurant roll-up pounced on fried-chicken chain Popeyes. With this $1.8 bln appetizer, Burger King's bosses get to apply their cost crunching to fast food while settling on a big new target.

KKR gambles on mobile data with Telefonica towers

21 Feb 2017

The private equity group is paying up to 1.3 bln euros for 40 pct of the Spanish telco's infrastructure business Telxius. It's a similar valuation to the unit's failed IPO last year and KKR won't have control. But higher demand for mobile internet usage offers long-term upside.

Golden Globes flop could tarnish Chinese bidders

21 Feb 2017

Officials torpedoed Dalian Wanda's $1 bln bid for Golden Globes producer Dick Clark, a Hollywood website says. Reining in Wang Jianlin may be diplomatically astute and economically prudent, but if China's richest man can't get deals done, it's a bad sign for other Chinese buyers.

Hadas: Trump’s FX truthiness misses the big points

20 Feb 2017

The U.S. president’s complaint that cheap overseas currencies hurt U.S. jobs contains a little truth, but his proposed cure is far worse than the disease. The main problem in foreign exchange is excess volatility. Fixing that requires better global coordination – a distant dream.

Unilever exposes holes in UK industrial strategy

20 Feb 2017

A takeover of the Anglo-Dutch consumer giant would have tested the prime minister’s vow to defend sectors and workers from foreign buyers. Even though it’s now off, May lacks the tools to deliver on the pledge. Her party would need to ditch its scorn of French protectionism.

Kraft Heinz is a good fire drill for Unilever

20 Feb 2017

Even before the U.S. group dropped its bid, the Anglo-Dutch company wanted to cut costs by 1 billion euros a year. If Unilever can hit the top end of sales and margin targets, its valuation would rise closer to Kraft's offer. Investors are betting such efforts will be redoubled.