Americas

Nelson Peltz picks good time to scrub P&G

15 Feb 2017

The $230 bln Tide-to-Crest conglomerate was improving steadily even before the pushy investor came calling. While Gillette faces bigger threats, Peltz's proposals for P&G are a mystery for now. Either way, consumer stocks are well positioned for a tougher economic environment.

Yahoo paying small price for big hacks

15 Feb 2017

The $40 bln internet company may be on the verge of discounting its core-business sale to Verizon by $250-350 mln, less than a 10 pct cut in the original price. For such poorly handled data breaches involving over 1 bln users, some 25 cents each seems a light penalty.

Turning table on activist runs $10 bln risk at CSX

15 Feb 2017

The railroad quickly acceded to Mantle Ridge's idea to install Hunter Harrison as CEO. Now it's balking at the fund's outsized demands for pay and board seats. Drawing the line on comp and giving shareholders a say is laudable, but a long fight threatens CSX's big market gains.

U.S. consumers offer better prop for stock market

15 Feb 2017

American retail sales jumped in January while consumer prices rose at their fastest rate in four years, reflecting solid growth. Optimism about Donald Trump’s economic plans has lifted markets. Sound economic fundamentals are more reliable than the dysfunctional White House.

Struggling U.S. retailers take aim at border tax plan

15 Feb 2017

CEOs from the likes of Target and Gap are meeting with President Trump to voice concern over proposed border taxes. With store closings and job cuts accelerating, a levy that raises prices for consumers would add to the woes of an industry that's America's largest private-sector employer.

Peugeot-Opel deal steals a march on Marchionne

15 Feb 2017

Fiat Chrysler's boss has for years advocated consolidation in the car industry. A tie-up between Peugeot and Opel may prove his point but hurt his company. Finding a European partner becomes harder and Sergio Marchionne's hand is weakened in any future talks with GM in America.

GM can afford to pay billions to offload Opel

14 Feb 2017

A sale to PSA could bring in cash or a 15-20 pct stake in a larger European carmaker. But in return the $56 bln GM may have to cover up to $10 bln of unfunded pension obligations. A boost to profit plus a higher valuation multiple might even justify handing over all of that.

Peugeot-Opel merger faces winding road to riches

14 Feb 2017

The French carmaker is in talks to buy GM's ailing European business. If the union delivers cost savings similar to those achieved by Renault and Nissan, the value created would match Peugeot's 15 bln euro market cap. But finance, management and politics are formidable obstacles.

Yellen throws sand in Trump’s deregulatory gears

14 Feb 2017

In her first Senate testimony since the president took over, the Fed boss defended post-crisis rules and said banks are robust and lending strongly, contradicting Trump adviser Gary Cohn. Fed board seats are open, but rolling back regulation may need to wait for the next chair.

Trump’s Flynn scandal has many corporate analogues

14 Feb 2017

Like messes that roiled firms from Wells Fargo to Valeant, the furor over the national security adviser's misleading statements over Russia point to a common problem: the management style of the CEO. The commander in chief has much to learn from real public-company bosses.

OPEC’s solidarity points to longer production cuts

14 Feb 2017

The cartel has taken two steps forward and one step back. Compliance with output cuts is narrowing the gap between supply and demand, but it is also encouraging U.S. producers to drill more wells. Sustained higher prices may require even more restraint to keep the market balanced.

California dam trouble reveals flood of water woes

13 Feb 2017

The Oroville reservoir damage goes beyond a $200 mln repair bill and mass evacuations. It shows a lack of investment that has left U.S. infrastructure under-maintained. Trump's financing plans may not suit the likes of Oroville. Establishing a proper price for water would.

Blackstone now stronger against boss’s party jinx

13 Feb 2017

Steve Schwarzman's lavish 60th birthday in 2007 marked an LBO peak, and the business hit the skids as his firm went public. His star-studded 70th – where Gwen Stefani replaced Rod Stewart a decade ago – has leverage creeping up again, but today's Blackstone is a tougher beast.

Verizon’s new data plans broadcast its ambitions

13 Feb 2017

Weeks ago, an executive said the $200 bln U.S. telco didn't want to offer unlimited data again. Now it's doing just that. Verizon has to match rivals like T-Mobile US. But users' appetite for streaming and shifting regulation may also mean it's joining AT&T on the media M&A hunt.

Vanguard leaves crumbs for active fund managers

13 Feb 2017

A fresh inflow of money to active U.S. equity mutual funds, the first in nearly a year, offers little solace to managers. Vanguard took in almost 90 times as much in January to cross the $4 trln mark. Passive giants' scale and cost edge continue to separate them from the pack.

Allergan adds ice and a slice to M&A cocktail

13 Feb 2017

The drug company is paying $2.5 bln for Zeltiq and its diet-avoiding, fat-freezing tech. It sounds a wackier play than the dozen deals Allergan struck last year. But vain customers pay cold cash for the treatment, making it less speculative than other deals, like gene therapy.

Ford’s $1 bln self-driving bet needs careful steer

13 Feb 2017

Investing in artificial-intelligence startup Argo can help the automaker compete for tech talent, gain insight into Silicon Valley rivals' plans and secure ownership of self-driving know-how. But Ford will need deft handling to foster the partner's innovative culture inside its own.

Hadas: How the liberal economy got lost

13 Feb 2017

As President Trump puts his promises on trade and migration into noxious practice, cowed elites are debating how their ideas failed. The big causes are forgotten history, ideological hubris, bad finance and excessive self-interest. Fixing those flaws is essential to any revival.

North Korea defies Trump’s art of the deal

13 Feb 2017

The U.S. president has softened potential conflicts with Japan and China. Pyongyang, which fired a missile on Sunday, is more troublesome. Unlike its neighbours the hermit state offers little room for common ground on jobs or trade. Trump's business savvy will be of little use.

Daniel Tarullo gives banks generous parting gift

10 Feb 2017

The tough Fed governor is resigning five years before his term expires. Tarullo was the most influential architect of post-crisis financial reform, including the stress tests. His successor may be in better position to roll back regulation than any attempt to reform Dodd-Frank.