Ireland

Ireland can have political stasis without tears

17 Feb 2016

The Irish may end up with a hung parliament when the country heads to the polls next week. That needn’t threaten a roaring economy and strong job creation. The biggest risk to Ireland’s GDP growth would be losing its low corporate tax rate. That’s not in politicians’ interest.  

Magic formula fuels Ryanair’s ascent

1 Feb 2016

The lure of cheap flights has proved a match for Europeans’ fear of terrorism. The Irish carrier lowered prices after attacks in Paris, attracted 20 pct more passengers in the latest quarter than a year earlier, and even expanded its margins. High-cost rivals can’t keep up. 

Ireland has limited shelter against Brexit storm

26 Jan 2016

The Irish state is right to fret about a UK exit from the EU. It could knock 20 pct off trade between the two countries and hit Ireland’s economic recovery. Rebranding Dublin as a financial hub would help – but requires Germany to beef up the euro zone’s half-done banking union.

Johnson-Tyco inversion is insured against politics

25 Jan 2016

U.S. building-controls maker Johnson Controls’ $16 bln purchase of Ireland-domiciled Tyco risks becoming a target for critics of tax-reducing deals. But with an expected $500 mln of yearly savings and a low 11 pct premium for Tyco’s owners, tax savings are gravy, not meat.

Shire’s merger with Baxalta looks a little peaky

11 Jan 2016

The drugmaker’s Chief Executive Flemming Ornskov has clinched his deal to buy haematology specialist Baxalta for $35 billion. The deal brings Shire scale in rare diseases, but offers few cost synergies, plenty of risk and relies on revenue growth that may be optimistic.

Pfizer’s war chest stealthily rebuilt by Allergan

25 Nov 2015

The $160 bln mostly stock deal will create a combination gushing $25 bln of operating cash flow annually. An offshore tax address means there’s no reason to keep over $60 bln of cash on its balance sheet. That’s a lot of financial firepower to buy back shares and fuel more M&A.

Delay in Pfizer split is material adverse event

24 Nov 2015

The $160 bln acquisition of Allergan will cut taxes and add solid assets, but it’s also causing Pfizer to defer until 2018 a decision on splitting up. Even though the company’s disposals have added greater value than acquisitions, CEO Ian Read seems more eager to bulk up.

Pfizer-Allergan to throw down tax-reform gauntlet

23 Nov 2015

The drug firms are shrugging off Uncle Sam’s latest attempt to prevent mergers predicated on relocating to low-tax jurisdictions. The largest-ever inversion, at some $150 bln, ought to raise pressure on lawmakers to find more comprehensive fixes to the great M&A tax dodge.

Candy Crush bid relies on hope over experience

3 Nov 2015

The London-based maker of the sweet-matching mobile game is selling to Activision for $5.9 bln. It’s just a 20 pct premium, which leaves investors in last year’s IPO with a loss. With few synergies, this looks as much an excuse to use excess cash as a sound bet on future hits.

Shire pays up for easier prey than Baxalta

2 Nov 2015

The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.

Irish penny-pinching could bring inflation-think

23 Oct 2015

No more small change in the Emerald Isle from Oct. 28. Low value coins are an economic drag, so rounding up or down makes sense. Consumers may think prices are rising. But wait – that’s exactly what many central bankers are trying to achieve. This could be worth copying.

Euro zone rediscovers sloppy fiscal policy

15 Oct 2015

Deficits are creeping up in Spain, Italy and even growth star Ireland. Reasons include easy money and pre-election spending. As yet, the gaps aren’t dangerously big. What’s more worrying is poor spending decisions, slowing reforms and fiscal dissonance between member states. 

Prognosis is bleak for Shire’s troubled Baxalta bid

9 Oct 2015

The rout in pharma stocks has made the Irish group’s all-share offer less attractive for its recently spun-off U.S. rival. Shire would have to add much more stock to offer Baxalta the $30 bln it initially touted. It should delay – even if it then misses its chance altogether.

Irish mogul fails to connect with IPO investors

7 Oct 2015

Denis O’Brien has shelved plans for a $2 billion listing of Digicel, his Caribbean telco. Markets haven’t treated recent IPOs kindly. But Digicel’s undemocratic voting structure, high debt and exposure to the Haitian gourde required an especially strong stomach.

Chinese plane-hire deal survives market turbulence

4 Sep 2015

Bohai Leasing’s $2.6 bln bid for Dublin-based Avolon confirms China’s desire to grow in aircraft rental. The $31-a-share offer is slightly below Bohai’s indicative bid a month ago. But rising interest rates and the falling yuan could have been reasons to drive a harder bargain.

Gamblers’ $8 bln tie-up raises odds for rivals

26 Aug 2015

Paddy Power and Betfair have agreed to a possible all-share merger. The two look evenly balanced: the Irish group is big in traditional betting, its UK peer in online exchanges. Greater scale should offer some defence against industry consolidation and rising taxes.

Shire can’t easily pay more for Baxalta

14 Aug 2015

The pharma group’s all-stock $75 bln merger approach has been rejected by its rival. Shire’s bid relies on aggressive claims to boost revenue, which Baxalta disputes. Breakingviews’ model shows Shire chief Flemming Ornskov can’t dig much deeper without bold assumptions.

Shire M&A machine stumbles on $30 bln Baxalta bid

4 Aug 2015

The onetime Irish target for AbbVie is planning a mega-deal of its own. Unlike the previous combination, Shire’s Baxalta purchase has industrial logic as well as tax benefits. Shareholders, though, might have preferred being bought out to assuming all the risks of a takeover. 

Latest pharma roll-up leaves lots of room to grow

7 Jul 2015

Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.

Amazingly, Irish homebuilder float looks a hit

9 Jun 2015

Ireland may be the real estate basket case of Europe, but a Dublin-based housebuilder is planning a London float. With most of its competitors bankrupt, strong demographics driving demand and prices in the Irish capital up 22 pct last year, Cairn Homes could be on to a winner.