Air Transportation

China Inc helps AIG streamline, at a price

10 Dec 2012

Selling its aircraft leasing arm to a Chinese consortium will raise $4.2 bln - half the value of the U.S. government’s remaining stake in the insurer. The cash could help fund a later buy-back. But the price looks mean next to similar deals, and AIG isn’t getting a clean exit.

Diageo’s India splash won’t get Kingfisher flying

12 Nov 2012

The British group’s cash brings relief to India’s largest liquor company and its chairman Vijay Mallya. The hope is the tycoon will use some of his booty to revive grounded Kingfisher Airlines. But without a strong partner and the promise of debt restructuring, that won’t happen.

Not all internet investors are irrational fools

9 Nov 2012

The reaction to Priceline’s $1.8 bln deal for rival travel website Kayak is a case in point. With no synergies or obvious industrial logic, it’s nice to see Priceline owners thwack the shares for the company’s adventurism. Internet stocks shouldn’t be a free pass to get stupid.

BAE needs a new chairman

12 Oct 2012

The UK defence company had to embrace the EADS deal because it was too weak to go it alone. Dick Olver, the chairman, must carry the can both for allowing BAE to slide and for poor management of the attempt to secure salvation-by-merger. Fresh leadership is required.

EADS can’t move if it doesn’t change. But can it?

10 Oct 2012

The Airbus maker couldn’t do a deal with BAE because of its skewed, politicised governance. CEO Tom Enders may have been over-optimistic in thinking the Franco-German group was a normal company. He still has work to do to convince the French and German governments to step back.

BAE must show standalone strength post-EADS

10 Oct 2012

An “in play” BAE may attract a low-ball bid. So the UK defence group must reassure investors. But there are few levers to pull. It has been cost cutting for years. And with defence budgets still shrinking, showering shareholders with cash does not look too wise.

BAE pays price for having no deal to sell

8 Oct 2012

The UK defence group’s lead investor has taken aim at the EADS merger. Finessing leaked deals is always tricky, and angry investors nowadays seem almost de rigueur for big M&A. Still, Invesco’s intervention shortens the odds on a BAE management clearout if the tie-up fails.

France’s silly stake obsession could kill BAE-EADS

8 Oct 2012

Germany, France and the UK could agree on the BAE-EADS merger if Paris didn’t insist on keeping a large stake in the joint company, confirming the fears of the deal’s opponents. The French government doesn’t seem to get that there are other ways to remain influential.

UK should foster not fear BAE-EADS tie-up

5 Oct 2012

Former Chancellor Alistair Darling says UK interests may suffer if France and Germany held sway over the defence merger. Britain certainly needs safeguards to protect national security. But these can be found. And the alternative - no deal - wouldn’t be in the national interest.

Executive rewards mustn’t distort M&A decisions

4 Oct 2012

Big retention packages for Xstrata’s CEO angered investors. Now there’s confusion over whether a tie-up with EADS would trigger a bonanza for BAE’s CEO. With the shareholder spring still echoing, companies must show windfalls at the top don’t distort decision-making.

Chinese sightseers present challenge to the world

3 Oct 2012

Half the country’s 1.4 billion inhabitants are expected to travel during this week’s national holiday. A new love for tourism provides a much-needed economic boost. But giant traffic jams and a deadly boat crash in Hong Kong underscore the difficulty of coping with the crowds.

India’s Kingfisher can still avoid futile closure

2 Oct 2012

The airline, which suspended operations on Oct. 1 after a labour dispute, can fly again if its licence is not revoked. A full shutdown would hurt creditors unduly - and undercut the government’s decision to welcome foreign carriers as white knights.

EADS/BAE merger risks hitting political wall

1 Oct 2012

Lagardere, the media group owning 7.5 pct of EADS, adds to the uncertainty of the aerospace and defence merger by deeming it “unsatisfactory”. But the real obstacles are political. France and Germany must convince the UK, the three in turn have to win over the U.S. No small feat.

Franco-German politics first hurdle for BAE/EADS

25 Sep 2012

The two European defence and aerospace companies can’t merge unless Paris and Berlin settle their differences over governance and shareholdings. The tension is typical of EADS’ own complex political and economic history. The BAE deal offers a golden opportunity to clear the air.

Boeing could play BAE-EADS spoiler on many fronts

19 Sep 2012

Europe’s $45 bln defense deal needs U.S. security clearance and perhaps a nod from Congress. Boeing wields enormous clout in Washington and has a history of using it against rivals. Valuations and looming military cuts also mean a bid for all or part of BAE can’t be ruled out.

Dual listing may hinder bets on BAE-EADS

18 Sep 2012

If the duo can agree on a $45 billion tie-up, that should be a godsend for thumb-twiddling merger arbitrageurs. But political and security hurdles abound. Moreover, plans to create a “dual-listed” successor add an extra layer of risk for any arbs backing the deal.

BAE could find a plan B

14 Sep 2012

The UK defence giant has options if shareholders or governments torpedo its planned deal with EADS. A merger with Rolls Royce sounds implausible. But signs that the EADS union really is faltering could tempt a handful of U.S. defence heavyweights to try a transatlantic tie-up.

Markets hit EADS for straying off-target with BAE

13 Sep 2012

Investors seem to think EADS plus BAE is worth $4 bln less than the two companies alone. That’s not how mergers should work. That reaction may be punishment for springing a surprise - and one that will create a major stock overhang. An already complex merger is getting trickier.

BEADS politics ain’t as bad as they used to be

13 Sep 2012

Europe’s three largest powers are involved in the proposed jumbo merger between EADS and BAE, yet there’s a hope politics might play a limited role. Governments have other things on their minds, and EADS isn’t the political mess it was five years ago. But the risk still exists.

Old dogs of war get mega M&A deal

13 Sep 2012

Bankers often say they are in the relationship business. With the proposed EADS/BAE tie-up, this sales patter is actually true. Advisers such as Evercore’s Bernard Taylor and Gleacher Shacklock’s Tim Shacklock have been counselling these companies for donkey’s years.