Conglomerates

Viewsroom: Silicon Valley spotlight

30 Jul 2020

The CEOs of Big Tech companies faced off against U.S. lawmakers during an antitrust hearing that raised new evidence about past acquisitions. Meanwhile, Japan’s Ootoya and Colowide engage in a food M&A fight. And: SoftBank CEO Masayoshi Son’s next steps.

GE’s recovery is stuck in the slow lane

29 Jul 2020

It burned less cash than boss Larry Culp feared in the second quarter – with help from the Pentagon – and while revenue fell 20%, its industrial customers are slowly regrouping. GE is chasing savings and lay-offs, but still seems to be shying away from more dramatic maneuvers.

Unilever almost looks fair and lovely in India

22 Jul 2020

A focus on hygiene, health and nutrition helped lift earnings at the consumer giant’s local unit, a $73 bln maker of skin-lightening products and more. Newly acquired Horlicks is pulling its weight, too. It goes some way to justifying a valuation three times its global parent.

Crisis forces Australia and China closer

21 Jul 2020

Despite diplomatic tension, miners BHP and Rio are cashing in on Beijing's infrastructure stimulus. Supply disruptions in Brazil and weak global demand have left the two trading partners even more dependent on each other. Politics can’t change facts under the ground.

SoftBank will struggle to find equal love of Arm

14 Jul 2020

The Japanese conglomerate paid $32 bln for the chip designer in 2016. Businesses have been hived off, while sales growth and operating profit have underwhelmed. As boss Masayoshi Son contemplates floating a piece of Arm, under pressure, it could be hard to avoid a markdown.

Lemonade’s secret ingredients are tech and hope

25 Jun 2020

The digital insurer’s $1.3 bln valuation is leagues above what a regular insurer would command. Then again, Lemonade is less of an insurance company and more of a marketing machine with some charming quirks. Its biggest threat is that old-school insurers copy the recipe.

GE’s audit switch wipes away another layer of dust

22 Jun 2020

The company is switching to Deloitte after a century with KPMG, exiting a club of audit lifers that includes U.S. Steel and P&G. It took too long and a radical new approach is unlikely given auditing remains an oligopoly. Still, fresh eyes should make for sharper housekeeping.

FOMO draws a crowd to Reliance’s Jio club

19 Jun 2020

Mukesh Ambani has delivered on a promise to make his group net-debt free after raising $22 bln. Most of that came from selling pricey stakes in tech unit Jio to KKR and others. A fear of missing out on India’s next big thing will have helped. Still, the frenzy is rational.

SoftBank Sprint win is mostly currency and debt

18 Jun 2020

Masayoshi Son's group may sell up to two-thirds of its now $31 bln stake in T-Mobile US. After a long wait for Sprint to merge with its rival, the risky bet made just a 5% annualized return in dollars. The rest, a 25% IRR according to Son, is down to luck and leverage.

Perfect storm blows Swire Pacific model away

16 Jun 2020

The Hong Kong conglomerate expects big first-half losses in its property, airline and marine services units. Protests, Covid-19 and weak oil demand have taken their toll. The sprawl wasn’t providing much of an edge before disaster struck, however, and warrants reconsideration.

Hong Kong tacks on Cathay to complicated itinerary

9 Jun 2020

The government is leading a $5 bln bailout of the struggling carrier, buying preferred shares. Owner Swire also vowed to keep control as part of an accompanying rights issue. That eases concerns about an Air China takeover, but it’s still a dicey deal amid the city’s unrest.

Reliance makes clever use of buy now, pay later

4 Jun 2020

Purchases by installment are hot in retail but the Indian conglomerate is bringing them back to capital markets. Investors buying into a $7 bln rights issue can settle up through November 2021. It sidesteps a Covid-19 cash crunch and boss Mukesh Ambani’s backstop covers up flaws.

Even a chastened SoftBank leans on engineering

2 Jun 2020

Boss Masayoshi Son is scrambling to clean up his “foolish” and costly WeWork mess. Instead of just selling some Alibaba shares, though, he’s using derivatives linked to them to raise $11.5 bln. The transactions are fiddly, but in this case may be a good use of creative finance.

India Insight: Mukesh Ambani sets high bar for Jio

1 Jun 2020

At $68 bln, the tycoon’s telecom operator is being valued like a tech startup. It’s backed by A-list investors from KKR to Facebook, and more are queuing up. Growth has been impressive. But the wannabe super-app could encounter serious competition in the country’s digital race.

Corona Capital: GE cash burn, Macy’s lifeline

28 May 2020

Concise views on the pandemic’s corporate and financial fallout: General Electric’s cash flow will be more negative than expected as Covid-19 damages its aviation and power businesses; and U.S. department-store chain Macy’s borrows more, buying time but not much else.

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.

SoftBank’s clouds come with some silver linings

18 May 2020

A record $12.7 bln annual loss surpassed its warnings. But activist Elliott’s push is yielding results, funds are being spent less giddily and asset sales are on. The board is getting a revamp too, as Alibaba’s Jack Ma exits. The taming of boss Masayoshi Son is gaining traction.

Three deals that can measure India’s pulling power

6 Apr 2020

Mukesh Ambani’s Reliance Industries and the Tata group want partners for businesses from oil and chemicals to consumer tech and cars. The success of stake sales by the country’s A-list will be a key measure of India’s attractiveness to foreign investors in a post-virus world.

Viewsroom: SoftBank in the crosshairs

13 Feb 2020

Activist Elliott is targeting Masayoshi Son’s firm for poor governance and performance. SoftBank could appease the hedge fund by selling investments to finance buybacks. That could include Sprint, whose deal with T-Mobile US just got the nod. Plus: the race for the White House.

Tata test-drives conglomerate power

30 Jan 2020

Various companies in the $160 bln Indian empire are uniting to support an electric-car initiative. In theory, it should give Tata Motors an edge over Western rivals forced to find outside partners. If it all works in practice, it could deliver rare and valuable synergies.