Conglomerates

Keep an eye on Seoul for Asia’s next big buyer

3 Jan 2019

Japan’s Takeda and China’s CIC have been among the regional leaders in overseas M&A in recent years. South Korean conglomerate SK Group may be next. It is tech-hungry, hampered at home and flush with cash from chipmaking. Bankers should put boss Chey Tae-won on speed dial.

Samsung faces ghost of technology future

27 Dec 2018

South Korea's $230 bln giant is hurting with a fall in memory chip prices and uncertainty about future growth. U.S. rival Intel missed the mobile boom. To avoid a similar fate, heir Jay Y. Lee needs to spend some of its cash hoard to catch up with nimbler rivals in AI and 5G.

SoftBank’s downward debut damns Japan’s IPO market

19 Dec 2018

Shares in the group’s mobile unit fell sharply on their first day of trading. It’s been a poor year for Tokyo issues, but this $24 bln float might have revived enthusiasm. Unfortunately, boss Masayoshi Son overplayed his hand. Now he’s made it harder for the rest of the queue.

Hitachi buys live wire in ABB power deal

17 Dec 2018

The Japanese conglomerate is paying a handsome $11 bln valuation for the lacklustre power grid unit of its Swiss rival. Activists there will be placated by the proceeds and a restructuring. Hitachi becomes an industry giant but finding other benefits, like synergies, will be tricky.

General Electric can go from bad to worse in 2019

11 Dec 2018

The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.

The Exchange: Joe Kaeser

10 Dec 2018

It’s hard to imagine a company embodying as many of the challenges and opportunities of 21st century capitalism as Siemens. The German conglomerate’s CEO swings by Times Square to discuss trade, breakups, power, automation, labor, Saudi Arabia and lots in between with Rob Cox.

Hong Kong tycoon tunneling out of public markets

7 Dec 2018

Gordon Wu, whose mega-bridge idea was just built, has offered to take his property company private 40 years after its IPO. A $2.7 bln bid puts a big premium on Hopewell’s share price, but still discounts underlying assets. Peers similarly frustrated by valuations may follow suit.

Hadas: Conglomerates will never die

5 Dec 2018

The break-up of GE and United Technologies marks the end of an era, but there will always be good reasons to bind together diverse businesses. Removing barriers brings synergies, spreads talent and saves on taxes. The trick is to avoid stultifying complexity and financial games.

Hello concentration, goodbye conglomeration

27 Nov 2018

United Technologies is splitting into three while also closing a deal that creates an aerospace-parts giant. Like DowDuPont and others, activists and a need for competitive heft leave companies little choice – though tariffs and economic concerns stole $96 bln UTC’s show.

Colfax trades aging industry for aging Americans

19 Nov 2018

The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.

GE may be canary in credit market’s coal mine

15 Nov 2018

The firm’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all credit investors. U.S. companies carry more debt than ever, and quality has deteriorated. Rising interest rates and slowing growth could make this a big problem.

U.S. companies seek to kick big pharma addiction

13 Nov 2018

Walmart and Home Depot are fighting back against drugmaker programs that cut patients’ expenses while leaving employers paying full fare. It’s part of an escalating war between providers, insurers and corporations over healthcare costs. The effectiveness remains to be proved.

GE eases blow with Baker Hughes share sale

13 Nov 2018

The $70 billion industrial company is selling a chunk of its 62 percent stake in the oil-services firm a day after it said it urgently needed cash. The timing isn’t optimal. But it is better to do something than nothing, and GE can test the waters while saving dignity.

GE boss could face his own goodwill writedown

12 Nov 2018

The firm’s stock sank anew on Monday despite Larry Culp’s vow to speed asset sales. Repeated failures to draw a line under power woes and other liabilities have shredded GE’s credibility. The new chief risks falling into the same trap, and losing investors’ confidence.

P&G lathers up for a close shave

9 Nov 2018

The $230 bln consumer-goods giant is reorganizing into six groups, each with its own CEO. Boss David Taylor argues that’ll give them greater focus. But it also makes it easier to trim off any groups that fail to perform. Grooming may be first for the barber’s chair.

Australia’s CKI veto scrambles the China message

8 Nov 2018

Canberra is set to block the $9.4 bln takeover of its biggest gas pipeline company by an arm of Hong Kong's CK Hutchison. APA shares have lagged, hinting at some risk. Timing the news to coincide with a much-vaunted trip to repair ties with Beijing, though, looks careless.

DowDuPont needs its breakup more than ever

31 Oct 2018

Recession fears and a writedown have burned off a quarter of the chemical giant’s value. It’s too strong a reaction: its businesses won’t suffer equally in a downturn. Dow’s worth some $175 bln, 40 pct above its current value. Next year’s three-way split should crystallize that.

GE’s new boss struggles to find the bottom line

30 Oct 2018

The ailing conglomerate missed sales and earnings estimates and notched a $23 bln loss after a massive power writedown. A 90 pct dividend cut will conserve much-needed cash and shows CEO Larry Culp is serious. Still, there’s little evidence of a turnaround in sight.

Korean conglomerate accentuates the discount

30 Oct 2018

Nearly six years after selling a controlling stake in Coway to a private equity shop, Woongjin is buying it back with a partner for $1.5 bln. News of a return to its original steward erased 25 pct of the appliance rental company’s value. It’s a reminder of just how sprawl can scare.

P&G’s innovation drive could use a boost

19 Oct 2018

Healthy consumers helped the consumer-goods giant report strong sales. Even its troubled razor business has sharpened up a little. P&G is following activist Nelson Peltz’s advice and trying new things. With costs rising and pricing power weak, it can’t afford to slacken the pace.