Conglomerates

Toshiba’s $6 bln buyback signals welcome change

13 Jun 2018

The electronics group will retire more than it raised from hedge funds last year. While it was flush with cash after selling a memory chip unit, the new CEO had plenty of reasons to hoard. That he didn’t aligns Toshiba with Japan’s broader push to be more investor-friendly.

CKI’s $10 bln bid can snare Australian prey

13 Jun 2018

The Hong Kong giant is circling Australia's top gas pipeline firm. A 33 pct premium ought to satisfy APA’s board, especially as tougher rules bite. The odds are good for Victor Li’s first big deal since he took over from father Li Ka-shing at parent company CK Hutchison.

Tencent gets onboard the state capitalism train

8 Jun 2018

The gaming giant and carmaker Geely are paying $670 mln to buy into a wifi unit of China Railway. Neither is an obvious choice to help bring passengers online. Still, Beijing will encourage more of these unlikely partnerships to help its public-sector behemoths pick up steam.

Indian hospital deal merits a second opinion

24 May 2018

A Fortis Healthcare director was ousted by shareholders after three others facing a similar fate resigned a day earlier. It’s a rebuke of the decision to sell a minority stake to local tycoons. A fresh review of four other offers by a new board should lead to a better prognosis.

Speed matters for Toshiba’s new CEO

15 May 2018

Nobuaki Kurumatani’s plan for life after memory chips, while vague, suggests a welcome focus on returns. Electronics giants are slow-moving juggernauts, but with hedge funds to keep onside, he needs the $17 bln Japanese group to move faster than rivals like Hitachi have before.

Open-and-shut verdict leaves Anbang case unsolved

10 May 2018

Three months after authorities seized the insurer, a Chinese court has sentenced ex-Chairman Wu Xiaohui to 18 years in prison for fraud. The one-day trial provided only a glimpse into the opaque conglomerate. Swift justice means Anbang's rise and fall remains mostly a mystery.

Hong Kong mall deal feeds economic-hub dreams

9 May 2018

New World Development will invest $2.5 bln to build a sprawling retail centre by the city's remote airport. The pricey project goes beyond wooing flyers, though. It's a bold bet that troubled infrastructure initiatives to link mainland China, Hong Kong and Macau will pay off.

Mooch returns to place that’ll have him: Wall St

30 Apr 2018

Anthony Scaramucci is heading back to SkyBridge, the investment firm he founded, after HNA dropped its bid. The Chinese conglomerate’s rationale for buying it was more absurd than his chaotic turn as a White House flack. With HNA out and the Mooch back in, order is restored.

Sony offers an increasingly entertaining story

27 Apr 2018

The Japanese group made a record annual operating profit of nearly $7 bln, helped by a rebound in music sales and continued success in games. Yet Sony’s sprawl, including hardware, means it is stuck with an unglamorous valuation despite a global race to acquire content.

China’s bad banks go on, even if bad bankers don’t

26 Apr 2018

Huarong is humbled as graft busters oust its chairman and confiscate passports. The company is part of an aging group that evaded obsolescence by turning into distressed asset investors. With $270 bln of bank loans gone sour, Beijing needs to keep bad banks around.

GE can get ahead of chairman-CEO trend

25 Apr 2018

The conglomerate defeated a shareholder proposal to separate the top jobs. But 41 pct of investors supported the measure, up from 24 pct a year ago. Double-titled boss John Flannery could pre-empt an embarrassing rebuke next year, and improve governance, by embracing a split now.

Samsung share sale heralds a humbler chaebol

12 Apr 2018

A unit of the South Korean conglomerate sold a $500 mln stake in an affiliate to comply with new rules. More deals like this could loosen heir Jay Y. Lee's grip on the Samsung group. Investors in the $300 bln Samsung Electronics can hope for better governance as a result.

General Electric brings more bad things to light

26 Feb 2018

The $125 bln conglomerate keeps finding skeletons in its closets. A $4.2 bln charge to better account for service contracts was expected; less so are revelations GE Capital inflated its earnings. CEO John Flannery’s overdue cleanup is exposing flaws throughout the weakened giant.

Swire wisely calls on family to steady the plane

9 Feb 2018

The venerable Anglo-Asian conglomerate named a family member as chairman of its flagship Hong Kong unit. That signals it is taking problems at Cathay Pacific Airways and in oilfield services seriously. This could be good news for long-suffering Swire Pacific investors.

Bull market lets activists see virtue in passivity

26 Jan 2018

Bill Ackman, who lost his fight with ADP, has taken a stake in Nike but isn’t pushing for change. Dan Loeb sat back as Honeywell’s new boss ignored his advice and beat his targets anyway. Even pushy hedge funds can be tempted to simply ride the waves when a rally lifts all boats.

U.S. tax cuts pile on pressure for GE to shrink

24 Jan 2018

They should help, long term. But a big charge contributed to a whopping $9.8 bln fourth-quarter loss at the conglomerate, whose top line also declined. Cost cuts and cash-flow gains buy CEO John Flannery breathing room, but the breakup option is looming increasingly large.

P&G’s razor burn calls for radical salve

23 Jan 2018

The Pampers-to-Gillette maker’s sales grew 3 pct in the second quarter. But that’s in spite of continued attrition in its grooming division. P&G is selling more blades but making less money. As activist Nelson Peltz joins the board, P&G’s razors look increasingly disposable.

GE’s legacy losses reinforce case for breakup

16 Jan 2018

A $6.2 bln charge relating to reinsurance - a business the company exited over a decade ago - shows the challenge of managing a conglomerate. CEO John Flannery is struggling to shrug off the past and turn to the future. At least he’s open-minded enough to consider a GE carve-up.

Telecoms IPO would be a smart step for SoftBank

15 Jan 2018

Floating a Japanese cash-cow subsidiary could unlock $18 bln, which boss Masayoshi Son could use for yet more bold bets on new technology. The move might help lift the unit’s performance. It could also help address the persistent discount the market applies to SoftBank shares.

HNA’s hard job: put the M&A machine into reverse

12 Jan 2018

The acquisitive Chinese group has been buffeted by regulatory setbacks and signs of financial stress. Now trade in two key listed units in China is halted, suggesting a corporate reshuffle could be looming. HNA will find shrinking back to health tougher than breakneck growth.