Conglomerates

Ratan Tata lowers the tone for fights to come

11 Nov 2016

A rambling press release from India's top conglomerate attempts to justify Tata Sons' recent sacking of its chairman. The personal and defensive style raises questions about the role of the firm's star-studded board and foreshadows messy struggles over the group's listed units.

Ratan Tata’s old partner is a $12 bln problem

9 Nov 2016

A bust-up at India's Tata Sons has set the patriarch against Cyrus Mistry, whose family has a decades-old 18 pct stake. A minority bet on a private group beset by governance issues won't appeal to activists or sovereign funds. Ratan Tata needs to dig deep if he wants Mistry out.  

Shenanigans at Tata taint India’s governance wins

1 Nov 2016

Corporate oversight is improving despite a messy spat at a conglomerate people thought represented the highest standards in the country. There is a long way to go, but investors are becoming more vocal, proxy firms are on the rise, and tycoons are on shorter leashes.

Tata ex-chairman turns rebel without a clear cause

27 Oct 2016

The ousted Cyrus Mistry has penned an activist-worthy letter outlining problems at the Indian conglomerate, including over-priced deals and poor governance. Long term, the family-controlled holding apparatus might reform itself. Short term, it may only create more mess.

Tata’s head hunt calls for clarity on governance

26 Oct 2016

A search is on for a leader of the $100 bln Indian conglomerate after the sacking of its chairman. Big names like Indra Nooyi and Arun Sarin are doing the rounds. But to attract top talent, Tata needs to address governance. A commitment to limit meddling would be a good start.

LVMH results showcase benefits of mixed luxury bag

26 Jul 2016

A pop in demand for champagne and cognac boosted sales of the fancy French conglomerate in the first half and offset declines at its core fashion division. As travel fears and lower demand for designer goods bite, LVMH's diversity allows it to hold its own better than rivals.

Mondelez can stomach a richer bid for Hershey

30 Jun 2016

The confectioner rejected a lowball offer from Cadbury's parent. Mondelez could pay $26 bln without hurting its shareholders or incurring excessive debt. The jubilant reaction from investors to the initial bid may tempt CEO Irene Rosenfeld to sweeten the terms of her offer.

GE’s 50 billion reasons not to be a SIFI

29 Jun 2016

That's the dollar amount of market cap the U.S. conglomerate has added since it said it would wind down the finance arm that watchdogs said posed a systemic financial risk. Relative to the market and rivals, the gain is bigger still. Complacent mega-bank shareholders, take note.

Life lessons from a German corporate failure

3 Jun 2016

With six profit warnings, four CEOs and its share price halving over two years, German industrial services group Bilfinger is a huge corporate disappointment. Now it is finally dismantling itself. Other companies can learn from some of Bilfinger's more glaring mistakes.

Tata’s portfolio power still just about adds up

24 May 2016

Problems at its British steel unit raise questions about the direction of India’s most respected conglomerate under Chairman Cyrus Mistry. The performance of the group’s other big listed companies has been a mixed bag. But viewed as a collective, Tata’s performance stacks up.

ABB’s soul-searching is dragging on too long

20 Apr 2016

The Swiss engineer says it needs until October to decide what to do with its Power Grids unit, under review since the autumn. CEO Ulrich Spiesshofer deserves credit for improving the division’s operational performance. But the decision to sell the unit looks clear enough now. 

Li Ka-shing brings funding finesse to telco M&A

18 Mar 2016

The tycoon may sell 20 pct of his UK mobile unit to outsiders. That could raise 1 bln pounds to help buy Telefonica’s O2, on top of the 3.1 bln pounds sovereign funds are already chipping in. That would let Li complete the 9 bln pound deal with no fresh investment.

M&A cycle reaches "running out of ideas" phase

23 Feb 2016

Time Inc’s interest in Yahoo’s bits, a Deutsche Boerse-LSE marriage and merger talks - however unlikely – between Honeywell and United Technologies are all variations of deals that have been tried but failed for regulatory and other reasons. They may fare no better this time.

Samsung investors schooled on restructuring bets

29 Jan 2016

The heir to South Korea’s top conglomerate is selling part of his stake in Samsung SDS. That’s a disappointment for shareholders hoping for a merger between the IT services company and flagship Samsung Electronics. Guessing what Jay Y. Lee will do next is risky business.

U.S. companies off-key singing strong-dollar blues

27 Jan 2016

Apple, DuPont, J&J and P&G blame the greenback’s rising value for lowering quarterly sales. They have a point, but a robust currency helps consumers, importers, service providers, real-estate sellers and others. That’s reason enough for Americans to whistle while they work.

GE making wicked smaht HQ move to Boston

13 Jan 2016

Despite being the capital of a state once derided as Taxachusetts, Beantown ticks boxes for a hulking global company. Relocating from a sleepy part of Connecticut to a university town with a startup and engineering culture, and solid infrastructure, should advance GE’s makeover.

Worst CEO job in America for 2016? P&G

29 Dec 2015

David Taylor will struggle to make his mark on the lumbering $200 bln giant. His predecessor-turned-Chairman A.G. Lafley already axed weaker brands, leaving Taylor to sort out growth. He may be forced to break up the Tide-to-Pampers icon or spend the year fighting calls to do so.

Newell Rubbermaid overworks M&A machine

14 Dec 2015

The serial-acquiring owner of Sharpie markers and Graco baby gear is buying Jarden’s motley collection of candles, camping gear and more for over $15 bln. The value of the proposed cost savings more than covers the $2.7 bln premium, but the scale and debt strain conglomerate logic.

DowDuPont tests limits of ambitious M&A

11 Dec 2015

A $130 bln union of the U.S. chemical titans is really four deals in one, given a planned three-way breakup to follow. The $30 bln of estimated value creation from cost savings is aggressive. Mergers of equals often become strained. At least the strategic rationale makes sense.

Goldman and Morgan Stanley cement M&A oligopoly

11 Dec 2015

Both banks landed advisory roles on either side of the $130 bln DowDuPont merger, extending their league-table leads in a record year of dealmaking. They also held the one and two spots during the 2007 and 2000 peaks. Cracking the top tier can be done, but it’s exceedingly rare.