Conglomerates

Humpty Dumpty M&A sings song of excess

6 Aug 2015

Bill Ackman has taken a stake in the $75 bln Mondelez, seemingly predicated on the possibility of putting it back together again with Kraft. Meantime there’s talk of successful tech spinoff VMware absorbing its parent EMC. It’s fantasy season for all the Street’s men.

Toshiba crisis tightens the screws on Japan Inc

21 Jul 2015

A probe found $1.2 bln of phantom profits at the electronics giant. Corporate reforms mean firms in Japan are already under huge pressure to show they are better-run and more profitable. Now they will have to work even harder to prove that overhauls are not just cosmetic.

Agnellis nudging PartnerRe out of rival’s reach

20 Jul 2015

Exor, the Italian family’s investment vehicle, has a better offer for the Bermudan reinsurer than Axis. Common shareholders would get more money, in cash, and preferred stockholders extra assurances. A last-minute counter by Axis would hurt its and PartnerRe’s investors.

Samsung-Elliott showdown will shake up South Korea

13 Jul 2015

This week’s vote on Samsung’s $9 bln intergroup merger will be tight. Defeat at the hands of the U.S. hedge fund could usher in a new era of corporate governance. Even if the vote passes, big conglomerates will tread more carefully with independent shareholders in future.

Coty’s $12.5 bln P&G deal slaps on too much makeup

9 Jul 2015

The fragrance giant is touting $550 mln of cost cuts from buying its larger rival’s beauty business. But that overstates the financial benefits of a tie-up that will take time and money to consummate. Coty’s once over-enthusiastic investors are at least seeing through the gloss.

Elliott buys new stick to beat Samsung

7 Jul 2015

The activist fund has a new lever to oppose the South Korean group’s ruling Lee family over a $9 bln merger. Buying stakes in two more group firms probably ups Elliott’s total outlay on Samsung by more than a quarter. This makes the fight more complex – and perhaps uglier.

Asia’s M&A boom leaves old guard in charge

7 Jul 2015

Regional deals could be worth $1 trln this year. But the bonanza offers less than investors might hope. Backing from states and tycoons makes many companies bid-proof. That means fewer premium bids, less pressure on firms to shape up, and more stitch-ups of minority shareholders.

GE could yet pull cooking appliance deal from fire

1 Jul 2015

U.S. trustbusters sued to block Electrolux’s $3.3 bln purchase of the conglomerate’s oven business. The firms may be able to pull an American Air-US Airways and sell assets to save the deal, but market definition issues loom. Either way, Uncle Sam knows how to turn up the heat.

South Korean M&A quirks hold perils for investors

24 Jun 2015

A $9.2 bln merger led by Samsung’s holding company has cast a spotlight on the country’s peculiar stock market rules. The dealmaking shows the limits of measures designed to protect independent investors and how the wider system is stacked in favour of the chaebols.

How to tell if Japan’s shareholder love-in is real

15 Jun 2015

Japan Inc. faces unprecedented pressure to get leaner, better-run, and more profitable. Real success means higher returns on equity. First comes a tough AGM season that could embarrass the likes of Sony and Sharp. Then expect more buybacks, stake sales, activism and M&A.

Hardball Samsung move sets up chaebol reform test

11 Jun 2015

Samsung C&T has sold a 6 pct stake to a friendly party to neuter opponents of its $10 bln merger with the South Korean conglomerate’s holding company. Official reaction to the underhand maneouvre will show whether the country really wants to rein in its large corporations.

Samsung succession game puts investors to the test

2 Jun 2015

Shareholders in Samsung C&T have good reason to resist a $9.2 bln takeover by the South Korean group’s holding company. Opposition might delay a potentially lucrative wider restructuring. But it would warn the founding Lee family against further mistreating independent investors.

Samsung’s $8 bln restructuring offer looks cheeky

26 May 2015

The South Korean group’s ruling Lee family is offering shares in its Cheil Industries holding company for Samsung C&T at almost no premium. The deal looks central to the clan’s succession plan. With 4 pct of Samsung Electronics at stake, C&T investors can hold out for more.

GE Capital sale may be zero-sum TBTF game

21 Apr 2015

Shrinking the finance unit should allow GE to ditch its systemically worrisome tag. One possibility is Wells Fargo buying $83 bln of the assets, in deals that would surpass the comfort level of regulators for most bank M&A so far. And it would make one mega-bank even more mega.

GE’s higher sum may reflect most of the parts

17 Apr 2015

With the financial arm being jettisoned, the focus starting with Friday’s Q1 results is squarely on the industrial businesses. Valuing the pieces similarly to rivals, $276 bln GE carries a smaller but conspicuous conglomerate discount. Don’t expect it to shrink much more.

Wall Street bids slow farewell to GE fee darling

13 Apr 2015

The U.S. conglomerate has been the best corporate client for investment bankers since 2000, spending some $5.1 bln for assistance. Shrinking GE Capital will keep M&A dealmakers happy. The unit’s borrowing, however, is the biggest moneymaker. Much of that could now be at risk.

GE finally exorcises Jack Welch’s financial demons

10 Apr 2015

It took a near-death experience and flat-lined shares, but Jeff Immelt is ditching banking and returning GE to its industrial roots. The timing works on many levels: asset values are high and lending businesses can be funded. Immelt also keeps a step ahead of prowling activists.

Immelt’s SIFI escape route is tough to follow

10 Apr 2015

The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.

GE shows way by ending wait for tax Godot

10 Apr 2015

The U.S. conglomerate is bringing home $36 bln and will pay $6 bln in taxes on it. The move helps GE deliver a capital return plan with sufficient heft to make a mark. It also should be big enough to be noticed by other companies paying a price for leaving some $2 trln overseas.

GE cracks open boardroom door for shareholders

12 Feb 2015

The $250 bln conglomerate will allow long-term owners of 3 pct or more of its stock to nominate directors. Few investors qualify, but at smaller firms the idea could bring big changes. GE’s move – echoing an SEC rule that was struck down – helps spread the good governance word.