Conglomerates

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.

Asian conglomerates lose plot in $10bln CITIC deal

20 Jan 2015

That’s what Japan’s Itochu and Thailand’s CP Group are spending to buy 20 pct of the state-controlled Chinese giant. Only then will the three decide how they can work together to create value. The back-to-front deal allows CITIC to tick a “reform” box while giving up very little.

Cheap oil lubricates Li Ka-shing’s corporate rejig

12 Jan 2015

Asia’s richest man is shifting a 6 pct stake in Canada’s Husky Energy to his holding company as part of a broader shake-up. The move is vital to keeping Li’s grip on the telco-to-property empire. Though shareholders may object, the falling oil price has worked in their favour.

Clunky conglomerates put on high breakup alert

6 Jan 2015

Billionaire Carl Icahn wants to separate Manitowoc’s construction cranes from its ice machines. Companies with such head-scratching pairings make easy targets for freshly invigorated uppity investors. Pitney Bowes and JBT are among those that may want to keep vigilant guard.

Alibaba in 2016: an imagined letter to investors

29 Dec 2014

The e-commerce group’s first year as a listed company brought growth and change, departing chairman Jack Ma writes in a hypothetical memo. Profitability is falling, regulators circling, and new projects have uncertain returns. Even a thoroughbred is tested on a long journey.

Goodbye tech conglomerates, hello "ecosystems"

19 Dec 2014

Companies have been using that word to justify building internet-based empires out of a mish-mash of assets with hard-to-identify synergies. Asian players like China’s Alibaba and Japan’s Softbank are amongst biggest fans of this unhelpful jargon.

United Tech shows way for other company boards

8 Dec 2014

The U.S. defense firm’s directors unexpectedly ousted the chairman-CEO after deciding his mind wasn’t fully on the job. They had a strong in-house replacement at hand, ensuring that investors barely blinked. Even boards with separate chairmen aren’t usually so on the ball.

Samsung IPO offers ringside seat for restructuring

26 Nov 2014

The South Korean conglomerate’s de facto holding company is an odd mix. Cheil Industries operates theme parks but most of its value is in a stake in an insurer. For those seeking exposure to Samsung’s wider shake-up, the $1.4 bln IPO is a way to get close to its heir apparent.

Buffett’s $4.7 bln Duracell deal a double positive

13 Nov 2014

Berkshire Hathaway is trading its Procter & Gamble stake for the consumer stalwart’s battery unit. Swapping a reliable staple for a declining business looks odd. But it’s tax-efficient and P&G’s injecting $1.8 bln of cash. Even with that, the seller’s getting a decent price.

Review: No bets on Berkshire after Warren Buffett

31 Oct 2014

Lawrence Cunningham’s “Berkshire Beyond Buffett” argues the Oracle of Omaha has built a corporate culture that will ensure success after his departure. The book does a good job of cataloging Buffett’s portfolio. But it doesn’t make a strong enough case for investors to follow.

Frothy M&A talk will worsen San Miguel’s hangover

26 Sep 2014

The Philippine conglomerate is eyeing an overseas oil and gas deal and says it remains interested in Britain’s United Biscuits. With a mixed track record in its recent deal-making, all the chatter will only weigh on the group’s already underperforming shares.