Conglomerates

Dan Loeb puts the right accelerant in Dow Chemical

21 Jan 2014

The activist investor wants the company to hive off its petrochemicals unit, a more aggressive move than CEO Andrew Liveris has hinted at. Loeb’s analysis looks optimistic, but a sum-of-the-parts analysis suggests merely breaking up Dow could boost its value by a fifth.

Can General Electric keep the activists at bay?

18 Dec 2013

If the gates at Apple, Microsoft and P&G can be rattled, complacency just isn’t an option for a $270 bln conglomerate. While GE’s strategy looks more coherent than ever, it still has soft targets for uppity investors: its finance arm and long-standing leader Jeff Immelt.

GE finally puts Jack Welch era out to pasture

15 Nov 2013

The conglomerate is spinning off its North America retail finance business. The move helps return GE Capital to its roots lending to mid-market companies and its parent’s industrial units, spelling the end of GE’s mission creep under its ex-CEO. That’s good news for shareholders.

One idea Samsung could safely copy from Apple

28 Oct 2013

The Korean giant’s $40 bln cash pile is almost as big relative to its market cap as that of its U.S. arch-rival. The hoard allows Samsung to keep investing when others can’t. But with almost two years of capex in reserve, it can afford to mimic Apple and give more to investors.

Review: Buffett clan puts up a good food fight

25 Oct 2013

The Oracle of Omaha has made billions and his farmer son is helping give them away. In “Forty Chances,” Howard Buffett chronicles efforts to end world hunger and bad philanthropic habits. It’s hard at times to relate to the plight, but reassuring to know his family is on the case.

Li Ka-shing still has what investors want

23 Oct 2013

Asia’s richest man may be an octogenarian but he still knows when to buy and sell. While the listed bits of his empire show a mixed record, Li’s two prized holding companies have matched or beaten the market. That provides valuable pointers as Li readies a new batch of IPOs.

Li Ka-shing still has options after ParknShop flop

21 Oct 2013

The tycoon’s Hong Kong supermarket chain’s mooted valuation of over $3 billion was ambitious. But there are other ways to raise funds for investment. ParknShop might be more palatable as part of an IPO of its parent, Li’s higher-margin giant retail group A.S. Watson.

Batista’s bravado hastening his own death spiral

10 Sep 2013

Sinking oil firm OGX has every right to insist founder Eike Batista honor a pledge to inject $1 bln. But Brazil’s one-time richest man no longer has the cash. Even a down payment would require stock sales in his other plunging firms, hastening the demise of his empire.

Kochs follow Buffett in takeovers, if not politics

9 Sep 2013

The conservative Koch brothers have taken a leaf from the more liberal Sage of Omaha in their $7.2 bln purchase of Molex. The family firm will be run as a separate unit, retaining existing management. Buffett’s favorite banker, Byron Trott, even appeared at the negotiating table.

Jarden shines a light on its island of misfit toys

3 Sep 2013

The $1.75 bln acquisition of Yankee Candle builds on the U.S. company’s hodgepodge collection of brands. Jarden has defied the odds by successfully expanding a $5.3 bln conglomerate while most others of its ilk get carved up. The question will be whether it can handle the scale.

Eike Batista gives human face to boastful Brazil

10 Jul 2013

The implosion of the tycoon’s empire sadly validates the sour joke that Brazil is the nation of the future - and always will be. Batista’s vow to become the world’s richest man looks as dubious as ex-President Lula’s promise of 30 years’ growth. Brazil deserves a hot-air discount.

Third time lucky looks a stretch for Eike Batista

1 Jul 2013

The Brazilian billionaire’s EBX group may soon crash. He bounced back from financial disaster before. But now he’s wiped out $50 bln of value in three years after borrowing oodles to expand quickly. Investors share some blame. But now they’ll surely be too wary of Batista.

Buffett needs luck for Las Vegas gamble to pay off

30 May 2013

Berkshire Hathaway’s $5.6 bln bet on NV Energy suggests billionaire investor Warren Buffett is coming up short on decent ways to deploy his cash. With utility mergers offering meager synergies thanks to regulators, Berkshire will struggle to cover its cost of capital.

GE Capital chief exit puts spotlight on Immelt

30 May 2013

Michael Neal may be leaving after eight years running the erstwhile high-flying lending unit. He got GE Capital back in shape after the financial crisis, but it’s no longer the company’s key division. Neal’s departure raises the question of who will succeed GE boss Jeff Immelt.

Deals and buybacks portend cheerier Buffett powwow

2 May 2013

Last year’s Omaha gathering soured over a tepid share price and controversial tax plan. But Berkshire’s recent acquisitions and stock repurchases should brighten the mood this weekend. Shares are on the rebound, giving followers of the newly tweeting Oracle reason to boast.

GE shareholders close gusher on bolt-on oil deals

8 Apr 2013

Their reaction to its $3 bln Lufkin swoop is more realistic than the wowed reception an earlier acquisition got. Lufkin’s a strong player in a growing sector. But previous deals did little for margins and the latest carries a 38 pct premium. Tempering the optimism looks fair.

Goldman and Buffett scratch each other’s backs

26 Mar 2013

They’re amending the terms of warrants used in a 2008 rescue investment of the bank. Buffett gets his profit without having to stump up $5 bln in cash. Goldman minimizes dilution, which helps its return on equity - while also easing stock buyback negotiations with the Fed.

$5 bln of delayed gratification better than none

27 Nov 2012

Boardroom egos often hamper deals that can benefit investors. Ralcorp flipped suitor ConAgra the bird a year ago. With the formerly reluctant chairman running a spin-off, the food producer is now selling at a price it could have negotiated before. At least it got a second chance.

GM’s ex-lender closer to repaying U.S. – on paper

5 Nov 2012

GM and Ally owe taxpayers $42 bln. GM is profitable but trades way below break-even. Ally’s combination of a solid core business, asset sales and reduced mortgage risk values it above what it owes. But only an outright sale would recoup taxpayer aid fast. That looks remote.

Eike Batista adds bottom feeding to tangled web

1 Aug 2012

The Brazilian billionaire is taking his logistics arm LLX private after the share price halved in a year. Investors may rue getting on board with Batista, but delays, losses, missed targets and a slowing economy swamping his complex conglomerate make it a good time to jump ship.