Conglomerates

Aggressive M&A puts focus on Thai tycoon’s empire

27 Aug 2014

Charoen Sirivadhanabhakdi is eyeing more deals on top of the $3.3 bln his drinks-to-property group has spent this year. Investors have given a poor reception to his recent transformative acquisitions. A pick ‘n’ mix approach to public markets may explain some of the doubts.

GE scores a Pyrrhic victory in France

20 Jun 2014

The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.

Rob Cox: ITT’s ghost hangs over Silicon Valley

20 May 2014

As Amazon, Facebook, Alibaba and Google have become the new conglomerates, it’s instructive to consider the experience of Harold Geneen, who turned ITT into the original M&A machine. The internet approach may be different, but the driver is the same: a fear of obsolescence.

GE’s Immelt sets powerful stage for his successor

30 Apr 2014

He’s not leaving any time soon. But the $13.5 bln Alstom asset purchase puts him on track to ensure industrial earnings account for 75 pct of the business in five years’ time. And though it will take precise execution, the deal even promises a return above GE’s cost of capital.

Energizer split leaves biggest problem intact

30 Apr 2014

The struggling $7 bln batteries-to-tampons group plans to separate into household and personal care companies. That may improve focus, but it’s hard to see how it addresses Energizer’s main challenge: mustering more resources to take on industry gorilla Procter & Gamble.

CITIC’s $37 bln merger hints at SOE reform task

16 Apr 2014

The union of the Chinese giant with its Hong Kong-listed subsidiary offers rare visibility into China’s sprawling state conglomerates. CITIC Pacific shareholders get mostly listed assets at a discount – and if all goes well, a potentially profitable ringside seat in the cleanup.

Rob Cox: GE should put itself up for sale

1 Apr 2014

April Fools’ Day joke? Nope. It’s a shareholder proposal on the ballot at GE’s annual meeting. Setting aside the absence of buyers for a $260 bln company, it illustrates the kind of shareholder democracy gone wild that many boards and an SEC commissioner would like to squelch.

United Tech activist defenses look mostly robust

11 Feb 2014

Talk of the $100 bln conglomerate selling chopper-maker Sikorsky raises questions about whether a breakup could unlock value. A Breakingviews analysis suggests the pieces are worth just 8 pct more than the whole. But a performance slip could weaken the ramparts to an attack.

India deal leaves Diageo with a long hangover

23 Jan 2014

The UK drinks group is fighting to hang on to some of the United Spirits shares it bought from Indian tycoon Vijay Mallya. Defeat in court could see Diageo’s stake fall below 20 pct. Though it still has options to reach a majority, its Indian adventure is getting riskier.

China’s Fosun pivots from mining to mantelpiece

22 Jan 2014

The mainland conglomerate started out in property and steel, but really wants to be an investment giant. JPMorgan’s downtown New York offices were a recent trophy; Forbes magazine may be next. What fuels Fosun is what drives China: growing wealth, ambition and easy leverage.

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.