Conglomerates

Abu Dhabi’s new spinoff raises familiar questions

8 Jan 2024

The $245 bln International Holding Company is taking over a $27 bln group of assets from its royal parent. As with previous IHC deals, it’s hard to judge this one’s value or purpose. Unlike transactions by local oil giant ADNOC, it won’t aid the UAE’s hunt for foreign capital.

The Li clan will deal their way out of value trap

20 Dec 2023

The Hong Kong-based empire founded by Li Ka-shing is unloved by investors. Despite his son Victor’s efforts to boost value, the $20 bln CK Hutchison trades at a big discount to its net assets. With 80% of revenue outside Greater China, it makes sense to explore a sale or breakup.

Gautam Adani can afford a smile about crisis year

15 Dec 2023

The tycoon’s empire has pared huge stock price losses after a short-seller attack in January. Some questions remain, but the saga is emerging as a win-win. In many ways, Hindenburg Research did Adani and India a favour, while enabling opportunistic investors to make a fortune.

EU watchdogs muck up Amazon’s messy iRobot cleanup

28 Nov 2023

The European Commission says the e-commerce giant’s $1.4 bln takeover of the Roomba maker could shut out robot-vacuum rivals. Trustbusters are mainly concerned about Amazon’s market clout. Yet if the deal collapses, iRobot shareholders will suffer more downward suction.

Capital Calls: Carlyle, Panasonic

22 Nov 2023

Concise views on global finance: The US private equity firm is making a decent return selling its stake in McDonald’s China back to the burger chain. The $25 bln Japanese conglomerate is offloading a chunk of its low-margin automotive unit and will consider a listing, too.

Capital Calls: Goodyear, Target

15 Nov 2023

Concise views on global finance: By offloading assets, the 125-year-old tire maker is succumbing to a similar overhaul as many other iconic US industrial centenarians; the $60 bln retailer has finally taken aim at what it can control – keeping watch over inventory and costs.

Capital Calls: SoftBank

10 Nov 2023

Concise views on global finance: The Japanese conglomerate’s finance chief reckons its Vision Funds have ‘hit a bottom’. The firm’s broader surprise $6.2 bln quarterly loss, though, prompted shareholders to wipe 9% off the stock.

Amazon’s health push is a too-costly prescription

8 Nov 2023

The tech giant is slashing membership prices at its US doctors’ practice, One Medical, to $99 for Prime members. Primary care burns cash, and unlike digital efforts a chase for scale seems unlikely to help. It’s a pricey strategic drift to secure some extra subscriber loyalty.

Hess deal would be higher-octane with cash added

25 Oct 2023

The takeover target’s rich valuation grants it a chunky stake in an enlarged Chevron. But the $53 bln merger now offers no premium and only shares in an underperforming acquiror. Chevron CEO Mike Wirth may have to bid against himself by throwing in a sweetener with hard currency.

If Amazon, why not Walmart?

25 Oct 2023

Lina Khan’s FTC argues the e-commerce giant’s dominance leaves sellers and customers little choice, even though shopping habits vary. The agency also targets common pricing strategies. By this logic, it’s hard to see what’s so different from the Walton family’s mega-retailer.

Capital Calls: P&G’s pricing power

18 Oct 2023

Concise views on global finance: The $350 bln maker of Pampers diapers and Pantene shampoo charged another 7% more on average for its stable of products, but it can afford to keep squeezing shoppers because of the $1.1 trln Americans have in the bank.

Siemens is case study in China de-risking dilemma

4 Oct 2023

The $110 bln conglomerate trades well below the sum of its parts. The normal fix would be to offload low-margin areas like its legacy railway division. But Siemens has a patchy record on M&A, and its growth story largely depends on China – from which it is obliged to de-risk.

Ambani’s retail backers dispel only a little doubt

15 Sep 2023

Asia’s richest man is raising funds at the shopping unit of his Reliance Industries. Infusions from KKR and Qatar signal a $100 bln pre-IPO valuation, twice some analyst estimates, but there are caveats. A few more endorsements from new financial investors would go a long way.

Arm’s IPO valuation rests on big dose of hope

7 Sep 2023

The SoftBank-owned chip designer is getting ready to list. In this Viewsroom podcast, Breakingviews columnists argue that even the company’s reduced price tag of $50 bln is still far too high, and debate what investors would have to believe to buy the shares.

SoftBank’s reduced Arm price tag is still too high

5 Sep 2023

The Japanese group may float its UK chip designer for $50-54 bln. That’s lower than initially hoped, but still implies an implausible future where revenue and profitability soar. If Arm merely grows at recent rates and nudges up margins, its market worth is more like $35 bln.

Nvidia gives Arm IPO a double leg-up

4 Sep 2023

The $1.2 trln semiconductor designer’s AI-inflated stock price provides a following wind for the UK group’s float. Now Nvidia and two peers may endorse its valuation by buying into Arm’s offering. Owner SoftBank will be hoping other investors buy into the somewhat circular logic.

Capital Calls: Microsoft in the EU, Dollar General

31 Aug 2023

Concise views on global finance: The software giant will sell its Teams communications app separately from other software in the European Union; the discount retailer’s poor results reflect a more resilient US economy.

SoftBank could live with a cut-price Arm IPO

30 Aug 2023

The Japanese conglomerate wants a $60-70 bln price tag for the UK chip designer, according to reports. But it has reasons to push on even at a lower value, in part because a float would boost the parent group’s creditworthiness. That gives investors an incentive to play hardball.

Capital Calls: 3M settles again

29 Aug 2023

Concise views on global finance: The industrial conglomerate has followed a $12.5 bln agreement over long-lasting chemicals known as PFAS with a $6 bln deal to resolve one of the largest mass torts in U.S. history. A portion of it, however, comes in stock.

Roark scores sandwich deal better than $5 footlong

24 Aug 2023

Family-owned Subway is settling for a $10 bln price in its sale to the buyout firm. It values the chain at a lower multiple than peers and other deals, including Roark’s Dunkin’ purchase. With IPO markets opening and terms protecting buyers, there’s plenty to nibble on.