Conglomerates

Capital Calls: Continental split

17 Feb 2022

Concise views on global finance: The $20 bln German auto supplier is eyeing a four-way separation, according to a report.

Aussie conglomerate daringly bucks breakup trend

14 Feb 2022

As GE and J&J dismantle their empires, Wesfarmers is expanding its stationery-to-lithium sprawl by acquiring drugstores and maybe a veterinary service. Its Home Depot-like Bunnings chain helps the disparate parts equal the A$60 bln sum, but one bad deal risks debunking the model.

Vietnam electric car whizz takes ambitious road

9 Feb 2022

Carmaker Vinfast is going all-electric and aims to sell overseas. The strategy combines conglomerate power through parent Vingroup with potential for a faster-than-expected shift to new energy vehicles in Southeast Asia. It maps a decent drive to a mooted $3 bln U.S. listing.

SoftBank Alibaba problem is worth more than an Arm

8 Feb 2022

Weak earnings from the Japanese conglomerate were eclipsed by its failed sale of the chip designer. Floating it instead could yet work well, but it won’t ease boss Masayoshi Son’s bigger issue: his stake in the Chinese e-commerce titan, which is worth as much as his entire firm.

Korean retail investors prefer their value trap

27 Jan 2022

LG Chem and SK are spinning off prize units, hoping to shrink their conglomerate discounts. They have met heavy resistance from individual shareholders panicked about dilution. Buybacks and dividends would be more persuasive than jargon about unlocking value.

GSK consumer fiasco leaves Unilever vulnerable

19 Jan 2022

The Dove maker ruled out raising its 50 bln pound bid for the pharma group’s toothpaste unit. Investors will be relieved CEO Alan Jope isn’t overpaying. But he’s now stuck with a food portfolio he’s clearly not happy with. His rash strategy will increase pressure for a breakup.

Capital Calls: Dan Loeb’s gadfly circles again

18 Jan 2022

Concise views on global finance: The U.S. activist’s activists up the ante with call for independent director.

Companies will take breakup pitch too far in 2022

31 Dec 2021

Now that General Electric and J&J are splitting up, bankers will recycle the book for tech, energy and car firms. Many have outgrown the conglomerate model. But those trying to transition their businesses have financial and operational overlap that is important to retain.

Toshiba clears path for big 2022 Japanese buyouts

22 Dec 2021

The $18 bln conglomerate plans to split, but a takeover bid betrayed private equity’s voracious appetite in the country. A few dozen chunky companies suit the LBO financial model, per a Breakingviews analysis. Closer inspection suggests a tempting target among them is Ricoh.

3M is stuck in conglomerate purgatory

14 Dec 2021

The $100 bln firm known for its sticky notes is merging its food safety group, one of more than 20 divisions, with Neogen. The $4 bln deal won’t solve CEO Mike Roman’s problem: He is stuck with an array of businesses that have some overlaps without really belonging together.

Capital Calls: Securitas

8 Dec 2021

Concise views on global finance: The Swedish security specialist’s acquisition of Stanley Black & Decker’s alarms unit should boost growth and margins.

Capital Calls: Microsoft, AT&T, American Airlines

7 Dec 2021

Concise views on global finance: Microsoft is finally being scrutinized with Europe’s probe of its $16 bln Nuance deal; U.S. lawmakers have antitrust worries about the telecom firm’s Discovery deal; American Airlines’ retiring CEO leaves shareholders short-changed.

GE split should start with insurance black box

17 Nov 2021

Its $38 bln of old-age care policies – historically the source of some nasty surprises – will be lumped with the jet-engine division when the conglomerate breaks into three. Covid-19 may have made those policies less of a liability. That’s all the more reason to cut them loose.

Viewsroom: GE goes for breakup; COP not out yet

11 Nov 2021

Though Larry Culp’s move to separate the U.S. industrial conglomerate into three parts marks the end of an era, the decision was inevitable, John Foley argues. And the UN climate do kicks off its second week with one step backward. George Hay and Rob Cox check in from Glasgow.

Evergrande vultures swoop into moral hazard

20 Oct 2021

The Chinese developer’s deals to sell its headquarters and property management arm may have hit political snags. Overpay and it looks like a bailout; a lowball bid invites cries of opportunism. Quick deals preserve value in a crisis. Hesitant governments hurt more than they help.

Reliance’s 7-Eleven swoop inconveniences Amazon

8 Oct 2021

Mukesh Ambani’s $230 bln group has taken over the franchise rights for the stores in India from Future Retail, which it is trying to buy. That bigger purchase is being legally contested by its U.S. rival. But the tycoon has found a way to get what he wants despite the setback.

India’s promoter capitalism gets a timely bashing

6 Oct 2021

Shareholders are stirring up resistance at Mukesh Ambani’s Reliance, broadcaster Zee and lender PNB. Some of the uprisings will be quelled, but they underscore a welcome shift toward more investor-friendly forces. It’s an overdue development just as interest in the market surges.

Three’s a good crowd in Indonesia telecoms deal

17 Sep 2021

Combining CK Hutchison’s local 3 unit with Ooredoo’s Indosat produces a $6 bln No. 2 player and synergies of $400 mln. If past industry tie-ups in similar markets are a guide, the Hong Kong and Qatari groups’ deal will also lift rivals’ revenue and cut their costs too.

Electric-car crash is double pain for Evergrande

30 Aug 2021

The Chinese property developer’s unit saw its equity value fall 90% in four months to just $8 bln. Founder Hui Ka Yan is adept at finding money when the going gets bumpy, but EV makers rely on high values to lure fresh funds. It represents a dead end for its indebted parent too.

Surf ‘n’ turf is juicy ESG starter for M&A feast

17 Aug 2021

Brazilian meatpacker JBS made a curious second bid for Tasmanian salmon farmer Huon after mining billionaire Andrew Forrest raised environmental and animal-welfare concerns. Buyers often come ready to clash over price, not sustainability. Add a new chapter to the deal cookbook.