Conglomerates

Samsung boss parole sets high bar for dealmaking

10 Aug 2021

Jay Y. Lee’s early release from prison ramps up pressure on him to use the tech powerhouse’s $82 bln cash pile to make splashy investments to close a gap with rivals in chipmaking, autos and more. Samsung’s heft will force creative thinking. It’s a tricky combination to manage.

The Exchange: Good chemistry

10 Aug 2021

Jean-Marc Gilson, the first foreigner to run industrial giant Mitsubishi Chemical, is streamlining a conglomerate with fingers in everything from pharma to batteries. He talks with Pete Sweeney about clean energy, better governance and how outsiders fit into Japan Inc.

GE chief accepts the things he cannot change

27 Jul 2021

Larry Culp’s monomaniacal quest to make his $120 bln conglomerate “lean” is paying off. GE’s cash flows are improving. But Culp can’t do anything about shifting tides of customers’ behavior. Investing in GE also requires getting comfortable with the things Culp can’t control.

Tencent sends frightening WeChat status update

27 Jul 2021

Investors wiped $54 bln from the Hong Kong-listed company’s value after it froze user sign-ups on its chat app. Tencent blamed a technical upgrade, reassuring few given regulators have used suspensions to punish other firms. As panic sets in, markets will get harder to calm.

Cairn and India have a third option in tax fight

8 Jul 2021

Freezing of the country’s Paris properties underscores frustration at New Delhi’s refusal to pay a $1.7 bln arbitration award. India can avoid further embarrassment and escape paying in full by letting Cairn invest in new projects. But that’s only possible if it concedes defeat.

Climate bad bank concept has ideal test case

29 Jun 2021

Rising prices may help BHP offload more fossilised assets. A better option for mining boss Mike Henry would be to shovel them into a bad bank of sorts, using cashflows to cut carbon while winding down the units. That would help win over ESG investors and set a replicable example.

Toshiba mess will be useful national embarrassment

10 Jun 2021

An independent probe found the $20 bln Japanese conglomerate sought to subvert shareholders in conjunction with the government. The findings intensify pressure for a sale, bolster the broad case for activist investors and should kick Japan’s governance changes into higher gear.

Capital Calls: Bitcoin, Procore

20 May 2021

Concise views on global finance: Getting paid in cryptocurrencies loses allure in U.S. President Joe Biden's tax plan; the $11 bln building software firm is a bargain compared to peers.

Video games give Tencent a break from reality

21 May 2021

Hits like "Honour of Kings" powered a 25% rise in quarterly sales, to $21 bln. New titles should give boss Pony Ma some cover from regulatory threats and fierce competition. The respite may be temporary, but changes in the messaging, music and video divisions hint at what's next.

Self-help is still the best support GE can expect

27 Apr 2021

The $119 bln industrial group is hacking away at inefficiencies and lumps to create something more predictable and cash generative. What’s missing are customers, especially for jet engines. The recovering share price banks on CEO Larry Culp being as good at offense as defense.

Capital Calls: Chubb and Hartford, Swimming pools

22 Apr 2021

Concise views on global finance: The company led by Evan Greenberg twice raised its bid for its Connecticut rival, but so far to no avail; a blowout quarter for private-pool maker Pool Corp points to buoyant wealth and spending trends, but only for some.

Capital Calls: U.S. antitrust, Dyal-Owl Rock

21 Apr 2021

Concise views on global finance: Would-be U.S. trustbuster nominee Lina Khan suggests it’s not just tech companies to blame for Big Tech’s dominance; two U.S. investment firms’ planned merger and sale to a blank-check company has cleared a legal hurdle.

Hitachi’s $9.6 bln buy defies some global logic

31 Mar 2021

The Japanese group is paying a huge 38 times forecast EBITDA for U.S.-software firm GlobalLogic. That’s only partly justified by the target’s superfast growth in a hot “digital transformation” market. Boss Toshiaki Higashihara will need serious synergies to eke a decent return.

Family feud presses Korea Inc to cry uncle

17 Mar 2021

A power struggle between Kumho Petrochemical’s chairman and his nephew is headed for a shareholder showdown. The dissident’s Elliott-like playbook already has persuaded the $6 bln company to improve governance and hike dividends. Winning a board seat would send a strong message.

Jardine restructuring could tempt an activist

16 Mar 2021

The Hong Kong conglomerate’s plan to end a double holding structure more than halved its discount to net asset value to 10%, per Breakingviews calculations. While that will ward off some pushy investors, others may smell a chance for more change. And there is plenty to clean up.

Capital Calls: T-Mobile US, Ulta Beauty

12 Mar 2021

Concise views on global finance in the Covid-19 era: The U.S. telecom is benefiting from its merger with SoftBank’s Sprint; the U.S. cosmetics retailer revealed a tidy succession plan, but its business still faces lingering pandemic side-effects.

GE is getting tantalizingly close to take-off

8 Mar 2021

Merging the aircraft leasing unit with rival AerCap may not erase debt that weighs on the U.S. conglomerate. But it would leave a sleeker GE with more options to raise cash. Boss Larry Culp has to navigate politics, though. And like Baker Hughes, risks to execution loom large.

Jardine picks opportune moment for historic buyout

8 Mar 2021

The Mandarin Oriental owner will pay $5.5 bln to buy out its fellow holding company, unwinding a 1980s-era structure designed to fend off tycoons like Li Ka-shing. A low valuation and cheap funding make it a smart time for the storied Hong Kong trading house to reduce complexity.

China property credit crisis drags in Ping An Life

4 Feb 2021

China Fortune Land Development's $814 mln of overdue loans have local officials warning its collapse could create systemic risk. Over 200 financial institutions are involved. Beijing might let CFLD serve as a warning, unless the life insurance giant steps in to save its stake.

New Panasonic engineers leaner, meaner machine

3 Feb 2021

Cutting costs and dud assets boosted the $32 bln Japanese giant’s operating profit 30% in the first months of its overhaul despite pandemic-subdued sales. An electric-car boom will help the Tesla supplier’s top line, too. That gives incoming boss Yuki Kusumi room to manoeuvre.