Construction

Corona Capital: Champagne, Canada, College chaos

18 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: Champagne growers cut production; Canada’s finance minister quits over stimulus costs; and some American universities are collecting tuition fees before telling students that in-person classes can’t happen.

Corona Capital: Thanksgiving shopping, Airlines

22 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Walmart gives thanks to employees; Airlines’ relative winners emerge.

Corona Capital: Nursing homes, Airlines, Walgreens

9 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Nursing home investments will get a rethink; airline travelers get the upper hand; and Walgreens’ LBO heyday is in the past.

Bankers’ share sale boom hints at fragile recovery

27 May 2020

Saint Gobain sold $2.7 bln of shares in Sika, one of several recent so-called block trades. Such deals are a quick way for banks to win business but, as Citi’s experience with the Swiss group shows, carry risks. Companies’ rush to exit suggests stock market gains may be fleeting.

Corona Capital: Merger bans, Moelis, Domino’s Pizza

23 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. politicians plan a curb on opportunistic M&A, advisory boutique Moelis cuts its dividend, and Domino's delivers.

Schneider puts hefty price tag on green M&A

13 Feb 2020

The French industrial company has offered $1.5 bln for Germany's RIB Software, which tracks builders' power usage. The deal taps into the growing value of energy efficiency. But without cost savings, CEO Jean-Pascal Tricoire needs punchy sales growth to justify a high premium.

Saint Gobain’s US deal has little margin for error

13 Nov 2019

The $22 bln construction company is buying Virginia-based Continental for $1.4 bln. CEO Pierre-André de Chalendar is paying a full price to ease his reliance on Europe. Even with hefty cost savings, the French group’s shareholders face a long wait to make an acceptable return.

Syria assault has cruel economic logic for Turkey

10 Oct 2019

President Tayyip Erdogan hopes attacking Kurdish militia will enable him to send Syrian refugees home and launch a $27 billion construction drive. A severe humanitarian fallout could lead to tougher U.S. reprisals. But if Turkey can avoid these it would help its battered economy.

Benettons’ credibility on the line in road fiasco

16 Sep 2019

The $20 bln infrastructure group accounting for half the wealth of one of Italy’s top dynasties is sinking deeper into a probe linked to a deadly bridge collapse. The damage risks infecting their shirts-to-motorways empire. Replacing Atlantia’s boss would be too little too late.

Americans want new homes, just not these ones

21 Feb 2019

U.S. existing-home sales fell in January to a three-year low, the National Association of Realtors said on Thursday. More unsold homes and a dip in mortgage rates ought to help the market. But the dearth of starter homes means what’s available is increasingly out of reach.

Irish cement maker needs repairs over demolition

6 Feb 2019

Activist Cevian has taken a stake in $25 bln building-products group CRH. A spinoff of the undervalued U.S. business might unlock value but would leave an awkward European rump. Its best hope for appeasing shareholders is to spruce up margins, and improve its governance.

China’s next stimulus plan looks to the tax man

29 Jan 2019

Caterpillar’s cooler mainland sales are a reminder of Beijing's reluctance to build its way out of trouble. Monetary policy remains cautious too. A lower fiscal burden is the alternative way of encouraging companies to invest, even if local government finances suffer.

CVC’s $3 bln Nordic LBO do-over needs new tricks

11 Dec 2018

The buyout firm is taking control of Ahlsell again, two years after selling out of the Swedish distributor. Its recent ownership suggests there won’t be much scope to cut more costs. To get a decent return this time, CVC will have to pile on debt and hope for revenue to pick up.

Kier banks face spectre of HBOS-style flop

5 Dec 2018

The engineering group’s share price is near the level at which it needs to issue stock. Further falls could leave banks with shares, a rare event since the fiasco of HBOS in 2008. Brexit and government cuts don’t help. If the sector needs any more capital, it’s an ominous sign.

U.S. housing poses headwind for economy

9 Nov 2018

Online real-estate firm Zillow lowered its outlook, tanking its shares, while DIY chain Lowe’s is shuttering stores. Meanwhile mortgage applications have dropped as loan rates hit a nine-year high. If home buying continues to slow, the effects will be felt more widely.

Greece needs a governance reboot

21 Aug 2018

International lenders forced Athens to clean up its banks. Yet non-financial companies and their boards are still often dominated by large shareholders. Better protections for minority investors would attract more foreign capital, and help the economy recover from its bailout.

Italy’s Atlantia hardball comes at a price

20 Aug 2018

The government may strip the group of a contract to manage Italy’s motorways after the Genoa disaster. Tough action is needed, but the move could cripple Atlantia and looks premature. The stock plunge is a reminder of why investors need to apply a bigger discount to local assets.

USG pokes hole in U.S.-Europe trade drywall

11 Jun 2018

The building products outfit agreed to a $6.1 bln takeover by German rival Knauf. It did well to get a 5 pct top-up given 31 pct owner Warren Buffett was already on board. In the wake of a rancorous G7 it shows companies can still transact when politicians keep out of the way.

Expanded Heathrow’s value to rest of UK is hazy

6 Jun 2018

Europe’s busiest airport has tried to placate critics of a third runway by incentivising flights to smaller UK cities. But large airlines will struggle to make these stack up. Unless budget players can do so, the charge that Heathrow only works for London will be hard to refute.

Saint-Gobain and Sika build happy truce

11 May 2018

A takeover battle dating back to 2014 is resolved. The French company ends up more than 600 mln euros better off after buying a stake of Sika and then selling a chunk back. Its former Swiss target pays a relatively low premium for freedom. Shame peace took so long to break out.