Consumer Products and Services

Ceconomy plays to German retail stereotype

26 Jul 2017

As befits a country known for thrifty shoppers, the newly listed electronics retailer has bought cheaply into Fnac Darty. While Ceconomy could probably afford a big premium to take over its French rival, it will take just a 24 pct stake – enough to keep rival bidders at bay.

Jimmy Choo buyout could blister the brand

25 Jul 2017

U.S. label Michael Kors is paying $1.2 billion for the luxury shoemaker. Three nimble steps are necessary to justify that price: supercharge sales, improve margins and find synergies. The buyer’s track record shows that is achievable, but at risk of taking Choo downmarket.

Unilever is half way there on Kraft challenge

20 Jul 2017

The Marmite maker has cut costs faster than expected, reducing ad spend and paying less to its suppliers. Its 20 pct operating margin goal looks reachable. Yet with U.S. rival Kraft Heinz free to reprise its hostile bid next month, volume growth is too low for comfort.

McCormick may struggle to digest $4.2 bln deal

19 Jul 2017

The $12 bln spice vendor is paying a fat 20 times EBITDA for the mustard and hot-sauce business of Reckitt Benckiser. With modest synergies in prospect, McCormick will need strong growth to pay down debt. Investors have reason to question the acquisition’s aftertaste.

Reckitt shows bigger rivals how it’s done

19 Jul 2017

The UK company sold its French’s Mustard unit to U.S. food group McCormick for $4.2 bln, a spicy 7.4 times sales – even though there’s no recovery story and limited synergies. With buyers this hungry, less efficient peers Unilever and Nestlé ought to emulate Reckitt’s recipe.

Peltz goes for the close shave at Procter & Gamble

17 Jul 2017

Unlike his last proxy fight at DuPont, the activist is taking a more surgical approach, lobbying for one board seat at the $223 bln razors-to-detergent conglomerate. Trian is also supporting management and not calling for a breakup. Shareholders would be daft to turn him down.

Campbell Soup deal is mmm mmm meh

7 Jul 2017

The canned-cream-of-mushroom-to-Goldfish-crackers maker is buying organic-focused Pacific Foods for $700 mln. Like other big grocery brands, Campbell finds itself squeezed by such rivals. At more than three times sales, it's a steep price to pay to try and get healthier.

ABF deserves more credit for retail flair

6 Jul 2017

Primark clothing stores, which generate half of group operating profit, are faring better than expected. Market share is rising even though the chain shuns online sales and is offering fewer discounts. That kind of retail flair bodes well for ABF’s valuation.

Danone could be next serving for hungry activists

5 Jul 2017

Low margins and poor investor returns mean the French maker of Activia yoghurt is a logical target. While an earlier campaign by U.S. activist Nelson Peltz had modest success, Third Point’s new stake in Nestlé and President Macron’s pro-business agenda argue for a fresh look.

Stonyfield deal whipped up by U.S. yogurt frenzy

3 Jul 2017

France's Lactalis is paying 20 times EBITDA for Danone's yogurt brand, or $875 mln. While American demand has propelled upstarts like Chobani to multibillion-dollar valuations, growth has slowed. It may be hard for the old-school label to woo new consumers.

Nestlé can ignore all Dan Loeb’s ideas bar one

3 Jul 2017

Of the four demands activist Third Point put to the Swiss giant’s board, just one is worth pursuing. Share buybacks, selling divisions and a sale of Nestlé’s L’Oreal stake wouldn’t obviously juice up the share price. Old-fashioned margin improvement holds the most promise.

Staples’ $6.9 bln buyout could end in the shredder

29 Jun 2017

Private equity firm Sycamore is paying an 18 pct premium for the office supplies retailer whose revenue is falling. Even with generous assumptions, the buyout hardly passes return hurdles. Sycamore will need to flex superhuman turnaround muscles for this deal to pay off.

Nestlé serves up only semi-sweet buyback

27 Jun 2017

Days after being put on the spot by Dan Loeb, the Kit Kat maker said it would repurchase up to $21 bln of shares over three years. It's an incremental step, like a review of the U.S. candy arm. Ignoring bigger issues, however, could allow the activist to marshal more support.

Nestle gives Dan Loeb an Alpine peak to climb

26 Jun 2017

The pushy billionaire has set his sights on the Swiss Alpo-to-Perrier producer. Consumer groups such as P&G and Pepsi have proven tough activist targets. Loeb clearly likes a challenge, having recently agitated in lethargic Japan. And $263 bln Nestle may be a movable mountain.

Harley-Davidson’s Italian drive could prove pricey

22 Jun 2017

The U.S. motorcycle maker might pay up to 1.5 bln euros for rival Ducati, Reuters reported. The racy Italian brand would bring younger riders and more international customers. But unless Harley can rev up Ducati’s lacklustre earnings any deal would be financially corrosive.

Art world upstart sprays tech fortune on canvas

2 Jun 2017

Japan's Yusaku Maezawa is building a collection of Basquiats and other masterpieces. The soaring value of his fashion portal vividly illustrates how investors are enchanted by the tech industry’s fast growth and fat margins. It also means he can afford to paint the town red.

Packaged-food firms rush to same M&A recipe

1 Jun 2017

Conagra is interested in buying $8 bln Pinnacle Foods, and both are eyeing Reckitt Benckiser’s North American food unit. Stagnating sales are pushing firms to bulk up in search of greater profits. With everyone looking to buy, selling is likely to generate the tastiest results.

IAG can weather turbulence at BA

30 May 2017

The owner of Britain’s flag carrier is reeling from an IT glitch that grounded hundreds of flights. While unions blame cost cutting, the airline has little choice but to bear down on expenses. The impact will fade: customers have short memories and focus on prices in the end.

Condom boom and two-child policy make odd couple

26 May 2017

A Chinese drugmaker and a buyout firm are buying the world's No. 2 condom-maker for $600 mln. The rich price could pay off, as Chinese couples invest more in safer sex. But this also highlights the difficulties Beijing faces in convincing the middle class to have more children.

Indian yogi shows power of local consumer kings

24 May 2017

Baba Ramdev says his group Patanjali doubled sales last year, making it bigger than the local arms of Colgate and GSK. A hand from India's ruling party may have helped. But his success also underscores how emerging markets consumers are increasingly sticking with national brands.