Deals

UBS’s $10 bln state guarantee is a useful fantasy

7 Jun 2023

The bank is getting Swiss taxpayers to shield it against some losses on its Credit Suisse deal. It allows the government to smooth a controversial takeover, and helps UBS boost a stretched capital ratio. Both sides are making a calculated bet that the backstop is never needed.

Merger cops’ sandcastle arguments risk crumbling

6 Jun 2023

US competition chief Lina Khan is pushing to the brink in a fight over Illumina’s $7 bln purchase of cancer-test maker Grail. Antitrust enforcers risk a court loss that could curtail their powers. They have chosen a poor, highly speculative case on which to make this gamble.

Capital Calls: $6 bln pet buyout

2 Jun 2023

Concise views on global finance: Shares in UK veterinary pharmaceuticals group Dechra are trading 6% below private equity firm EQT’s new, lower bid. That looks too pessimistic given the chunky valuation on offer.

A $6 bln server deal is template for a mini-boom

1 Jun 2023

Buyers raced to pay sky-high prices for data centers feeding the cloud - until a market turn brought bankruptcies and tumbling shares. A bidding war involving Brookfield suggests the race is on again, as buyers try to exploit the last cycle’s exuberance and the next one’s hype.

Syngenta’s bumper IPO will test Chinese appetite

1 Jun 2023

The seeds-to-pesticides group is planning a $9 bln stock market float in Shanghai this year. In this Viewsroom podcast, Breakingviews columnists explain how investors need to get comfortable with its high debt levels and use of toxic chemicals that could hurt its valuation.

Wall Street faces life in China’s second tier

1 Jun 2023

Morgan Stanley, Goldman Sachs and rivals are trimming jobs in Greater China due to a slow recovery and US tensions. Even when activity picks up, boosting market share in the world’s second-largest economy will be tough. The usually dominant financiers will remain fringe players.

Paramount’s cast addition hints at exciting finale

31 May 2023

Byron Trott’s firm is joining scion Shari Redstone and billionaire Warren Buffett as a backer of the $10 bln media empire. Its capital infusion should help ease debt concerns for the controlling shareholder. The banker’s family-business ties also dangle the prospect of a buyout.

Shrinking VC clique will hurt returns

30 May 2023

Investors in venture capital funds and startups are doubling down on familiar faces and shutting the door on newcomers amid tightening economic conditions. Their reticence could change which companies receive funding and hurt returns.

Petrol station tycoons’ debt fix has hidden flaw

30 May 2023

The Issa brothers are shifting UK filling stations to their Asda supermarket chain for $3 bln. The deal helps prop up their balance sheet and possibly expand elsewhere. But it leaves the grocer with extra costs and exposure to a sector at risk from the rise of electric vehicles.

Syngenta’s IPO is more relief than triumph

30 May 2023

The agritech giant’s $9 bln listing looks ripe. State players will handhold it to the bell and proceeds will help cut debt from its parent’s costly 2017 buy. Sadly, the poster child of China’s acquisitions abroad has few to inspire, and not many foreign investors are invited.

Capital Calls: Saudi Arabia and the BRICs

29 May 2023

Concise views on global finance: The oil economy is in talks to become the ninth member of the Shanghai-based “BRICS bank”, another sign of Middle East money stepping up to fill gaps in Asia created by Western-led sanctions.

Glencore’s Bunge redux may yield Teck benefits

26 May 2023

The Swiss commodity giant could merge the agri-trader it part-owns with its $14 bln US-listed peer. A Bunge deal would be oddly timed, and Glencore has other ways to raise cash. But the bid may offer a way to spur Glencore’s share price as it mulls a new offer for Canada’s Teck.

Capital Calls: Lufthansa/ITA

26 May 2023

Concise views on global finance: The 11 bln euro German carrier pays 325 mln euros for a 41% stake in the airline born from the ashes of Alitalia.

Illumina shareholders vote for lose-lose outcome

25 May 2023

Carl Icahn scored a seat on the $30 bln biotech’s board, but fell short of the three he sought. Boss Francis deSouza won re-election but must now deal with the activist’s lieutenant. And newer investors hoping Illumina was in for a big shake-up will be disappointed. No one wins.

Capital Calls: Embracer fail dents credibility

24 May 2023

Concise views on global finance: Shares in the $3 bln maker of shoot-’em-up video games fell nearly 45% after a mystery partnership agreement fell through at the eleventh hour.

Capital Calls: Buyout loans

23 May 2023

Concise views on global finance: The termination of broadcaster Tegna’s sale to Standard General lets banks off the hook for funding some $8 bln in buyout debt, but clearing the pile of hung loans is just one part of the leveraged finance problem for big lenders.

Activist Yelp review is worth hearing out

23 May 2023

TCS Capital wants the local listings site to explore a sale, pitching a tie-up with Barry Diller’s home-services rival Angi. A targeted $70-per-share price – double Yelp’s current valuation – seems absurdly high. But potential cost savings make the combo an intriguing blueprint.

SoftBank pulls rabbits out of Fortress’s hat

23 May 2023

Boss Masoyoshi Son appears to be selling the money-losing Japanese conglomerate’s US alternative asset manager for at least double the valuation initially touted. There should be enough tricks left over for new majority owner Mubadala. But Fortress staff get the best of the deal.

Mizuho will find M&A history rhymes at Greenhill

22 May 2023

The Japanese giant is expanding rapidly in merger advice by acquiring the boutique for $550 mln. Striking during a dry spell means a lower cost and less chance of bankers leaving. Dealmakers blind to the risks of their own deals, however, has caused decades of disappointment.

A&O Shearman could live down to expectations

22 May 2023

UK law firm Allen & Overy is merging with New York's Shearman & Sterling. Creating the world's third largest legal practice with $3.4 bln in revenue could please big clients after a transatlantic service. But judging by past sector M&A, it could also create dis-synergies.