Divestment

AT&T augurs a renaissance in corporate breakups

2 Jun 2021

After going gaga for carveouts and spinoffs a few years ago, U.S. companies unleashed just $200 bln of them last year. Investors reward corporations that ditch sprawl for specialization. Ma Bell’s neatly structured Time Warner deal provides a catalyst to break more things up.

HSBC better late than never with U.S. exit

27 May 2021

It’s selling much of its American retail business to Citizens and Cathay for a song. There’s little capital relief from this sober end to a pricey, decades-long effort. At least it finally removes a distraction so that boss Noel Quinn can put the needed attention on Asia.

Chinese buyer can put spring back in Reebok’s step

26 May 2021

Owner Adidas thinks Anta Sport and Li Ning, as well as private equity firms, may bid for the ailing brand, worth maybe $1.8 bln. Buyout barons have scored big apparel wins. But a red-hot domestic market means Chinese groups are best-placed to succeed where the German firm failed.

Capital Calls: Uber union

26 May 2021

Concise views on global finance: UK union’s success in representing drivers may hit potholes in the United States.

FirstGroup rebels may rue waiting for the next bus

25 May 2021

Two shareholders of the UK transport operator may vote against a $4.6 bln sale of its U.S. businesses to EQT. While no knockout, the price looks fair given the lack of other certain offers. A delay could destabilise the company when it needs to focus on opportunities at home.

Viewsroom: AT&T’s second breakup, Asian super-apps

20 May 2021

The telephone company’s deal with Discovery, the reversal of a failed strategy to become a media juggernaut, opens a window into streaming warfare; and the creation of Southeast Asia do-everything internet group GoTo is a prelude of more to come. Plus, no Davos in Singapore.

Rusal’s upside from clean break only goes so far

19 May 2021

The $6 bln aluminium maker’s plan to demerge carbon-heavy assets could unlock value if ESG-focused investors value the other parts more highly. But the greener entity will still have 28% of polluter Norilsk Nickel and the risk of U.S. sanctions snapback. That might cap any gains.

BT pries open door to broadband stake sale

13 May 2021

The UK telecom group may bring in an outside investor to help fund an extra 3 bln pound expansion of its fibre network. Dutch peer KPN has done something similar. For CEO Philip Jansen it’s the first step towards a bigger prize: flogging off a chunk of BT’s main Openreach unit.

Green shoots’ salad days have come and gone

6 May 2021

Toppy valuations for wind and solar sparked Italy’s Eni, Spain’s Acciona and others to hire investment bankers for spinoffs and IPOs of renewables assets. Rising oil prices and fears of a green bubble mean firms now need size and a track record to play. That’s a good thing.

GSK CEO’s best defence is a graceful exit

5 May 2021

The $93 bln drug company is under pressure after activist Elliott took a stake. Boss Emma Walmsley is splitting the group into two, but its struggling pharma unit faces a lengthy turnaround, and may benefit from a new leader. Walmsley could run the new consumer business instead.

Verizon rips off band-aid with moderate punctures

29 Apr 2021

The $234 bln company wants to ditch AOL and Yahoo, and may get less than it paid a few years ago. That’s never a good thing. But in the media world, such value-destroying deals can be worse. This also enables the firm to get a wad of cash and focus on much bigger tasks, like 5G.

BT keeps eye on the ball by giving soccer the boot

29 Apr 2021

The UK telecom group may sell some or all of its sports broadcast unit. Where live matches once helped lure broadband customers, the battleground has switched to super-fast fibre connections. Falling subscribers and dubious profitability make TV sport an unnecessary distraction.

EQT pays an electrifying price for U.S. bus ride

23 Apr 2021

The Swedish buyout group is acquiring two of travel operator FirstGroup’s North American units for $4.6 bln. It’s a punchy valuation. To earn a decent return, EQT will have to boost growth by converting the iconic yellow school bus network into a fleet of clean electric vehicles.

Capital Calls: SXSW

19 Apr 2021

Concise views on global finance: Rolling Stone publisher Penske Media is taking a 50% stake in hipster arts festival South By Southwest.

Melrose disposal puts spring back in M&A step

19 Apr 2021

The UK turnaround specialist is selling most of its air conditioning unit for $3.6 bln. Though the implied annual return of 14% is not stellar, further disposals may lift it. Cutting net debt will allow CEO Simon Peckham to hit the acquisition trail again with vigour.

Capital Calls: Goldman Sachs, U.S. currency report

16 Apr 2021

Concise views on global finance: The Wall Street bank’s communications veteran, Jake Siewert, goes back to the future, sort of; Taiwan is dubbed a forex interventionist but avoids manipulator label.

Ireland bank exodus presages wider EU retrenchment

16 Apr 2021

Belgium’s KBC may flog most of its $12.3 bln of local assets to Bank of Ireland. NatWest just pulled the plug on Ulster Bank. Tough regulation, large incumbents and low rates played their part. The same factors will push other European lenders to retreat from far-flung markets.

Anglo American tests shareholders’ ESG bona fides

8 Apr 2021

The miner is giving investors one share in its spun-off thermal coal unit for every 10 already held. The commodity’s kryptonite status means many European institutions will want to get rid of them for the same reason as Anglo. But rising coal prices may turn some heads.

SocGen fund sale is good enough to spur copycats

7 Apr 2021

The French bank is set to sell its passive investing unit to Amundi for 825 mln euros. While below some estimates of 1 bln euros, CEO Frederic Oudea’s price is adequate and he’s solving a strategic problem. Other banks with subscale fund arms, like UBS, may follow suit.

Capital Calls: Bling deal

6 Apr 2021

Concise views on global finance in the Covid-19 era: Signet, the owner of jewelers Zales and Kay, is buying rental firm Rocksbox.