Divestment

Smiths Group only partly lances its strategic boil

14 Nov 2018

The UK engineer is to hive off its medical arm. Creating daylight between the flatlining health unit and the faster-growing security and oil services bits could make it easier to sell. But unless Smiths can give more detail this looks more like buying time than creating value.

U.S. disposal helps clear Diageo’s sales hangover

12 Nov 2018

The booze giant is offloading cheap-and-cheerful drinks like Popov vodka and Black Haus schnapps to rival Sazerac for $550 mln. Forswearing discount spirits, where sales are declining, should give investors a clearer view of consumers’ demand for its more expensive tipples.

Private equity could scratch Nestlé skin-care itch

6 Nov 2018

The KitKat maker is selling a unit specialising in psoriasis and acne treatments. Rival consumer groups may be put off by the business’s tricky mix of products and low margins. Private equity firms, already piling into the dermatology sector, would make a more logical owner.

Naspers’ Vision Fund-lite carries less baggage

5 Nov 2018

The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.

KKR throws autos shareholders into a spin

22 Oct 2018

The buyout group is paying $7.1 billion for a Fiat Chrysler-owned supplier. The double-digit earnings multiple is a coup for new FCA CEO Mike Manley. The big premium to where the industry trades needs some justifying. But regular investors may also be too gloomy about the sector.

ABB belatedly succumbs to industrial revolution

19 Oct 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

Europe’s IPO investors get Brexit present

4 Oct 2018

Companies are rushing to list while stock-market valuations are rich and before Britain crashes out of the EU. The deluge means bankers have to price offerings modestly, and investors can afford to be picky. Hairier issuers, like Aston Martin or Funding Circle, face a bumpy ride.

Fiat car-parts sale needs private equity mechanics

3 Oct 2018

The carmaker may spin off or sell its Magneti Marelli unit. Handing it to shareholders would let them keep any upside. But the outlook for parts makers is mixed, and valuations low. Selling to the likes of KKR makes more sense, even if CEO Mike Manley has to accept a price cut.

Saudi-Clariant chemical deal is murky concoction

18 Sep 2018

The Swiss group is setting up a joint venture with 25 pct shareholder Saudi Basic Industries. At the same time SABIC will contribute a new Clariant CEO and four board directors. Though the venture should make sense, the company’s governance becomes more complicated.

Naspers takes first step to shrinking Tencent gap

18 Sep 2018

The South African group is valued at a hefty discount to its $120 bln stake in the Chinese internet giant. Floating its African TV unit should therefore provide some relief to frustrated investors. To unlock more value, though, Naspers may need to shed its remaining operations.

Investec fund float could attract predators

14 Sep 2018

The Anglo-South African financial group is listing its asset management arm in London. Decent growth and increased focus should support a healthy valuation. With assets of 109 billion pounds, it may also make a choice morsel for a bigger rival.

Chinese $5 bln winter sports bid is hard to beat

11 Sep 2018

Fujian-based Anta has approached Finnish ski-wear maker Amer. The offer values the group at a hefty 17 times EBITDA. Anta’s need to fend off U.S. peers in its home turf suggests it will pay more than any rival. Still, the target’s share price suggests investors aren’t convinced.

Coca-Cola pays big price for global coffee fix

31 Aug 2018

The soda giant is spending $5.1 bln on the Costa chain of cafes. Justifying the frothy 16 times EBITDA multiple requires Coke to order up new markets for hot drinks. It’s another reminder of consumer groups’ lust for coffee. Investors in seller Whitbread are the big winners.

Only trophy hunters would bid $3 bln for Chelsea

29 Aug 2018

That’s what Roman Abramovich wants for the barely-profitable London soccer club, the Times says. But Chelsea’s dependence on selling players and the need to rebuild its stadium makes it hard for a new owner to earn a return. Any buyer would have to put glory ahead of money.

Saudi’s investment fund: the view from 2023

20 Aug 2018

The kingdom wants to expand the assets of its Public Investment Fund by 60 percent by 2020 as it diversifies away from oil. That involves it taking some big, risky bets. Breakingviews imagines the letter its chief executive will write five years hence.

Wrangler jeans breakup gets a dressing down

13 Aug 2018

Owner VF is separating its denim brands from the rest of its wares. The Wrangler and Lee jeans division will be more indebted and pay a higher dividend. But VF’s pieces add up to less than its $37 bln valuation, which takes the impact out of the company's big reveal.

HNA aircraft arm flies higher with $2.2 bln deal

8 Aug 2018

Selling a 30 percent stake in its Avolon leasing unit to Japan’s Orix lets the cash-strapped Chinese group repay debt. The deal could also help reassure creditors the division is insulated from the parent’s woes. If elevated borrowing costs fall, all shareholders will benefit.

Standard Life Aberdeen needs more activist touch

7 Aug 2018

The asset manager formed from last year’s merger of Standard Life and Aberdeen keeps losing funds. Cutting costs and returning capital have failed to close the discount at which the company trades to peers. Selling the India business and ditching a twin-CEO structure might help.

Vivendi disposals give Bolloré scary M&A war chest

30 Jul 2018

Vincent Bolloré’s acquisitive media group raised $2.7 bln from disposing of stakes in Ubisoft and Fnac Darty, and could borrow more. Possible targets are video games and live music. Yet given a dicey Italian foray and stretched valuations, investors may prefer cash to more M&A.

Atos picks good second best with $3.4 bln U.S. buy

23 Jul 2018

The French group is purchasing IT outsourcer Syntel after missing out last year on European peer Gemalto. Its original target was a more logical fit but the transatlantic deal gives Atos an entry pass to its new target’s U.S. bank clients and will create value after a few years.